Genzyme and Osiris Get Together on Stem Cells

In a bit of an election-day irony, a pretty significant stem cell deal is grabbing headlines in the biopharma sector. While it definitely took a back seat to the economy this election cycle, stem cell research has long been a hot-button political issue. John McCain supports adult stem cell research. Barack Obama believes in embryonic stem cell research.

The big biotechnology company, Genzyme (GENZ), which makes very expensive drugs for rare diseases and conditions, is going to pay Osiris Therapeutics (OSIR) as much as $1.4 billion over time if all goes well. According to Wikipedia, Osiris was an Egyptian lord of the dead and his green skin, in certain renderings, represents re-birth. I'm assuming that was part of the thinking at OSIR, which specializes in stem cells.

According to Osiris's PR guy, the company "is the furthest along in drug development for any stem cell company...." In an email, he offered up access to OSIR's CEO for an interview yesterday. Even though the deal is sizable and involves one of the biggest biotechs in the world, the CEO of a $600 million company just isn't going to break through on election day. This blog is the best they can hope for.

There are a handful of other baby biotechs, mostly microcaps, that play in the stem cell space. Geron (GERN), Stemcells Inc. (STEM), and Aastrom Biosciences (ASTM), just to name a few. Depending on who wins today, and maybe spurred by the GENZ-OSIR deal, perhaps their values will begin to grow.