Osiris, Genzyme strike deal for stem cell treatments

November 05, 2008|By Hanah Cho ha | Hanah Cho ha,nah.cho@baltsun.com

Osiris Therapeutics announced yesterday that it has struck a marketing deal with a large biotechnology firm for two adult stem cell treatments worth up to $1.38 billion.

The Columbia company and Massachusetts-based Genzyme Corp. have paired up to develop and sell Prochymal and Chondrogen, two late-stage adult stem cell treatments for several disorders.

Osiris developed the treatments but will get financial support from Genzyme for further advancement and commercialization of the products. Under the deal, Osiris will sell the products in the U.S. and Canada. Genzyme will sell the treatments in other countries and pay Osiris $130 million initially. Osiris also could earn up to $1.25 billion if certain goals are met, such as sales targets and regulatory approvals.

"This relationship greatly enhances our ability to effectively introduce this groundbreaking technology on a global basis," C. Randal Mills, Osiris' president and chief executive officer, said in a statement.

Edward Tenthoff, an analyst at Piper Jaffray & Co., told Bloomberg News that the deal would be the biggest ever in the field of adult stem cell therapy, which takes cells from mature tissues instead of embryos.

Genzyme focuses on treatments for rare genetic disorders.

Osiris was founded in 1992 and went public in 2006. Its stock, which rose as high as $19.70 yesterday, settled down in late trading to close at $15.93. Shares gained 43 cents, or 2.8 percent.

Prochymal is in late-stage clinical trials as a treatment for a type of Crohn's disease, which is characterized by chronic intestinal inflammation.

The treatment also is in clinical tests as a therapy for two types of graft-versus-host disease, a deadly complication affecting about half of those who receive bone marrow transplants each year.

New trials for Chondrogen as a treatment for arthritis of the knee are expected to begin soon, the company said.

Also yesterday, Osiris reported a third-quarter profit of $5.3 million, compared with a net loss of $10.4 million in the year-ago period.

The earnings for the three months ended Sept. 30 were helped by a $25.5 million gain on the sale of discontinued operations. The company sold a bone regeneration treatment called Osteocel to San Diego's NuVasive Inc. in July.

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