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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Osiris Therapeutics (NASDAQ: OSIR ) , a company focused on using stem cells to treat a number of diseases and disorders, fell as much as 20% after it and the Food and Drug Administration announced an agreement on a regulatory pathway for two of Osiris' biosurgery products, Grafix and Ovation.
So what: According to Osiris' press release, Grafix -- which is a bandage covering that uses stem cells to help heal and close diabetic foot ulcers -- will remain on the market as a treatment for diabetic foot ulcers, but it'll need to file a biologics license application for any expanded indications. Osiris plans to use data from previous trials in order to facilitate an eventual approval. Osiris also announced that it'd be transitioning its Ovation product line to its newly launched OvationOS formulation and would complete the transition by no later than the second half of next year.
Now what: We have both good and bad news here. The bad news is that Osiris is going to need to go through the motions of getting Grafix's expanded indications approved through the FDA. That means no rapid ramp up in revenue and potentially higher costs in the interim. On the flip side, Osiris should be able to use its study data for its BLA, which could ultimately expedite any review of Grafix by the FDA. It's tough to deny how impressive the results were in Osiris' Protocol 302 trial where Grafix demonstrated a 192% closure improvement over the current standard of treatment in closing chronic diabetic foot ulcers. With that in mind, I'd certainly suggest adding Osiris to your watchlist.
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