Just a few weeks after gaining approval in Canada, Osiris Therapeutics, Inc.’s stem cell therapy, Prochymal, gained approval in New Zealand. Prochymal gained approval for the treatment of acute graft-vs-host disease (GvHD) in children.
Osiris had submitted its marketing application to Medsafe, the medical regulatory agency in New Zealand, in May 2011. Prochymal was granted priority review status.
Prochymal is the first manufactured stem cell product to gain approval and the first treatment to gain approval for GvHD.
Besides being approved in Canada and New Zealand, we note that Prochymal is available under an Expanded Access Program (EAP) in seven countries including the US.
Prochymal’s approval in New Zealand is a boost for Osiris. Shares were up 13.75% on the news. Prochymal is the lead candidate at Osiris and represents significant commercial potential. Prochymal is currently being evaluated for other indications as well including refractory Crohn’s disease (phase III), type I diabetes, and myocardial infarction (heart attack – phase II).
We currently have low visibility on the status of Osiris’ development and commercialization agreement with Genzyme, a Sanofi (SNY - Analyst Report) 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 and 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.
We currently have a Neutral recommendation on Osiris, which carries a Zacks #3 Rank (short-term Hold rating).