Stem cell use part of therapy

City biotech Osiris incorporates adult cells in bone graft

September 23, 2005|By Tricia Bishop | Tricia Bishop,sun reporter

As politicians, ethicists and scientists continue to debate the pros and cons of developing treatments based on embryonic stem cells, a Baltimore biotechnology business has launched what industry analysts say is the first commercial product in the United States containing adult stem cells.

Called Osteocel, the bone-regenerating therapy is also the first product that could earn significant revenue for its creator, privately held Osiris Therapeutics Inc. The company, which has thus far sold cells only to researchers, and its distributor, Blackstone Medical Inc. of Massachusetts, announced the news yesterday.

"They get the bragging rights," said Alastair Mackay, a former Osiris scientist who now works as an equities analyst at GARP Research Corp. in Towson.

FOR THE RECORD - An article in Friday's Business section about a stem cell treatment incorrectly described embryonic stem cells as those taken from aborted fetuses. Embryonic stem cells are derived from embryos created when an egg is fertilized in an artificial environment, such as a test tube, not embryos taken from a woman's body. The Sun regrets the error.

Unlike embryonic stem cells, adult stem cells haven't drawn ethical concerns or much debate in national political circles because they're typically taken from grown-up volunteers rather than aborted fetuses. Some scientists say they may also not have the regenerative potential of their embryonic counterparts, though the science is still developing.

Osiris has said little about the launch of Osteocel because "it's not a pure stem cell product," chief executive C. Randall Mills said. Still, he added, it could make doctors comfortable using stem cells in their practices and, more importantly, make "surgeons and customers aware of Osiris technology."

Osteocel is something of a hybrid. Marketed for use in certain spinal surgeries requiring bone fusion, it's a product made from donor bone and the stem cells inside it, which can transform themselves into more bone.

"When you're trying to replace and regrow bone, it gives it a head start," Mills said.

Doctors typically perform bone grafts by taking healthy bone from another spot on the patient - typically the hip - and grafting it elsewhere. But that means two surgeries, and two painful sites on the body. Other options include using dead or synthetic bone, but they don't contain the stem cells.

Osiris has found a way to take bone from a newly deceased donor for the grafts, while preserving the stem cells. The market for Osteocel potentially could encompass anyone who needs a significant amount of bone regrown - accident victims, people requiring hip replacements. But Osiris said its ability to supply Osteocel is limited, so it is sticking with the spine operations for now.

A report in May by Swiss investment company New Venturetec, Osiris' largest backer, estimated that Osteocel could be worth $2 million in revenue this year, $10 million by next year and that it will peak at about $50 million in 2009 because of supply constraints.

By then, Osiris is hoping to have its first true stem-cell product on the market: Prochymal, which is intended to prevent a sometimes fatal reaction to bone-marrow transplants. The Food and Drug Administration has given the drug a "fast track" designation to expedite its development and potential approval. Osiris plans to use the Osteocel revenue to help pay for clinical trial costs, which run about $20 million per year.

No such approval was required for Osteocel because it is not considered a drug. Osiris only had to register with the Human Cellular and Tissue Based Products division of the FDA to move forward. Because of that, some don't think it quite qualifies as the first stem-cell product.

"With a pure product, it's going to be treated as a drug, and that's going to have to go through an [intense approval process]," said Ren Benjamin, a biotechnology analyst with Rodman & Renshaw LLC., a New York investment bank.

When that happens, he expects a circus-load of fanfare: "It will generate the enthusiasm that's needed within the [stem-cell therapy] space."

tricia.bishop@baltsun.com

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