James S. Burns, a veteran of the pharmaceutical industry, took on an intriguing, if not risky, assignment in 1993: Launch a new company, indeed a new area of medicine, based on a startling and seemingly futuristic discovery.
The premise for the venture -- a way to regenerate bone and other connective tissue cells -- had emerged in 1990 in a professor's laboratory at Case Western Reserve University in Cleveland.
The professor, Arnold Caplan, had determined that the body produces certain types of cells that serve as "seed" cells. They divide repeatedly and eventually differentiate from one another, forming highly specialized cells for a specific job, such as replenishing bone.
The cells were dubbed mesenchymal stem cells. They are the reason, says one molecular biologist, "why we don't fall apart."
The discovery, say medical experts, was groundbreaking.
Burns, a co-founder of HealthCare Investment Corp., a New Jersey-based venture capital firm with a track record of backing successful biotech start-ups, paid Caplan several visits.
Caplan convinced Burns that his work on stem cells showed it might be possible to harness these seed cells in such a way that they could be used to grow back tissue damaged from chemotherapy or from degenerative diseases such as osteoporosis.
Burns, who holds a master's degree in biological science, reasoned that there could be important medical applications for the technology.
Says Burns, "We didn't set out to just create a new company, but a whole new area of medicine."
Burns and Caplan named the company they formed in 1993 to develop products based on these forerunner cells for the Egyptian god of the "lower world," Osiris.
Osiris Therapeutics Inc. was launched in Cleveland with money Burns had banked away and cash from a New York-based friend and risk taker.
The company was lured to Baltimore in 1995 largely on the strength of a $4.7 million state and city financial package, which allowed Osiris to create a top-flight research and pilot manufacturing facility -- with waterfront views -- in Fells Point.
Today, cash flow is no longer a worry. The company has raised more than $30 million from investors, including $22 million from Swiss investors, such as high-tech financier Peter Friedli.
Powerful ally
Earlier this month, Caplan's discovery and Burns' gamble gained a powerful and wealthy ally: Novartis Corp., the world's No. 1 drug company.
