Osiris Therapeutics Inc.
) reported a first quarter loss of 4 cents per share, narrower than
the Zacks Consensus Estimate of a loss of 9 cents. However,
year-ago earnings were 12 cents per share. Revenues for the quarter
came in at $4.6 million, well above the Zacks Consensus Estimate of
$3 million, but below the year-ago revenues of $10.4 million.
First quarter 2012 revenues included the amortization of license
fees under the company's collaboration agreements. Biosurgery
product sales came in at $1.14 million, up 49%.
Research and development (R&D) expenses declined 14.9%
during the quarter to $4 million. General and administrative
expenses declined 11.8% 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 U.S. 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 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 an independent
expert advisory panel voted in favor of approving Prochymal. Health
Canada should be out with a response in May.
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 in the second quarter of 2012.
Low Visibility on Sanofi Agreement
We continue to have low visibility on the status of Osiris'
development and commercialization agreement with Genzyme, a
) company, for Prochymal. Earlier this year, Sanofi, in its fourth
quarter press release, had said that it has discontinued the
development of Prochymal for GvHD. Osiris said that the
announcement was made without its knowledge or advice.
Osiris' President and CEO 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 U.S. 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
Osiris did not provide any additional information on the
situation on its first quarter call. We expect investor focus to
remain on the resolution of this issue.
OSIRIS THERAPTC (OSIR): Free Stock Analysis
SANOFI-AVENTIS (SNY): Free Stock Analysis
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