Exhibit 99.1

 

 

Osiris Therapeutics Reports Third Quarter 2010 Financial Results

 

COLUMBIA, Md. —November 5, 2010 - Osiris Therapeutics, Inc. (NASDAQ: OSIR), the leading stem cell company focused on developing and marketing products to treat medical conditions in the inflammatory, autoimmune, cardiovascular and orthopedic areas, announced today its results for the third quarter of fiscal 2010.

 

Highlights and Recent Developments

 

·      Prochymal New Drug Submission (NDS) under Priority Review for full marketing approval by the Biologics and Genetic Therapies Directorate of Health Canada for graft vs. host disease (GvHD).

 

·      Request for Pre-BLA (Biologics License Application) meeting submitted to the U.S. Food and Drug Administration to prepare for the upcoming Prochymal BLA submission for GvHD.

 

·      Received Orphan Drug designation from Swissmedic, the Swiss Agency for Therapeutic Products, for Prochymal as a treatment for GvHD, making the drug eligible for expedited review.

 

·      Recorded net income of $4.5 million for the quarter; $0.14 per diluted common share.

 

·      Reported cash, short-term investments and receivables of $76.5 million as of September 30, 2010.

 

“In conjunction with our partners at Genzyme, we are making progress towards our goal of winning approval of the world’s first stem cell therapy,” said C. Randal Mills, Ph.D., President and Chief Executive Officer of Osiris Therapeutics.  “We are pleased with the steady progress made through the quarter and look forward to working with regulatory agencies around the globe to make Prochymal available to patients in need.”

 

Third Quarter Financial Results

 

Net income for the third quarter of 2010 was $4.5 million compared to a loss from continuing operations of $6.8 million in the third quarter of 2009. Revenues were $10.8 million in the third quarter of 2010, consisting primarily of the amortization of license fees from our collaboration agreements. Revenues in the third quarter of 2009 were $10.6 million.  As of September 30, 2010, Osiris had $76.5 million of cash, receivables and short-term investments.

 

Research and development expenses for the third quarter of 2010 were $5.5 million, compared to $16.2 million incurred in the third quarter of 2009.  The $10.7 million decrease in R&D expenses reflects the completion of clinical work associated with our Phase 3 clinical trials.  General and administrative expenses were $1.3 million for the third quarter of 2010 compared to $1.5 million for the same period of the prior year.  Net cash used in continuing operations for the three months ended September 30, 2010 was $8.0 million.

 

Webcast and Conference Call

 

A webcast and conference call to discuss the financial results is scheduled for today, November 5, 2010 at 9:00 a.m. 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 (877) 303-6133 (U.S. participants) or (970) 315-0493 (international participants).

 

A replay of the conference call will be available approximately two hours after the completion of the call through November 11, 2010. Callers can access the replay by dialing (800) 642-1687 (U.S. participants) or (706) 645-9291 (international participants). The audio replay confirmation code is 21023779. 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 Osiris Therapeutics

 

Osiris Therapeutics, Inc. is the leading stem cell company focused on developing products to treat serious medical conditions in the inflammatory, autoimmune, 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 and Prochymal are registered trademarks of Osiris Therapeutics, Inc. More information can be found on the company’s website, www.Osiris.com. (OSIR-G)

 

Osiris and Genzyme formed 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.  Genzyme holds these rights in all other countries except Japan, where JCR Pharmaceuticals holds rights to Prochymal for the treatment of patients with hematological malignancies.

 

Forward-Looking Statements

 

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

 

7015 Albert Einstein Drive  ·  Columbia, Maryland  21046  · Ph 443.545.1800  ·  Fax 443.545.1701  ·  www.Osiris.com

 

 

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.

 

For additional information, please contact:

 

Erica Elchin

Osiris Therapeutics, Inc.

(443) 545-1834

OsirisPR@Osiris.com

 

Media Contacts:

Andrew Law/Rachel Gross

Schwartz Communications

(781) 684-0770

Osiris@schwartz-pr.com

 

 

OSIRIS THERAPEUTICS, INC.

Condensed Balance Sheets

Amounts in thousands

 

		September 30, 2010			December 31, 2009
		(unaudited)
Assets
Current assets:
Cash		$	1,088		$	1,306
Investments available for sale		75,168			99,409
Accounts receivable		262			1,138
Inventory		321			—
Prepaid expenses and other current assets		789			948
Total current assets		77,628			102,801
Property and equipment, net		3,266			3,734
Restricted cash		521			666
Other assets		3,142			395
Total assets		$	84,557		$	107,596
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses		$	7,057		$	9,013
Deferred revenue, current portion		40,840			41,011
Capital lease obligations, current portion		—			3
Current liabilities of discontinued operations		—			412
Total current liabilities		47,897			50,439
Deferred revenue, net of current portion		13,543			44,173
Other long-term liabilities		470			424
Total liabilities		61,910			95,036
Stockholders’ equity
Common stock, $.001 par value, 90,000 shares authorized, 32,790 shares outstanding - 2010, 32,773 outstanding - 2009		33			33
Additional paid-in-capital		274,242			272,959
Accumulated other comprehensive income (loss)		5			(88		)
Accumulated deficit		(251,633		)	(260,344		)
Total stockholders’ equity		22,647			12,560
Total liabilities and stockholders’ equity		$	84,557		$	107,596

 

 

OSIRIS THERAPEUTICS, INC.

