Osiris Therapeutics Inc. (OSIR) reported first quarter earnings of 12 cents per share, just above the Zacks Consensus Estimate of 11 cents and well above the year-ago earnings of 7 cents. Earnings were mainly driven by lower operating expenses.
Revenues for the quarter came in at $10.4 million, shy of the Zacks Consensus Estimate of $11 million and below the prior-year figure of $11.4 million.
Quarterly Highlights
First quarter 2011 revenues included the recognition of $10 million under the company’s agreement with Genzyme, now a part of Sanofi-Aventis (SNY).
Research and development (R&D) expenses declined significantly during the quarter to $4.7 million. The completion of patient enrolment for phase III trials led to the decline in R&D spend. General and administrative expenses were marginally lower at $1.7 million from $1.8 million recorded in the prior-year period.
Pipeline Update
Osiris has made significant progress with stem cell therapies. The upside potential to lead candidate Prochymal could be enormous. Osiris is studying Prochymal for several indications including acute and steroid refractory graft versus host disease (GvHD), Crohn’s disease, acute myocardial infarction, chronic obstructive pulmonary disease, and type I diabetes, most of which are blockbuster indications. Osiris has orphan drug designation in the US for the diabetes indication.
Osiris has submitted a statistical analysis plan (SAP) for Prochymal for the treatment-resistant GvHD indication in pediatric patients to the US Food and Drug Administration (FDA). The analysis will be included in the company’s Biological License Application (BLA). A pre-BLA meeting was held with the FDA in February. The regulatory body has asked Osiris to submit additional information prior to filing for approval of Prochymal as a treatment for GvHD. Osiris is working on providing the information required by the FDA.
Meanwhile, Osiris is seeking approval for Prochymal in Canada for GvHD. In January, Health Canada informed Osiris that it had a few questions on the candidate for the said indication. The company has filed a response to the regulatory body’s questions. Osiris had filed a New Drug Submission (NDS) with Health Canada during the second quarter of 2010.
Osiris has orphan drug status for Prochymal as a treatment for GvHD in Europe, the US, Australia, Canada and Switzerland. According to the company, Europe, the US, Australia, India and Brazil are the largest markets for GvHD.
As far as the Crohn’s disease indication is concerned, Osiris said that enrolment for a phase III study continues. An interim analysis of the study showed that one of the Prochymal dosage arms achieved statistical significance in the primary endpoint.
Meanwhile, the company completed enrolling patients in two of its phase II studies, one of which will evaluate Prochymal in patients with new onset type I diabetes. The second phase II trial is studying Prochymal for the treatment of severe myocardial infarction. Osiris expects to report data from this trial in the fourth quarter 2011/first quarter 2012.
Neutral on Osiris
We currently have a Neutral recommendation on Osiris, which carries a Zacks #3 Rank (short-term Hold rating). While we are impressed with the company’s progress in cell based therapies, we note that any pipeline setbacks would weigh heavily on the stock.
OSIRIS THERAPTC (OSIR): Free Stock Analysis Report
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