"I'm concerned because when you inject MSCs into a patient, the cells go everywhere and we don't know what will happen. Most likely nothing, but we don't know," says Derynk, who serves as co-director of the UCSF Institution for Regeneration Medicine.

"I am comfortable with the use of MSCs to regenerate into new mesenchymal tissue, but when it comes to treating inflammatory diseases, I'm not comfortable because I don't think all the science is there yet," he added.

Last December, results from a phase II study of Prochymal used in combination with steroids in GVHD patients showed that 29 of 31 patients, or 94%, responded to Prochymal treatment, while 23 patients, or 74%, achieved a complete response, meaning they experienced a total clinical resolution of their GVHD. Osiris said the response shown by Prochymal was double what is typically seen when patients are treated with steroids alone.

But a closer look at this study reveals some flaws and suggests that Osiris might be overselling Prochymal's efficacy.

The patients in Osiris' GVHD study appear to be a relatively easy to treat. For instance, 100% of the GVHD patients enrolled received their bone-marrow transplants from matched donors, which makes them more likely to respond to treatment compared to patients who receive bone marrow from unmatched donors, according to published research.

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