UPDATE: Maxim Group Starts Stellar Biotechnologies (SBOT) at Buy

(Updated - November 24, 2015 7:18 AM EST)

Maxim Group initiated coverage on Stellar Biotechnologies (NASDAQ: SBOT) with a Buy rating and a price target of $17.00.

Analysts Jason McCarthy and Jason Kolbert highlighted:

• Stellar Biotechnologies leverages their on-land aquaculture facilities to manufacture the keyhole limpet hemocyanin (KLH) protein, derived from the keyhole limpet ocean mollusk. KLH is a potent immune stimulator that is rapidly becoming a key component in the development of vaccines.
• Stellar's aquaculture facilities allow them to raise keyhole limpets on land (not ocean-harvested) to provide a sourced, well-characterized, GMP protein product that can be used for in-human vaccines.
• As the KLH supplier, we believe that Stellar is ideally positioned to capture the value of what could be blockbuster vaccines in indications, like breast cancer, lupus, and Alzheimer's disease (among others).
• External and internal catalysts could drive Stellar as other companies achieve clinical success using KLH-based vaccines. As vaccines are approved, the beneficiary could be Stellar as the KLH supplier. How much can Stellar sell? The company expects to continue building sales up to 8 kilograms of KLH by 2020 and more from there. At up to $50,000 per gram, that is $400M in top-line revenues, which, at fair value, points to a $1B+ fair-value valuation. With a $62M market cap, there is significant upside, in our opinion.

For an analyst ratings summary and ratings history on Stellar Biotechnologies click here. For more ratings news on Stellar Biotechnologies click here.

Shares of Stellar Biotechnologies closed at $7.48 yesterday.

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