Osiris (OSIR): Follow-Up comments from News that Sanofi has walked Away from Osiris

Osiris Therapeutics (NASDAQ: OSIR): It has now been learned that corporate partner Genzyme/Sanofi not only discontinued Prochymal's development but didn’t even formally notified Osiris. They found out the same way we did ! OSIR is saying that these "public statements" effectively terminate the agreement" giving all rights for Prochymal back to Osiris. So Osiris gets 100% of Prochymal back but does anybody want it now?

The next event for investors to watch will be Prochymal’s Canadian filing for GvHD in 1H12 (expected to be negative) and as such this could trigger further decline in the shares. Recall that Prochymal failed to reach its primary endpoints in two Phase 3 trials.

Daily Dose Conclusion: Sanofi decision is not totally unexpected but is disappointing as the hope has been that a "big-pharma" would support prochymal. While negative for the space over-all (cell therapy) we see this as both an issue specific to Osiris and to Prochymal and to the disease, GvHD which has been riddled with failures. Osiris lacks few drivers to the upside, with risk to the downside.