Osiris Therapeutics, Inc.
(
OSIR
) recently provided an update on its development and
commercialization agreement with Genzyme, a
Sanofi
(
SNY
) company, for its phase III candidate, Prochymal.
The update was triggered by Sanofi's R&D update in its
fourth quarter press release. Sanofi, in its press release, said
that it has discontinued the development of Prochymal, a
mesenchymal stem cell being evaluated for graft-versus-host disease
(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 is yet to receive any
communication from Sanofi regarding the termination of their
agreement, Osiris has, in fact, gone ahead and 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. We note that besides GvHD, Prochymal
is being evaluated for a range of indications including type I
diabetes, Crohn's disease, acute myocardial infarction and acute
radiation syndrome.
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
hematological malignancies.
We currently have a Neutral recommendation on Osiris, which
carries a Zacks #3 Rank (short-term Hold rating). We expect Osiris
shares to be negatively impacted by Sanofi's announcement regarding
the discontinuation of Prochymal for GvHD.
OSIRIS THERAPTC (
OSIR
): Free Stock Analysis Report
SANOFI-AVENTIS (
SNY
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research