The company's most advanced pipeline product (and the real driver of the stock's value) is Prochymal, an intravenous infusion containing cultivated MSCs. A phase III trial is currently under way testing Prochymal in patients with graft-versus-host disease who are not responding to steroids. Graft-versus-host disease, or GVHD, is a potentially life-threatening immune reaction that can occur in patients who have had bone-marrow transplants. In GVHD, immune cells from the donated bone marrow attack the recipient's organs and tissue. There are no approved drugs to treat GVHD, although steroids and other immunosuppressants are often used. In an interview, Osiris CEO Randal Mills says clinical data suggest that Prochymal might be the first "intelligent" treatment for inflammatory diseases, including GVHD. When injected into a patient, the MSCs in Prochymal migrate to, and target, the specific source of inflammation. In the case of GVHD, for instance, that's often the gastrointestinal tract. Once there, the stem cells engraft and tamp down chemical signals causing inflammation. They also boost the production of anti-inflammatory chemical signals. When the inflammation dissipates, the stem cells go dormant, explains Mills. "With steroids, the entire body becomes immune-suppressed, which leaves patients susceptible to infections," says Mills. Prochymal would allow doctors to target problems with much more specificity and without serious side effects, he adds. Rik Derynk, an expert in mesenchymal stem cells at the University of California San Francisco, says he's not familiar with Prochymal specifically, but he's cautious about claims that MSCs might be used to treat inflammatory diseases.