Osiris Therapeutics Inc.
) reported fourth quarter earnings of 15 cents per share, beating
the Zacks Consensus Estimate of 11 cents and the year-ago earnings
of 13 cents. Revenues for the quarter came in at $10.3 million,
below the Zacks Consensus Estimate of $11 million and the year-ago
revenues of $10.7 million.
Full year earnings came in at 45 cents per share, above the
year-ago earnings of 40 cents and the Zacks Consensus Estimate of
41 cents. Revenues came in at $41.1 million, below the Zacks
Consensus Estimate of $42 million and the year-ago revenues of $43
Fourth quarter 2011 revenues included the amortization of
license fees under the company's collaboration agreements.
Biosurgery product sales came in at $0.8 million.
Research and development (R&D) expenses declined 16% during
the quarter to $4.2 million. General and administrative expenses
declined 16.7% to $1.5 million
Osiris has made significant progress with stem cell therapies.
The upside potential to lead candidate Prochymal could be enormous.
Osiris is studying Prochymal for several indications including
acute and steroid refractory graft versus host disease (GvHD),
Crohn's disease, acute myocardial infarction, and type I diabetes,
most of which are blockbuster indications.
Osiris is working on submitting an application to the US Food
and Drug Administration (FDA) for the approval of Prochymal as a
treatment for GvHD. The company is also looking to develop a
confirmatory program that will increase the chances of meeting the
requirements of all regulatory agencies.
Meanwhile, Osiris is seeking approval for Prochymal in Canada
for GvHD. Last year, Health Canada had informed Osiris that it had
a few questions on the candidate for the said indication. The
agency had also raised questions regarding post-marketing
commitments. Osiris has filed a complete response to the inquiries
from the Canadian regulatory authority. The company said that
Health Canada is seeking external advice and has appointed an
expert advisory panel to assist them with the review. The panel is
close to completing its work - a decision should be out soon.
As far as the Crohn's disease indication is concerned, Osiris
said that enrolment for a phase III study continues. An interim
analysis of the study showed that one of the Prochymal dosage arms
achieved statistical significance in the primary endpoint.
Meanwhile, the company completed enrolling patients in a phase
II trial that is studying Prochymal for the treatment of severe
myocardial infarction. Osiris expects to report data from this
trial soon. As far as the new onset type I diabetes study is
concerned, Osiris provided an update on the phase II study earlier
this year. An interim analysis showed that systemic infusions of
Prochymal were well tolerated at one year by the patients with no
differences in adverse event rates in the Prochymal and placebo
arms. The patients will be followed for two years at which time a
full analysis will be conducted.
Update on Sanofi Agreement
Last month, Osiris had provided an update on its development and
commercialization agreement with Genzyme, a
) company, for Prochymal. The update was triggered by Sanofi's
R&D update in its fourth quarter press release. Sanofi, in its
press release, had said that it has discontinued the development of
Prochymal. Osiris said that the announcement was made without its
knowledge or advice.
Osiris had clarified that Prochymal's development has not been
discontinued. Although Osiris had not received any communication
from Sanofi regarding the termination of their agreement, Osiris
notified Sanofi that it is treating Sanofi's statement as an
intention to terminate the agreement.
According to Osiris, all rights to Prochymal will return to
Osiris without the company being required to compensate Sanofi.
Osiris believes it can now pursue commercialization agreements for
Prochymal with other parties.
However, following this announcement, Sanofi informed Osiris
that it is not in agreement with Osiris' interpretation of its
fourth quarter R&D update. Osiris has asked Sanofi for a
clarification regarding the matter.
The collaboration agreement with Genzyme was signed in October
2008 for the development and commercialization of Prochymal and
another pipeline candidate, Chondrogen. While Osiris retained the
rights to commercialize the candidates in the US and Canada,
Genzyme gained exclusive rights to commercialize Prochymal and
Chondrogen in all other countries, except Japan, where Osiris has
an agreement with JCR Pharmaceuticals. JCR Pharmaceuticals holds
rights to Prochymal for the treatment of patients with
Neutral on Osiris
We currently have a Neutral recommendation on Osiris, which
carries a Zacks #3 Rank (short-term "Hold" rating). We expect
investor focus to remain on the outcome of the Sanofi
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