Full Press Release Details
Stellar Biotechnologies Reports Second
Quarter 2017 Financial Results
customer clinical studies drive plans for increased capacity.
expenses in line with expectations.
LOS ANGELES, Calif., May 9, 2017 - Stellar Biotechnologies,
Inc. (Nasdaq: SBOT), a leading manufacturer of a key protein utilized in multiple immunotherapy development pipelines targeting
cancers, Alzheimer's, diabetes and lupus, among other diseases, today reported financial results for the three and six months ended March
31, 2017 and provided an update on its business.
the second quarter, the company announced, among other activities, that it had entered into an exclusive agreement with a biopharmaceuticals
manufacturer to supply Stellar KLH for clinical development studies for metastatic breast cancer and other cancers. The company
also signed a technology transfer and purchase agreement with a vaccine biotechnology company related to Stellar's proprietary
Clostridium difficile technology
and licensed rights. Stellar Biotechnologies continues to advance plans to optimize its manufacturing systems for commercial-scale
production quantities.
"In the second quarter, we delivered on a number of strategic
objectives, including expanding our opportunities for growth," said Stellar President and CEO Frank Oakes. "We continue
to closely monitor the progress of our customers as they generate the next set of clinical results and inflection points for our
Stellar Chief Financial Officer Kathi Niffenegger reported that
expenditures for the first half of fiscal year 2017 were in line with management's expectations and included additional investments
to increase the scalability and throughput capacity of the company's KLH production and manufacturing processes. "Our
spending in the first half of fiscal 2017 reflects our focus on managing upfront development costs and capital expenditures while
investing in the people, processes and resources we need to meet our customers' near and long-term product forecasts,"
Three months ended March 31, 2017
Total revenues were $0.06 million for the quarter ended March
31, 2017 compared to $0.33 million for same period last year. The change was due to a decrease in product sales volume. While the
company's customer base has not changed significantly, product sales volumes are subject to variability associated with the
rate of development and progression of clinical studies of third-party products that utilize Stellar KLH. For the three months
ended March 31, 2017, product sales consisted of lower volume orders for pre-clinical studies and immune system assays. For the
three months ended March 31, 2016, product sales primarily consisted of higher volume orders for later stage clinical studies.
The rate of progression towards later stage studies is expected to continue to affect the timing and volume of future product sales.
Total expenses decreased by $0.21 million to $1.21 million for
the quarter ended March 31, 2017 compared to $1.42 million for the same period last year.
For the quarter ended March 31, 2017, Stellar reported a net
loss of $1.10 million, or $0.11 per basic share, compared to a net loss of $0.86 million, or $0.10 per basic share, for the same
Six months ended March 31, 2017
Total revenues were $0.20 million for the six months ended March
31, 2017 compared to $0.81 million for the same period last year. The change was primarily due to a decrease in product sales.
While the company's customer base has not changed significantly, product sales volumes are subject to variability associated
with the rate of development and progression of clinical studies of third-party products that utilize Stellar KLH. For the six
months ended March 31, 2017, product sales consisted of KLH for clinical and pre-clinical studies and immune system assays. For
the six months ended March 31, 2016, product orders primarily consisted of higher volume orders for later stage clinical studies.
Total revenues were also impacted by a decrease in the number of significant customers who purchased the company's products
and services, with two customers representing 88% of total revenue for the current period compared to five customers representing
90% of total revenue for the same period last year.
Total expenses decreased by $0.45 million to $2.77 million for
the six months ended March 31, 2017 compared to $3.22 million for the same period last year.
For the first half of fiscal year 2017, Stellar reported a net
loss of $2.59 million, or $0.26 per basic share, compared to a net loss of $2.49 million, or $0.30 per basic share, for the same
At March 31, 2017, the company had working capital of approximately
$8.92 million. Cash, cash equivalents and short-term investments totaled $8.60 million.
Additional Information
Stellar will file its Form 10-Q for the quarter ended March
31, 2017 with the Securities and Exchange Commission on May 9, 2017. To view the company's filings, please visit the website
of the Securities and Exchange Commission at www.sec.gov. To view the company's filings with the Canadian Securities Administrators
(CSA), including the Management Discussion and Analysis and related consolidated financial statements, please visit the CSA's
SEDAR website at www.sedar.com.
About Stellar Biotechnologies
Based north of Los Angeles at the Port of Hueneme, Stellar Biotechnologies,
Inc. (Nasdaq: SBOT) is the leader in sustainable manufacture of Keyhole Limpet Hemocyanin (KLH), an important immune-stimulating
protein used in wide-ranging therapeutic and diagnostic markets. KLH is both an active pharmaceutical ingredient (API) in many
new immunotherapies (targeting cancer, immune disorders, Alzheimer's and inflammatory diseases) as well as a finished product for
measuring immune status. Stellar is unique in its proprietary methods, facilities, and KLH technology. The company is committed
to meeting the growing demand for commercial-scale supplies of GMP grade KLH, ensuring environmentally sound KLH production, and
developing KLH-based active immunotherapies. Stellar KLH is a trademark of Stellar Biotechnologies.
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Stellar Forward-Looking Statements
This press release may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements may be identified by the use of words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," "may," "will," "would,"
"could," "should," "might," "potential," or "continue" and variations or similar
expressions. Readers should not unduly rely on these forward-looking statements, which are not a guarantee of future performance.
