Osiris Trumpets Its Adult Stem Cell Product
Prochymal Is Being Developed in Many Indications, GvHD Being the Most
Advanced
Querida Anderson
Many still debate the ethics of using embryonic stem cells in medical
research, which has essentially prevented an understanding of their
true potential. Some companies like Osiris Therapeutics
(www.osiristx.
sources for stem cells.
Osiris' stem cell product, Prochymal, is a formulation of mesenchymal
stem cells derived from adult bone marrow. Because of the nature of
stem cells, this represents a therapeutic platform that can be
leveraged in a range of indications.
Prochymal has potential blockbuster status, though the downside is
the extremely novel nature of these treatments. With anything new
comes uncertainty and challenges with development, regulatory
approval, and market acceptance.
These hurdles are some of the reasons that Jason Napodano, senior
biotech analyst at Zacks, has a Hold on Osiris. He also is concerned
about the company's high burn rate. Napodano doesn't believe that the
firm will achieve profitability until 2012, and that is if everything
goes as Osiris plans.
The company is conducting Phase III trials in end-stage graft vs.
host disease (GvHD), early-stage GvHD, and late-stage Crohn's
disease. Osiris is also performing Phase II trials in type 1 diabetes
and acute myocardial infarction and a Phase I study in chronic
obstructive pulmonary disease.
Data from the end-stage GvHD study is expected by Q208 with FDA
registration in H109. Here's where Napodano believes Prochymal could
see its first setback. "FDA has never had to approve a drug like
this." Particularly, it will be looking to gain confidence about the
therapy's long-term safety.
C. Randal Mills, Ph.D., president and CEO, Osiris, is optimistic
about Prochymal's chances. The fact that the therapy has fast track
status, orphan drug status, and is part of the FDA's expanded access
program, adds to his sanguinity.
If Prochymal does break through the regulatory barriers, GvHD
represents an open market. "We expect a steep sales curve because of
the futility of existing agents, which have bad side effects and are
expensive," comments Dr. Mills. He expects commercial pricing to be
roughly $10,000.
While Napodano predicts peak sales of $200M to $300M, he warns that
it may take several years to reach such revenues.
With a successful launch of Prochymal in GvHD, an FDA okay in Crohn's
could be easier, with registration planned for 2010. This segment is
worth $1B, according to Dr. Mills. He believes that, "there may even
be early uptake, as physicians can use it off label." Napodano puts
peak sales at about $400M to $500M, stating that Prochymal is still
early in development and he needs to see more data.
"Before I upgrade the company to a Buy, I would like to see a more
solid balance sheet," Napodano says. Osiris has already burned
roughly $11M this year, and he expects that number to go up to $20M
to $30M by year end. This is not a surprise for a development-
company but it is certainly something to keep track of.
Another issue is the firm's cash balance, $42M as of March 31. "I
don't think that they have enough cash to fund to profitability, and
the company will probably need to raise money later this year or
early next year."
Dr. Mills, however, believes that along with the money the firm will
receive through the sale of Osteocell, Osiris will be able to fund a
substantial portion of development. Osteocell is a bone matrix
product for use in orthopedic indications. Osiris will obtain $35M at
closing, $50M in milestones, and $52M over the next 18 months to
supply Nuvasive, the buyer, with the product.
While money may be tight and challenges are bound to arise, Osiris is
focusing on rigid trials. "About 85 to 86 percent of every dollar is
directly related to clinical research," Dr. Mills notes. "I like to
describe Osiris as a giant engine with four wheels."
http://www.genengne
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StemCells subscribers may also be interested in these sites:
Children's Neurobiological Solutions
http://www.CNSfoundation.org/
Cord Blood Registry
http://www.CordBlood.com/at.cgi?a=150123
The CNS Healing Group
http://groups.yahoo.com/group/CNS_Healing
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