Maryland Community Newspapers Online
Stem cell company Osiris Therapeutics is in the midst of a "huge" two-year stretch, but it still won't directly benefit if President Obama lifts the federal ban on funding most stem cell research, company executives say.
Osiris, a 17-year-old company in Columbia, is the rare biotech that in 2008 put lots of money in the bank, while it expects huge dividends in 2009 by moving therapeutic products to the brink of commercial marketing.
"The financial crisis has been pretty brutal, but we have been able to avoid most of it through a good business model and sound science," said Josh Reece, a scientist and investment relations director at Osiris.
Meanwhile, Obama has promised to lift the ban on federally funded embryonic stem cell research imposed by then-President Bush nearly eight years ago.
Lifting the ban wouldn't affect Osiris directly, Reece said, because the company is using adult stem cells, not embryonic stem cells.
"However, [the promise of lifting the ban] is great for research in general, especially for someone doing research on embryonic stem cells," he said.
Osiris has no immediate plans to shift to embryonic stem cells because its intellectual property and focus are on adult stem cells, specifically the mesenchymal stem cells. Such cells can develop into connective tissue, blood vessels and lymphatic tissue.
"As a publicly funded company that's trying to get products to market, and as a biotech company in general, we are not looking to get federal grant funding," Reece said.
Regardless of the current federal stem cell policy, the U.S. is still the leader in the field, said Peter Friedli, chairman and co-founder in 1992 of Osiris, and a major funding source.
Obama's "early signal that he will lift the federal ban on embryonic stem cell funding was very good news" because "it brings more money into the field," Friedli said.
The debate over embryonic stem cell research is "another barrier that we face, educating people and letting them know that the source of our product is unlimited and non-controversial," Reece said.
Developing embryonic stem cell treatments has further to go, said Edward M. Rudnic, chairman of the Tech Council of Maryland and former CEO of MiddleBrook Pharmaceuticals in Germantown.
"I think what a lot of people are anticipating are those pathways of research that have not really opened in a big way yet," Rudnic said, as there has not yet been "marked applications potential" in the embryonic stem cell field. Most of the effort going into embryonic stem cell research hasn't shown the same level of results as with adult stem cells, he said.
That potential for adult stem cell treatments is seen at Osiris, where "it's full speed ahead," Reece said, thanks to deals in 2008 that are funding its clinical trials.
The company signed a $1.4 million partnership with Genzyme Corp. of Cambridge, Mass., for developing and commercializing two adult stem cell therapies from Osiris, Prochymal and Chondrogen, which could treat diseases while controlling inflammation, promoting tissue regeneration and preventing scarring.
Genzyme will market the products in Europe while Osiris retains sales rights in the U.S. and Canada. Genzyme paid Osiris $130 million in licensing fees and agreed to more than $1 billion in future milestone payments.
Signing on with "such a fantastically large corporation" such as Genzyme "has a lot of validation for what we are doing," Reece said.
On Thursday, Osiris announced positive two-year results in its trial evaluating Prochymal for treating acute myocardial infarction, a heart ailment.
"This study adds convincing long-term data to the excellent safety profile of Prochymal, having now treated hundreds of patients in trials over the past decade," C. Randal Mills, president and CEO, said in a statement. "We are now advancing this program into a larger phase 2 trial, focusing on patients with more severe heart damage."
Also last year, Osiris sold its Osteocel tissue culturing business to NuVasive Inc. of San Diego for an initial $85 million, plus an 18-month product supply agreement worth an additional $52 million.
The new funding is timely because running clinical trials is a very expensive proposition. Reece expects 2009 to be "a huge year for us" because the company is expecting good results in phase 3 clinical stages of two of its leading therapy candidates.
It completed its enrollment of 240 patients in a trial of Prochymal to treat a life-threatening condition called graft vs. host disease that afflicts some bone marrow transplant patients. The Food and Drug Administration granted Osiris fast-track approval status and the company hopes to get all of its trial data to the FDA this year.
It also hopes to complete its enrollment of 260 patients in 2009 to treat Crohn's disease, an inflammatory digestive disorder, with Prochymal.
While many small biotechs are struggling in the recession, Osiris seems on the upside of the state's industry, according to Rudnic's assessment.
"I think the one differentiation is that those that raised the money before 2008 are in good shape," he said.
Raising venture capital in 2009 "will be extremely challenging. It's the same old story in biotech: You raise money when you can," he said.
Osiris, with 180 employees, reported $15.2 million in revenue for 2007, the latest complete year available. Net income in the third quarter of 2008 was $5.2 million, compared with a net loss of $10.3 million for the same quarter in 2007. The company plans to release its fourth-quarter and full-year results Feb. 27.