Transaction provides infusion of cash as Osiris prepares for launch of Prochymal.
Osiris Therapeutics entered into a definitive agreement to sell its Osteocel business for up to $85 million in upfront and milestone payments to NuVasive. In a separate agreement worth up to an additional $52 million in revenue to Osiris, the company will process and supply NuVasive with Osteocel for up to 18 months.
Osteocel is a viable bone matrix product that preserves the native stem cell population that resides in marrow-rich bone and is intended for use in orthopedic indications for bone regeneration, according to the companies.
“With the continued positive developments in Prochymal™ and Chondrogen™, it is now time for Osiris to focus its efforts on the successful launch of our core products,” says C. Randal Mills, Ph.D., president and CEO of Osiris Therapeutics. “This transaction provides Osiris with a substantial amount of nondilutive capital over the near-term and shapes the organization in a way that is optimal for both the Osteocel employees and the long-term mission of Osiris.”
According to Alex Lukianov, chairman and CEO of NuVasive, “this proven stem cell technology directly supports our strategy of expanding our offering of innovative and proprietary products. Osteocel provides our exclusive sales force with a unique stem cell-based bone graft that is complementary to our Formagraft product and will add meaningful revenue in the short term. This transaction also includes an opportunity for our companies to collaborate together on the next-generation, culture-expanded version of Osteocel.”
As part of the transaction, Osiris retains the rights to culture expanded versions of the product, previously referred to as Osteocel-XC. However, included in the agreement is an option for NuVasive to acquire the rights to the expanded version of the product at predefined terms as well as a right of first negotiation if Osiris elects to partner the product with a third-party.