Stem Cell Firm Marks A Week of Milestones
Stem cell research firm Osiris Therapeutics passed two major milestones last week, posting its first profit and announcing a deal with a Cambridge, Mass., biotech that could be worth up to $1.25 billion.
The Columbia company will get $130 million upfront from Genzyme, which is paying for the rights to sell new two Osiris drugs outside of Canada and the United States. Genzyme has developed international relationships that Osiris believes will be key in getting its two injectable therapies to health-care providers. Prochymal is in late-state clinical trials, while Chondrogen is in earlier stages. Subsequent payments are dependent on steps in the approval process of the Food and Drug Administration.
Prochymal "is barreling toward market very, very quickly, and we needed a way to line up distribution on a global scale," said C. Randal Mills, president and chief executive of Osiris.
Genzyme will also pay 40 percent of the cost of late-stage clinical trials for the drugs, giving Osiris cash it needs to continue development, company officials said.
At least one analyst cautioned, however, that failure or delays are still possible.
"We now estimate [Osiris] will have enough cash to sustain operations through 2010," wrote Jefferies & Co. analyst Eun K. Yang. But, Yang said, it's still hard to assess Prochymal's effectiveness compared with other therapies.
Prochymal is on a fast-track approval process with the FDA for use as a treatment for bone marrow transplant rejection and for Crohn's disease, which is marked by intestinal inflammation. Mills said he is looking for approval in late 2009 or early 2010.
"This new arrangement really is about the fact that [Prochymal] we think is really a lifesaving drug," Mills said. "I'll visit little children we treat in hospitals, see a kid on a ventilator, skin peeling, intensive hemorrhaging, and three weeks later the kid's walking around the room and eating."
Both Prochymal and Chondrogen are derived from bone marrow cells, which are harvested from healthy adults, thereby avoiding the controversies associated with embryonic stem cell research. Chondrogen is undergoing clinical trials as a treatment for severe knee arthritis.
Last week, Osiris reported a third-quarter profit of $5.3 million, compared with a year-ago period net loss of $10.4 million. Shares closed Friday at $17.55, up more than 15 percent for the week.
-- Anita Huslin