We recently reiterated our Neutral recommendation on
Osiris Therapeutics, Inc.
). Osiris, a stem cell therapeutic company, is focused on the
development and marketing of products for the treatment of medical
conditions in the inflammatory, orthopedic, wound healing and
Osiris received a major boost recently with its lead stem cell
therapy, Prochymal, gaining approval in Canada and New Zealand for
the treatment of acute graft-vs-host disease (GvHD) in
Prochymal is being developed for multiple indications including
acute myocardial infarction, type I diabetes, Crohn's disease and
the repair of gastrointestinal injury resulting from radiation
exposure. We think Prochymal could be a blockbuster drug with a
While we are impressed with the company's progress in developing
stem cell based therapies, we note that any pipeline development
has attendant risks. With Osiris depending on Prochymal for growth,
disappointing clinical trial results or regulatory setbacks would
be a major blow for the company.
Meanwhile, Osiris' collaboration agreement with Genzyme, a
), remains under a cloud. In February 2012, Osiris had provided an
update on its development and commercialization agreement with
Genzyme. The update was triggered by Sanofi's R&D update in its
fourth quarter press release.
Sanofi 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, the company 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 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.
We maintain our Neutral recommendation on Osiris as we await
more visibility on pipeline and regulatory progress in the US.
Moreover, the lack of visibility regarding the status of the Sanofi
deal concerns us. We expect investor focus to remain on the outcome
of the Sanofi collaboration.
OSIRIS THERAPTC (OSIR): Free Stock Analysis
SANOFI-AVENTIS (SNY): Free Stock Analysis
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