Osiris Therapeutics defer stock offering Biotechnolgy firm lTC blames volatility, unfavorable market.

December 10, 1997|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Osiris Therapeutics Inc. yesterday withdrew its plans to complete an initial public offering, citing general market volatility and unfavorable conditions for new biotechnology issues.

The company intended to go public this month, hoping to raise about $30 million to further research and development efforts, said James S. Burns, Osiris' chief executive officer.

The company moved to Baltimore in 1995 from Cleveland.

Instead, the company will consider an IPO in the next six to 12 months. In the meantime, Burns said, there's enough cash to carry the company through the next four years.

Osiris signed a deal recently with pharmaceutical giant Novartis Corp. that provides it with $50 million over five years to fund research.

"We can afford to make the decision to wait until market conditions improve," Burns said. "In the meantime, we'll make progress and build more value."

Osiris is developing therapies to regenerate bone and other connective tissue cells using prototype cells known as stem cells. These cells play a key initial role in the formation of bone, cartilage and other structural and connective tissues.

This year, there has been more market interest in high-technology and information-technology companies than biotechnology companies, said Scott Morrison, the Pacific Northwest director of life sciences for Ernst & Young LLP.

"The market responds warmly to products that are further along in development," he said. "Early-stage concepts do not sell well."

There has been nearly a 50 percent decline in the number of biotechnology IPOs this year compared with last year, Morrison said.

From July 1996 to June 1997, there have been 27 biotechnology IPOs that raised $700 million. From July 1995 to June 1996, there were 61 offerings that raised $1.7 billion.

Pub Date: 12/10/97

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