Osiris' battles will continue despite landmark approval for Prochymal

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A green light for Osiris Therapeutics’ Prochymal in Canada does not herald the beginning of widespread regulatory acceptance of stem cell-based therapies, but the approval is important nonetheless.

Representing the first regulatory nod outside of China for such a product and the first treatment to be specifically approved for graft versus host disease, the event is also a triumph for the Maryland company. Work started on Prochymal twenty years ago and human trials got underway in 1998; the “priority review” process in Canada took almost two years to conclude. Osiris will be hoping to follow this news with positive clinical data due over the course of the year in Crohn’s disease and heart attack, but despite this notable step forward hopes remain low for the read outs.

Modest reaction

News of the Canadian approval – conditional on further studies – prompted a modest 5.5% jump in Osiris shares Friday, to $5.55. With a market cap of $192m the company’s valuation is close to record lows, hobbled by years of lack of clinical progress, in its own labs and within the broader stem cell space, and growing investor scepticism around stem cell technology.

This approval will not be enough to reignite interest in the company to any substantial extent – further regulatory and clinical progress will be required first.

Meanwhile, sales in the very rare graft versus host disease (GvHD) will not support the company from this point. Osiris has not disclosed pricing, having yet to negotiate with Canada’s reimbursement bodies, and few financial analysts have incorporated product sales into their sales models. Consensus from EvaluatePharma is for Prochymal sales of $15m by 2018, although this figure is likely to be highly risk-adjusted and will shift following confirmation of pricing.

The company reckons in Canada there are 100-150 patients that would meet the label – children refractory to steroids – although the adult population that could receive the drug under an expanded access programme is “substantially bigger”.

Further validation

Prochymal is now available in nine countries under expanded access programmes to treat GvHD. Despite the beginnings of a happy ending in this use, it took a long time to happen. Pivotal trials conducted in a broader population failed, but the company found an impact in a subset of severely ill patients – children who had failed on other therapies, typically steroids, and who have weeks to live (Osiris left clinging to a niche after Prochymal failure,
September 9, 2009).

In these cases Prochymal demonstrated a clinically meaningful response in almost two-thirds of cases and improved survival. A confirmatory trial has been requested by Canadian authorities, in which the company expects to recruit up to 150 patients and to take several years, but the drug should become available towards the end of the year.

Approval will now be sought in the US, with a filing planned before the end of the year; the FDA is likely to prove an equally tough if not stiffer test of the product’s approvability.

Meanwhile, further clinical validation of Prochymal is awaited with trials in Crohn’s and heart attack due to report this year; in January the company announced the failure of a phase II in type I diabetes after a one year analysis. A two year analysis will be carried out, but further progress in this use looks unlikely.

Long slog

The 220-patient heart attack study is likely to report first, having completed enrolment over a year ago. It measures Prochymal’s ability to preserve heart function following a severe myocardial infarction.

Phase III Crohn’s disease data should report later in the year, from a programme that recruited more than 300 patients with treatment-resistant or refractory moderate to severe disease. The company decided to pursue Crohn’s after observing the effects of Prochymal on the gastrointestinal symptoms of patients with GvHD.

Again development has not been hitch free – the original phase III was stopped in 2009 amid question around trial design and re-started the following year, following an interim analysis, which saw one dosage discontinued. Hopes are low for the product showing clear cut efficacy in this setting.

Further ambiguous read outs from these trials will mean more protracted pathways forwards for Prochymal. Despite the good news in GvHD, investors are unlikely to have much appetite for supporting that. The company ended March with $44m in cash and analysts anticipate further funds will be needed next year.

For patients afflicted with GvHD and for whom Prochymal has an impact, news of this approval is clearly a huge step forward, particularly if it means the product becomes available in more countries.

For Osiris, however, the long slog continues.

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