Osiris Therapeutics (OSIR) Catalyst Trade Thesis

Osiris Therapeutics (OSIR)

Osiris expects to have data in hand (final data collection date for primary outcome measure) by the end of this year for the Phase III evaluation of Prochymal (remestemcel-L), which is an adult human stem cells treatment for resistant Moderate-to-severe Crohn's Disease.

Also, the company expects data in Q1 of next year for Prochymal using adult mesenchymal stem cell therapy in patients experiencing their first heart attack. The double-blind, placebo-controlled trial has an enrollment of 220 patients from 33 leading clinical centers in the United States and Canada.

Back in July of this year, Osiris announced interim one-year results from its clinical trial evaluating Prochymal for the treatment of patients experiencing first-time acute myocardial infarction:

Cardiac MRI assessments were conducted for six months following infarct to evaluate cardiac remodeling. Patients receiving Prochymal had significantly less cardiac hypertrophy, as measured by cardiac MRI, compared to patients receiving placebo. Patients treated with Prochymal also experienced significantly less stress-induced ventricular arrhythmia. Cardiac hypertrophy and ventricular arrhythmia are indicators of pathological remodeling following heart injury and provide insight into the mechanism by which mesenchymal stem cells attenuate heart injury following a myocardial infarction. The mechanistic data is complemented by clinical data showing treatment with Prochymal resulted in a statistically significant reduction in heart failure. The trial also demonstrated that treatment with Prochymal was safe. There were no infusional toxicities observed in patients receiving Prochymal. Serious adverse events occurred with equal frequency in both treatment groups at 31.8%. To date, there have been 5 deaths in the trial, 2 in the Prochymal group and 3 in the placebo group.

At the time of the above announcement, the stock surged, hitting as high as $12.08 on Jul 10, 2012.

My catalyst trade basis for OSIR is based on prior announcements of positive data having a massive effect on the stock price. Stem cell technology might be the wave of the future in the biotech sector. Because of this possibility, companies like OSIR have seen large moves upwards in their stock prices.

The MACD is trending upwards, and the chart indicates a short and mid term wedge formation. This is a bull signal for me as the chart indicates a potential move towards $10.75 - $11 -- in my opinion.