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Osiris Clinical Trial Results Challenge FDA Protocol

ABC News, The New York Times, U.S. News & World Report, September 8, 2009

A number of media sources, including The New York Times, recently reported that Prochymal, the leading adult stem cell product manufactured by Osiris Therapeutics, has "failed" two late-stage clinical trials. The term "failed", however, is the direct result of a technicality in FDA definitions and requirements: namely, the FDA does not recognize subsets of patients who participate in clinical trials. In actuality, however, Prochymal yielded statistically significant, highly impressive data in the specific subset of patients to whom this novel therapy was targeted.

Currently under question are two clinical trials in which Prochymal was tested as a therapy for graft-versus-host disease (GvHD), and also for steroid-refractory GvHD. In the clinical trial for steroid-refractory GvHD, the patients who took Prochymal in combination with steroids were found to have a 45% overall response rate, which was less than the 46% response rate for those patients who took steroids in combination with a placebo.

In the other clinical trial, for regular, non-steroid-refractory GvHD, it was found that 35% of all patients who received Prochymal exhibited an improvement in the disease, which, when compared to the 30% of patients who improved in response to a placebo, is not statistically significant.

When one looks at specific subsets of patients within the clinical trials, however, the data are quite different. Specifically, for patients with a form of GvHD that targets the liver and gastrointestinal tract, there was, in fact, a statistically significant response rate in which dramatic improvements were observed. However, at this time the U.S. FDA (Food and Drug Administration) does not typically approve therapies that are found to benefit only specific subsets of patients. The Osiris clinical trial results therefore call into question the FDA rules, which many scientists and physicians believe should be updated and revised in this regard.

GvHD is a potentially fatal disease in which immune cells from transplanted bone marrow recognize the recipient's body as foreign and attack it. Of all the various types and cases of GvHD, it is the liver, the gastrointestinal tract, and the skin which are most commonly affected. Not to recognize a subset of patients who show significant improvement specifically in the liver and the gastrointestinal tract, in direct response to Prochymal, is to ignore a therapy that could have the greatest benefit for the greatest number of people. It is just one more example, of many, of how the FDA's outdated rules and regulations have no scientific applicability whatsoever to the new field of regenerative medicine. It is just one more instance that proves the urgent importance of revision and updating of FDA laws.

Until such a revision actually happens, however, FDA regulators - and therefore most members of the media - are calling the Prochymal trials a "failure". The critically important subset of patients who showed statistically significant improvement in their livers and gastrointestinal tracts, as a result of receiving Prochymal, might beg to differ, however.

In fact, 74% of patients in this particular subset achieved complete remission of the disease - an astonishing improvement. If complete remission in nearly three-fourths of all patients in a particular subset cannot be considered "statisticallly significant", nothing can. The fact that this particular "subset" of patients represents the largest group of patients with this particular disease, is also worthy of serious consideration. Still, however, as a matter of general policy, the FDA refuses to recognize patient subsets - and therefore complete remission of the disease in 74% of patients in this particular group is considered a "failure".

Additionally, in the trial for steroid-refractory GvHD, Prochymal was found to increase the survival rate in children from the usual 20% to 60%. The FDA won't recognize that data either, and therefore this particular trial is also considered to be a "failure". Parents with children who suffer with this condition, and who could therefore benefit from Prochymal, should not be allowed to have Prochymal, according to the FDA.

Derived from allogeneic (in which the donor and recipient are not the same person) adult stem cells known as mesenchymal stem cells (MSCs) that are harvested from the bone marrow of healthy young adults and cultured in the laboratory, Prochymal is the flagship product of Osiris Therapeutics, the world's leading adult stem cell company. With its powerful immunomodulatory properties, Prochymal has already been found in numerous other studies to reduce inflammation and regenerate damaged tissue, in addition to ameliorating the immune response.

According to Duane Nash, an analyst at Wedbush Morgan Securities, "Prochymal really is the company's main platform, and if Prochymal doesn't work here then people will worry that it will not work elsewhere." Whether or not Prochymal is judged to be a success or a failure, however, seems to depend more upon outdated FDA technicalities than upon actual patient improvement.

Currently Prochymal is also being evaluated in 5 other indications, which include Type I diabetes and acute myocardial infarction, among other maladies. In fact, this is not the first time that Prochymal has "failed" a study. In June of this year the product was expected to improve lung function in patients with COPD (chronic obstructive pulmonary disease), but again the greatest response was found only in a specific subset of patients. Additionally, in March of this year Prochymal was evaluated in a clinical trial of Crohn's disease but the FDA halted the trial due to design flaws in the study. The trial has since been redesigned and is expected to resume later this year.

It has been estimated that approximately 4,000 people in the U.S. alone are diagnosed with GvHD each year. The market potential has been projected to be between $150 million and $250 million.

As an ABC News reporter commented, "The unmet medical need might also persuade the U.S. Food and Drug Administration to abandon its normal protocol and approve the drug based on an analysis of a subset of patients, even if it fails the main goal of its trial to show the required level of complete response and survival."

As JMP Securities analyst Charles Duncan further adds, "It is possible that if you have efficacy in a subset of patients that is meaningful, then the trial may be deemed a success. You may actually see the U.S. Food and Drug Administration approve it on the basis of a subset analysis," particularly in the case of the steroid-refractory GvHD patient population. According to Edward Tenthoff, analyst at Piper Jaffray, "We are more confident in the steroid refractory study because we really believe that these patients do not respond to steroids."

As the ABC News reporter additionally points out, "If approved in other indications, the drug could become a blockbuster, generating sales of more than a billion dollars." Mr. Nash agrees, adding, "The thought is that the other indications that Prochymal could work in could potentially bring in over a billion dollars a year."

As of June 30th of this year, Osiris reported $52 million in cash and investments, which is enough to fund operations through the initial commercialization of Prochymal.

Prochymal is the only stem cell product currently on the market which has been granted both Fast Track and Orphan status by both the U.S. FDA and the European Medicines Agency. The mesenchymal stem cells (MSCs) contained in Prochymal are obtained from the bone marrow of healthy adult donors and are specially formulated according to a proprietary process for intravenous infusion. Osiris is also developing another adult stem cell product, Chondrogen, which is currently in clinical trials for the treatment of osteoarthritis of the knee.

A leader in adult stem cell therapies, Osiris Therapeutics is focused on the development of products for the treatment of inflammatory, orthopedic and cardiovascular diseases. Osiris was founded in 1992, went public in 2006 and currently has 47 U.S. patents, each with one or more foreign counterparts. In November of last year, Osiris formed a strategic alliance with the biotech company Genzyme that was valued at over $1.3 billion. In 2007, the two companies were awarded a $224.7 million contract from the U.S. Department of Defense for the development of Prochymal in the treatment of radiation sickness.

Perhaps this recent discrepancy between dramatic patient improvement in Prochymal's clinical trials and the FDA's definitions of "success" or "failure" will inspire a re-evaluation at the FDA of its rules on patient subsets. In fact, perhaps this would be an excellent opportunity for the FDA to further re-evaluate the modern relevance and scientific justifiability - or, more correctly, the lack thereof - of its rules and regulations in general.

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