Update: Osiris Therapeutics Earnings

| About: Osiris Therapeutics, (OSIR)


Osiris reported second quarter product revenues of $13.3 million, compared to $5.3 million during the prior year period, an increase of 151%.

Gross profit was $10.4 million compared to $3.8 million during the same period of 2013.

In my original analysis I mentioned that Osiris' Biosurgery segment including Grafix remained well-positioned.

Osiris said that it added several new sizes to the Grafix product line, allowing healthcare providers to optimally match Grafix to the wound size, which confirms my view.

Osiris Therapeutics (NASDAQ:OSIR) recently reported its second quarter financial results. Product revenues during the second quarter of 2014 remained at $13.3 million, compared to $5.3 million in the prior year period, an increase of 151%. Product revenues registered a 32% growth over the previous quarter. Gross margin grew to 78% from 72% year-over-year and gross profit came in at $10.4 million, compared to $3.8 million in the year-ago period. However, the company reported a net loss of $1.4 million from continuing operations, after recognizing the net $1.3 million non-cash loss in market value of stock received from the Mesoblast transaction and income taxes of $130,000. The balance sheet of Osiris consisted of $80.9 million of cash, investments and trade receivables, as of June 30, 2014.

The company's Grafix is well-positioned to remain a cost effective option within the Centers for Medicare & Medicaid Services bundled payment system. In order to differentiate Grafix in the marketplace and to support future BLAs, Osiris said that it has initiated clinical studies in diabetic foot ulcers, venous leg ulcers, and complex and exposed wounds. The company will conduct well-designed and well-powered Phase III clinical studies in order to demonstrate the clinical effectiveness of Grafix in a broad range of wound types.

In my original analysis I mentioned that sale of the ceMSC business will allow Osiris to focus on its Biosurgery segment, including Grafix, which has been gaining traction over the past few quarters. Osiris has tremendous opportunities in wound repairing using stem cells. The company's commentary after the second quarter earnings about its Grafix progress is really encouraging for investors. The company's stock reacted positively just after the second quarter earnings release. I'd recommend buying the stock around the current price.

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