Sanofi surprises Osiris by pulling out of Prochymal deal

Maryland, USA-based Osiris Therapeutics (Nasdaq: OSIR) has provided an update on the status of the development and commercialization agreement with Genzyme, a subsidiary of French drug major Sanofi (Euronext: SAN), after the latter on February 8 issued a press release, which included an update on its R&D pipeline, stating that it has "discontinued" its project with Prochymal for graft versus host disease (GvHD).

Osiris signed a deal with then independent Genzyme to develop two late-stage stem cell agents - Prochymal and Chondrogen - that provided it an upfront of $130 million and the potential to earn as much as $1.38 billion in total from the accord (The Pharma Letter November 10, 2008). Genzyme gained right to the two products for all markets excluding the USA, Canada and Japan.

The statement issued by Sanofi along with its 2011 financial result - simply noting that “one project in Phase III (prochymal, a mesenchymal stem cell evaluated for graft-versus-host disease) has been discontinued” - was made without consultation with or knowledge of Osiris, the US company said, noting that it has not received any notification from Sanofi regarding the discontinuation of the agreement in place between the two companies.