Biotech company Osiris ties up with Genzyme in $1.4-billion deal

The emerging field of stem cell treatments got a major fillip with Columbia-based biotech researcher Osiris and Massachusetts-based Genzyme having paired to develop and sell Prochymal and Chondrogen, two late-stage adult stem cell treatments for several disorders, in a deal estimated to be worth $1.4 billion. .

Osiris developed the treatments but will get financial support from Genzyme for further advancement and commercialisation of the products. Under the deal, Osiris will sell the products in the US and Canada. Genzyme will sell the treatments in other countries and pay Osiris $130 million initially. Osiris also could earn up to $1.25 billion if certain goals are met, such as sales targets and regulatory approvals.

The agreement would be the biggest ever in the field of adult stem cell therapy, which takes cells from mature tissues, instead of from embryos. Genzyme, the world's largest maker of drugs for rare genetic disorders, is betting on the technology to expand its offerings of cell transplant therapies.

"This relationship greatly enhances our ability to effectively introduce this groundbreaking technology on a global basis," C Randal Mills, Osiris' president and chief executive officer, said in a statement.

Prochymal is in late-stage clinical trials as a treatment for a type of Crohn's disease, which is characterized by chronic intestinal inflammation. New trials for Chondrogen as a treatment for arthritis of the knee are expected to begin soon, the company said.

Osiris expects to apply for US Food and Drug Administration approval by January 2009 to market Prochymal for acute graft-versus-host disease, Mills said. The life- threatening disorder strikes patients when immune cells from transplanted tissue, such as bone marrow, attack their organs. The company expects to begin selling the product by the end of 2009 or early 2010 once it's approved.

Genzyme and Osiris have worked together for the last 18 months on a US Department of Defense contract for Prochymal in radiation sickness, Mills said. Once the drug is approved by the FDA the Pentagon will buy 20,000 doses at $10,000 each, he said.