Osiris Therapeutics Announces Preliminary Results for Prochymal Phase III GvHD Trials

Osiris Therapeutics Announces Preliminary Results for Prochymal Phase III GvHD Trials

COLUMBIA, Md.--(Business Wire)--
Osiris Therapeutics, Inc. (NASDAQ: OSIR) today announced preliminary results for
two phase III trials evaluating Prochymal for the treatment of acute graft
versus host disease (GvHD). GvHD, the most common complication of bone marrow
transplantation, is a life-threatening disease for which there is currently no
approved treatment. Prochymal showed significant improvements in response rates
in difficult-to-treat liver and gastrointestinal GvHD, however neither trial
reached its primary endpoint.

Key findings from the GvHD trials include:

* There was no statistical difference between Prochymal and placebo on the
primary endpoints for either the steroid-refractory (35% vs. 30%, n=260) or the
first-line (45% vs. 46%, n=192) GvHD trials.
* The primary endpoint for the steroid-refractory GvHD trial (durable complete
response) for the per-protocol population approached statistical significance
(40% vs. 28%, p=0.087, n=179).
* In patients with steroid-refractory liver GvHD, treatment with Prochymal
significantly improved response (76% vs. 47%, p=0.026, n=61) and durable
complete response (29% vs. 5%, p=0.046).
* Prochymal significantly improved response rates in patients with
steroid-refractory gastrointestinal GvHD (88% vs. 64%, p=0.018, n=71).
* In pediatric patients, Prochymal showed a strong trend of improvement in
response rates (86% vs. 57%, p=0.094, n=28).

"These data are still preliminary and further analysis is needed to gain a full
appreciation of the results of these rigorous, double-blind, placebo-controlled
trials," said C. Randal Mills, Ph.D., President and Chief Executive Officer of
Osiris Therapeutics. "We are encouraged to see Prochymal significantly improve
response rates above standard of care in GvHD patients who currently have no
good treatment options. We will meet with the FDA as soon as possible to discuss
the most appropriate and efficient path forward for Prochymal in this
life-threatening indication."

Protocol 265 was designed to evaluate Prochymal as a first-line agent for the
treatment of acute GvHD in combination with steroid therapy. The majority of
patients in this trial were suffering from skin GvHD, which responded
significantly better to steroids than had been previously reported in controlled
trials. This high response rate to standard of care diminished the potential for
Prochymal to demonstrate an effect.

In the more severe, steroid-refractory GvHD setting (protocol 280), the benefit
of adding Prochymal to second-line therapy was evaluated. Prochymal approached
statistical significance for the primary endpoint in the per-protocol patient
population which is the group of patients that met all of the study protocol
requirements, such as inclusion and exclusion criteria. Additionally, Prochymal
significantly improved response rates to liver and gastrointestinal GvHD, for
which there is currently no known reliable therapy. Notably, the Prochymal
cohort had more severe GvHD (27% of Prochymal patients had grade D GvHD, the
most severe form, vs. 16% of placebo patients, p=0.05).

Based upon the results of the steroid-refractory GvHD trial, Osiris plans to
file an amendment with the FDA to the current expanded access program,
broadening the entry criteria to include patients with severe GvHD of the liver.

Webcast and Conference Call

The Company has scheduled a webcast and conference call to discuss the GvHD
clinical program today, September 8, 2009, at 9:00 AM ET. To access the webcast,
visit the Investor Relations section of the company`s website at
http://investor.osiris.com/events.cfm. Alternatively, callers may participate in
the conference call by dialing (888) 352-6798 (U.S. participants) or (719)
325-2376 (international participants).

A replay of the conference call will be available approximately two hours after
the completion of the call through September 15, 2009. Callers can access the
replay by dialing (888) 203-1112 (U.S. participants) or (719) 457-0820
(international participants). The audio replay passcode is 8379243. To access a
replay of the webcast, visit the Investor Relations section of the company's
website at http://investor.osiris.com/events.cfm.

About the Phase III Acute Steroid-Refractory Trial (Protocol 280)

The Phase III trial evaluated the safety and efficacy of Prochymal in
conjunction with standard of care for treatment of patients who had failed to
respond to corticosteroid treatment for acute GvHD. The clinical trial is a
double-blind, placebo-controlled study. Patients were randomized to either
Prochymal or placebo at a 2:1 ratio. GvHD assessments performed according to the
International Bone Marrow Transplant Registry (IBMTR) were used in the trial to
detect improvements in subjects treated with Prochymal. The primary endpoint for
this trial is durable complete response defined as complete resolution of GvHD
for a duration of at least 28 days. The trial enrolled 260 patients from 72
leading bone-marrow transplant centers across the United States, Canada, Europe
and Australia.

About the Phase III Acute GvHD Trial (Protocol 265)

The Phase III double-blind, placebo controlled trial evaluated the safety and
efficacy of Prochymal in conjunction with steroid therapy in patients with newly
diagnosed acute GvHD, grades B-D. The primary endpoint of the trial is the
proportion of patients surviving at least 90 days that achieve a complete
response when Prochymal is added to steroid therapy as compared to those
receiving steroids alone. Patients are considered treatment failures if they do
not achieve a complete response within 28 days of initiating treatment, if the
steroid dose is increased or other immunosuppressive agents are added, or if the
patient does not survive 90 days following initial treatment. The trial enrolled
192 patients from 52 leading transplant centers across the United States, Canada
and Australia.

