COLUMBIA, Md. (TheStreet) -- The failure of Osiris Therapeutics' (OSIR) stem cell drug Prochymal in two late-stage clinical trials Tuesday was an easy pickup for anyone digging into the shoddy work and shortcuts taken by the company in its previous clinical trials.
Osiris used easy-to-achieve endpoints, liberal definitions of response and enrolled relatively healthy patients in phase II studies of Prochymal in graft-vs.-host disease (GVHD).
It's no surprise, then, to see the phase III studies of Prochymal come up short, especially since these larger studies were designed with stricter, more difficult-to-achieve efficacy endpoints. This is why Osiris was a short at $17 in my old biotech investment newsletter, full disclosure.
In the phase III study of patients with steroid-refractory GVHD, the Prochymal response rate was 35% compared to a 30% response rate for placebo -- a result that wasn't close to being statistically significant, with a p value of 0.30. (A p value of 0.05 or less would have been required for the study to be a success.)The phase III study in newly treated GVHD patients was even uglier, with Prochymal patients doing worse than placebo patients (a 45% response rate for Prochymal vs. 46% response rate for placebo with a p value of 0.80.) There was also no difference in survival between Prochymal patients and those treated with placebo in either study. Osiris shares were off 34% to $8.05 in Tuesday trading, but that still overvalues the company. Prochymal has now failed or otherwise produced negative/equivocal data in studies involving GVHD, knee cartilage damage, Crohn's disease and heart attack.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV