COLUMBIA, Md. ( TheStreet) -- Osiris Therapeutics ( OSIR) is taking a very circuitous route towards seeking U.S. approval for its stem-cell therapy to treat graft-versus-host disease (GVHD).

Osiris CEO Randy Mills told investors last Friday that the company requested a meeting with the U.S. Food and Drug Administration to get a better sense of what regulators might want to see in a potential Prochymal approval data package. Mills said this meeting might take place early next year.

"What we're hoping to do out of this meeting is to gain consensus from FDA on specifically the regulatory pathway forward for Prochymal for approval for graft versus host disease, and talk more about the indication and specifically what data they want in the complete package," said Mills on the Osiris third-quarter conference call.

Mills added, "As we've said a number of times, what we don't want to do is jam something down the FDA's throat that the FDA doesn't want."

Amen to that! The only thing I'd add to Mills' comments is that FDA probably has little appetite for data culled from two failed Prochymal studies, which are the only data Osiris has to offer.

Osiris might believe presenting these negative Prochymal results on a silver platter will make them more palatable; my guess is FDA still gags and sends the company back to the kitchen.

If Osiris persists and decides to seek Prochymal's approval based on data from two failed studies, FDA won't bar the door but the agency won't approve the drug either.

Mills knows this, which is why Osiris is dragging out the Prochymal regulatory process. Data from the two failed Prochymal studies were announced in September 2009 -- 14 months ago. The negative results should have spelled the end of Prochymal, but that would have forced Osiris to shutter because the company has little else in its pipeline. It's a miracle that Genzyme ( GENZ), Osiris' Prochymal partner, hasn't walked away, particularly since its actions are being heavily scrutinized in the midst of a takeover attempt by Sanofi-Aventis ( SNY).

Drug companies are loathe to shut down when they still have investors' money they can burn, so Osiris has spent the last year on a fruitless exercise to re-work data from the failed studies to find a subset of patients for which Prochymal might be effective.

This intense data-mining project -- a non-starter for FDA approval purposes -- allows Mills to make head-scratching statements about Prochymal:

"It's a drug that provides clear and statistically significant benefit in patient populations who have no alternative and to face death," Mills said last Friday. "And when you layer that on to the top of the fact that the drug has an outstanding safety profile, where Prochymal falls in regards to graft versus host disease, it's a clear risk/benefit argument."

This is Mills' conclusion from two studies in which Prochymal failed? Osiris is also seeking Prochymal's approval in Canada, I suppose the company hopes regulators up north aren't as diligent as they are down here.

--Written by Adam Feuerstein in Boston.

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