There can be no assurance that forward-looking statements will prove to be accurate, as all such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause actual results or future events to differ materially from
the forward-looking statements. Such risks include, but may not be limited to: general economic and business conditions; technology
changes; competition; changes in strategy or development plans; availability of funds and resources; anticipated requirements for
operating capital; governmental regulations and the ability or failure to comply with governmental regulations; changes in trade
policy and international law; the timing of Stellar's or its partners' anticipated results, including in connection with
clinical trials; the ability to meet the goals of Stellar's joint ventures and strategic partnerships; and other factors
referenced in Stellar's filings with securities regulators. For a discussion of further risks and uncertainties related to
the Stellar's business, please refer to Stellar's public company reports filed with the U.S. Securities and Exchange
Commission and the British Columbia Securities Commission. All forward-looking statements are made as of the date hereof and are
subject to change. Except as required by law, Stellar assumes no obligation to update such statements. This press release does
not constitute an offer or solicitation of an offer for sale of any securities in any jurisdiction, including the United States.
Stellar Biotechnologies
| Condensed Interim Consolidated Statements of Operations |
| (Unaudited - Prepared by Management) |
| (Expressed in US Dollars) |
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | March 31, | March 31, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product sales | $ | 13,019 | $ | 326,335 | $ | 154,875 | $ | 782,495 | ||||||||
| Contract services revenue | 50,000 | - | 50,000 | 32,000 | ||||||||||||
| Total Revenues | 63,019 | 326,335 | 204,875 | 814,495 | ||||||||||||
| Expenses: | ||||||||||||||||
| Costs of sales and contract services | 71,443 | 268,901 | 150,008 | 580,964 | ||||||||||||
| Costs of aquaculture | 63,402 | 79,249 | 148,237 | 164,162 | ||||||||||||
| Research and development | 329,371 | 309,062 | 790,236 | 597,911 | ||||||||||||
| General and administrative | 746,360 | 765,066 | 1,678,427 | 1,874,755 | ||||||||||||
| Total Expenses | 1,210,576 | 1,422,278 | 2,766,908 | 3,217,792 | ||||||||||||
| Loss from Operations | (1,147,557 | ) | (1,095,943 | ) | (2,562,033 | ) | (2,403,297 | ) | ||||||||
| Other Income (Loss): | ||||||||||||||||
| Foreign exchange gain (loss) | 35,227 | 226,764 | (42,163 | ) | 117,636 | |||||||||||
| Loss in fair value of warrant liability | - | - | - | (211,956 | ) | |||||||||||
| Other income | 8,653 | 8,169 | 15,647 | 14,004 | ||||||||||||
| Income tax expense | - | - | 800 | 7,200 | ||||||||||||
| Net Loss | $ | (1,103,677 | ) | $ | (861,010 | ) | $ | (2,589,349 | ) | $ | (2,490,813 | ) | ||||
| Loss per common share: | ||||||||||||||||
| Basic and diluted | $ | (0.11 | ) | $ | (0.10 | ) | $ | (0.26 | ) | $ | (0.30 | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | 10,136,258 | 8,448,758 | 10,136,258 | 8,410,835 |
| Condensed Interim Consolidated Balance Sheets |
| (Unaudited - Prepared by Management) |
| (Expressed in US Dollars) |
| March 31, | September 30, | |||||||
| 2017 | 2016 | |||||||
| Assets: | ||||||||
| Cash, cash equivalents and short-term investments | $ | 8,595,586 | $ | 11,405,698 | ||||
| Other current assets | 753,098 | 693,957 | ||||||
| Noncurrent assets | 874,305 | 838,149 | ||||||
| Total Assets | $ | 10,222,989 | $ | 12,937,804 | ||||
| Liabilities and Shareholders' Equity: | ||||||||
| Accounts payable and accrued liabilities | $ | 433,384 | $ | 623,644 | ||||
| Shareholders' equity | 9,789,605 | 12,314,160 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 10,222,989 | $ | 12,937,804 |
| Condensed Interim Consolidated Statements of Cash Flows |
| (Unaudited - Prepared by Management) |
| (Expressed in US Dollars) |
| Six Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2017 | 2016 | |||||||
| Cash Flows Used In Operating Activities: | ||||||||
| Net loss | $ | (2,589,349 | ) | $ | (2,490,813 | ) | ||
| Items not affecting cash: | ||||||||
| Depreciation and amortization | 90,720 | 68,732 | ||||||
| Share-based compensation | 64,794 | 167,329 | ||||||
| Foreign exchange loss | 42,163 | (117,636 | ) | |||||
| Loss in fair value of warrant liability | - | 211,956 | ||||||
| Changes in working capital items | (249,525 | ) | (87,094 | ) | ||||
| Net cash used in operating activities | (2,641,197 | ) | (2,247,526 | ) | ||||
| Cash Flows From Investing Activities: | ||||||||
| Acquisition of property, plant and equipment | (126,876 | ) | (263,242 | ) | ||||
| Purchase of short-term investments | (2,005,570 | ) | (2,005,818 | ) | ||||
| Proceeds on sales and maturities of short-term investments | 2,000,000 | 5,021,827 | ||||||
| Net cash provided by (used in) investing activities | (132,446 | ) | 2,752,767 | |||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from exercise of warrants and options | - | 1,368,260 | ||||||
| Net cash provided by financing activities | - | 1,368,260 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (42,039 | ) | 132,723 | |||||
| Net change in cash and cash equivalents | (2,815,682 | ) | 2,006,224 | |||||
| Cash and cash equivalents - beginning of period | 7,416,904 | 3,955,503 | ||||||
| Cash and cash equivalents - end of period | $ | 4,601,222 | $ | 5,961,727 |