Condensed Statements of Operations

(Unaudited)
Amounts in thousands, except per share data

 

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2010			2009			2010			2009
Product sales		$	99		$	—		$	99		$	—
Cost of goods sold		34						34			—
Gross profit		65			—			65			—
Revenue from collaborative research agreements, government contract and royalties		10,659			10,584			32,340			33,779
Operating expenses:
Research and development		5,460			16,247			18,476			53,354
General and administrative		1,268			1,511			4,677			6,745
		6,728			17,758			23,153			60,099
Income (loss) from operations		3,996			(7,174		)	9,252			(26,320		)
Other income, net		27			134			151			387
Income (loss) from continuing operations, before income taxes		4,023			(7,040		)	9,403			(25,933		)
Income tax benefit (expense)		525			238			(692		)	2,636
Income (loss) from continuing operations		4,548			(6,802		)	8,711			(23,297		)
Discontinued operations:
Income (loss) from operations of discontinued operations, net of income taxes		—			(28		)	—			1,069
Gain from sale of discontinued operations, net of income taxes		—			636			—			21,112
Income from discontinued operations		—			608			—			22,181
Net income (loss)		$	4,548		$	(6,194	)	$	8,711		$	(1,116	)
Basic income (loss) per share
Income (loss) from continuing operations		$	0.14		$	(0.21	)	$	0.27		$	(0.71	)
Income from discontinued operations		—			0.02			—			0.68
Basic earnings (loss) per share		$	0.14		$	(0.19	)	$	0.27		$	(0.03	)
Diluted income (loss) per share
Income (loss) from continuing operations		$	0.14		$	(0.21	)	$	0.26		$	(0.71	)
Income from discontinued operations		—			0.02			—			0.68
Diluted earnings (loss) per share		$	0.14		$	(0.19	)	$	0.26		$	(0.03	)
Weighted Average Common Shares (basic)		32,789			32,764			32,781			32,731
Weighted Average Common Shares (diluted)		33,100			32,764			33,095			32,731

 

 

OSIRIS THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(Unaudited)
Amounts in thousands

 

		Nine Months Ended
		September 30,
		2010			2009
Cash flows from operating activities:
Continuing operations
Income (loss) from continuing operations		$	8,711		$	(23,297	)
Adjustments to reconcile income (loss) from continuing operations to net cash (used in) provided by operations:
Depreciation and amortization		566			483
Non cash share-based payments		1,281			1,852
Changes in operating assets and liabilities:
Accounts receivable		876			56,101
Prepaid expenses and other current assets		(162		)	(710		)
Other assets		(2,747		)	162
Accounts payable and accrued expenses		(1,938		)	4,670
Deferred revenue		(30,801		)	(29,928		)
Net cash (used in) provided by continuing operations		(24,214		)	9,333
Discontinued operations
Income from discontinued operations		—			22,181
Adjustments to reconcile income from discontinued operations to net cash used in discontinued operations:
Non cash impact of the sale of discontinued operations		—			(26,595		)
Depreciation and amortization		—			210
Provision for bad debts		—			45
Non cash share-based payments		—			98
Changes in operating assets and liabilities:
Accounts receivable		—			1,516
Inventory and other current assets		—			1,707
Accounts payable and accrued expenses		(412		)	(3,108		)
Net cash used in discontinued operations		(412		)	(3,946		)
Net cash used in operating activities		(24,626		)	5,387
Cash flows from investing activities:
Purchases of property and equipment		(98		)	(181		)
Proceeds from the sale of property and equipment		—			17
Proceeds from sale of discontinued operations, net		—			9,797
Proceeds from sale of investments available for sale		24,598			35,578
Purchases of investments available for sale		(236		)	(50,000		)
Net cash provided by (used in) investing activities		24,264			(4,789		)
Cash flows from financing activities:
Principal payments on capital lease obligations and notes payable		(3		)	(5		)
Restricted cash		145			(536		)
Proceeds from the exercise of stock options		2			575
Net cash provided by financing activities		144			34
Net (decrease) increase in cash		(218		)	632
Cash at beginning of period		1,306			940
Cash at end of period		$	1,088		$	1,572