About GvHD

GvHD represents a major unmet medical need with no approved treatment. It is the
most common complication of allogeneic (using cells from a family member,
unrelated donor or cord blood unit) hematopoietic stem cell transplantation
(HSCT). GvHD occurs when immune cells from the donated cell population (the
graft) attack the transplanted patient`s body cells (the host) because the
recipient cells are seen as "foreign." Organs that are mainly affected by the
immunological attack are the gastrointestinal tract, skin, and liver.

Acute GvHD is a potentially life-threatening complication that arises in
approximately 50% of all patients who receive an allogeneic HSCT. Severe acute
steroid-refractory GvHD is fatal in up to 90 percent of cases. Current
treatments are marginally effective with significant side effects.

About Prochymal

Prochymal is a preparation of mesenchymal stem cells (MSCs) formulated for
intravenous infusion. The MSCs utilized in Prochymal are isolated from the bone
marrow of healthy young adult donors, avoiding the controversy surrounding
embryonic and fetal cell sources. They are grown in culture, permitting
large-scale production. Because the cells can be expanded, thousands of doses
can be produced from a single donation. Studies suggest MSCs are able to safely
facilitate tissue repair through a number of mechanisms. Specifically, these
studies have indicated that MSCs are able to down-regulate severe inflammation
and work at the cellular level to rebuild damaged tissue through the coordinated
release of tissue specific growth factors.

Prochymal is being evaluated in three, double-blind, placebo-controlled Phase
III studies, including steroid-refractory GvHD, acute GvHD and Crohn`s disease.
Prochymal has been granted Fast Track status by the FDA for GvHD and Crohn`s
disease, and is the first stem cell product to receive FDA expanded access
approval, making the product available now to children with life-threatening
GvHD. Prochymal also obtained Orphan Drug status by FDA and the European
Medicines Agency for GvHD. Prochymal is also being studied in Phase II trials
for the treatment of acute myocardial infarction, COPD and type 1 diabetes.

About Osiris Therapeutics

Osiris Therapeutics, Inc. is the leading stem cell therapeutic company focused
on developing products to treat serious medical conditions in the inflammatory,
orthopedic and cardiovascular areas. The Company's pipeline of internally
developed biologic drug candidates under evaluation includes Prochymal for
inflammatory, autoimmune, and cardiovascular indications, as well as Chondrogen
for arthritis in the knee. Osiris is a fully integrated company, with
capabilities in research, development, manufacturing, and distribution of stem
cell products. Osiris has developed an extensive intellectual property portfolio
to protect the company's technology including 49 U.S. patents each having one or
more foreign counterparts. Osiris, Prochymal and Chondrogen are registered
trademarks of Osiris Therapeutics, Inc. More information can be found on the
company's website, www.Osiris.com. (OSIR-G)

In November 2008, Osiris and Genzyme announced a strategic alliance for the
development and commercialization of Prochymal and Chondrogen. Under the terms
of the agreement, Osiris retains commercialization rights to Prochymal and
Chondrogen in the United States and Canada, with Genzyme having these rights in
all other countries.

Safe Harbor Statement

This press release contains forward-looking statements. Forward-looking
statements include statements about our expectations, beliefs, plans,
objectives, intentions, assumptions and other statements that are not historical
facts. Words or phrases such as "anticipate," "believe," "continue," "ongoing,"
"estimate," "expect," "intend," "may," "plan," "potential," "predict," "project"
or similar words or phrases, or the negatives of those words or phrases, may
identify forward-looking statements, but the absence of these words does not
necessarily mean that a statement is not forward-looking. Examples of
forward-looking statements include, but are not limited to, statements regarding
the following: our product development efforts; our clinical trials and
anticipated regulatory requirements and the ability to successfully navigate
these requirements; the success of our product candidates in development; status
of the regulatory process for our biologic drug candidates; implementation of
our corporate strategy; our financial performance; our product research and
development activities and projected expenditures, including our anticipated
timeline and clinical strategy for Prochymal, Chondrogen and our other MSC and
biologic drug candidates; our cash needs; patents and proprietary rights; the
safety and ability of our potential products to treat disease and the results of
our scientific research; our plans for sales and marketing; our plans regarding
our facilities; types of regulatory frameworks we expect will be applicable to
our potential products; and results of our scientific research. Forward-looking
statements are subject to known and unknown risks and uncertainties and are
based on potentially inaccurate assumptions that could cause actual results to
differ materially from those expected or implied by the forward-looking
statements. Risks and uncertainties related to our Collaboration Agreement with
Genzyme for the development and commercialization of Prochymal and Chondrogen
include, among others: typical business transactional risks; risks related to
product development and clinical trial design, performance and completion;
uncertainty of the success of Prochymal and Chondrogen in clinical trials and
their ability to treat disease; Genzyme`s early termination and opt-out rights;
the ability of Osiris and Genzyme to successfully navigate regulatory
requirements and to manufacture and commercialize products; and the uncertainty
as to our ability to successfully perform under the collaborative arrangement
and earn milestone and royalty payments thereunder. Our actual results could
differ materially from those anticipated in forward-looking statements for many
reasons, including the factors described in the section entitled "Risk Factors"
in our Annual Report on Form 10-K and other Periodic Reports filed on Form 10-Q,
with the United States Securities and Exchange Commission. Accordingly, you
should not unduly rely on these forward-looking statements. We undertake no
obligation to publicly revise any forward-looking statement to reflect
circumstances or events after the date of this press release or to reflect the
occurrence of unanticipated events.