Canada hands Osiris historic approval for stem-cell drug

Osiris Therapeutics ($OSIR) has made history. The Columbia, MD-based biotech has won the first approval of an off-the-shelf therapy made with stem cells, a major milestone for the field but one with unremarkable business implications for the developer.

Canadian authorities have stamped an approval on Osiris' Prochymal, a drug made with mesenchymal stem cells from adult donors, to treat certain children with potentially lethal graft versus host disease (GvHD), the company announced Thursday. The stem-cell drug has approval only for children whose disease can't be controlled with steroids, which doctors typically use to ward off the immune attacks from the ailment. Osiris will have to conduct post-approval clinical studies as a condition of the market nod for the treatment in Canada.

"This is the first regulatory approval of a stem-cell drug--where the active ingredient of the drug is a stem cell--in the world," Osiris CEO Randal Mills said, as quoted by Bloomberg. "It's a huge deal for us and a huge deal for the entire field of stem-cell therapy."

The approval provides a welcome turnaround for Osiris, which has been riddled by a string of recent setbacks. In February French drug giant Sanofi ($SNY) ditched work on Prochymal, for which the company had rights the sell outside of North America, The New York Times reported. The FDA last year rejected Osiris' bid for approval of the therapy as a treatment for GvHD, requesting more data from the developer. And the stem-cell field as a whole suffered a blow when Geron ($GERN) revealed last year that the biotech was shutting down its stem-cell programs.

Yet Osiris hasn't hit the jackpot. After spending years developing Prochymal, the company is expected to make only modest revenues from the drug for children in Canada with GvHD. Piper Jaffray analyst Edward Tenthoff projected sales of the drug to hit $16.7 million next year, Bloomberg reported. In the meantime, Osiris aims to build on this approval with another regulatory submission in the U.S. this year and has been developing the drug for other uses such as Type 1 diabetes, Crohn's disease and for patients who have suffered heart attacks.

- here's the release
- get more from the NYT article
- check out Bloomberg's report