Osiris To Report Q2 Results

| About: Osiris Therapeutics, (OSIR)
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Osiris (NASDAQ:OSIR), a biotech that specializes in stem cells, will be reporting is Q2 2013 financial results on Monday, August 5th at 9:00 AM Eastern. On June 17th I featured Osiris in an article titled, "Can Stem Cells Lead To Profits". At that time the equity was trading at $10.28. Since then we have seen the stock appreciate to an intraday 52 week high of $12.55 and a most recent close of $12.07. That represents nearly a 20% gain in 1 month.

Analysts are estimating that the company will report a loss of 9 cents. Should that happen it would represent a sharp improvement from the 13 cent loss reported last year.

A big positive that is anticipated in this call comes from the revenue line. A year ago the company had a modest $1.7 million. The street is looking for revenue of $4.35 million in this year's Q2. That is an increase of over 150%.

Osiris currently has four commercial products on the market. This gives the company flexibility, diversity, and perhaps most importantly potential success down several paths. First is Prochymal, an intravenous stem cell therapy for the treatment of graft-versus-host disease. Second is Grafix, which is used for acute and chronic wounds. Third is Ovation, used for tissue repair, and fourth is Cartiform, for acute cartilage injury.

Osiris has exclusive rights to Prochymal. Prochymal is in the beginning stages of its journey. The drug is approved in a few territories and the company is seeking approval in more. This will lead to stronger sales. Prochymal is the world's first approved and approvable stem cell drug. It is also the most widely used stem cell drug in the world. This makes Osiris a market leader and essentially the commercial creator of the category. Advantages such as this can not be understated. If this conference call offers any surprise on additional approvals for Prochymal or development of potential partnerships on the drug the news could be a stock driver. Adding potential value to Prochymal are ongoing studies for use with Chron's cardiac issues.

Ovation is gaining traction in the $1.9 billion per year grafting products market used in spinal fusions. With what some believe is a superior safety profile, Ovation is beginning to chip away into that market. Ovation, and its predecessor Osteocel are now on a path of getting above 10% of that market. This outlines another potential growth story.

The Grafix product is seeing traction. Grafix is used in skin graft applications. The company has initiated a proprietary sales force and continued trials are ongoing. The success that Grafix is seeing in the market is great. Essentially the product has a high rate of closure (72%) in a short amount of time (5.5 weeks). Traditional treatments see a longer period of time to get closure and post a less successful closure rate. This puts Grafix at the high end of the scale and bodes well for future sales.

Cartiform is in early stages of commercialization and at this point not a huge driver of revenue. However, there is promise here as well. This product, along with the others listed above are made in-house by Osiris. This gives the company quality control as well as inventory control. These are critical components of a growing business.

What I am seeing with Osiris is a company that is on a pathway to profitability. The light at the end of the tunnel is not a dim flicker anymore, but rather a goal that is quite attainable. Profits will not come this quarter, but the performance will point to every indication that this company is headed in the right direction. Osiris has some compelling and unique products in its line-up and remains at the cutting edge of a technology (stem cells) that is gaining more attention with each passing month.

Investing in Osiris is not without risk. The very subject of stem cells can send shivers down the spine of many. Osiris obtains stem cells from healthy adult donors as opposed to the more controversial methods that make the subject a political hot potato. Thus, while the sourcing of stem cells is much less polarizing, the subject of stem cells is sensitive. Osiris has done a decent job of getting out their message, but that task will continue to be an uphill battle for a while.

In this quarterly report I am anticipating a continued improvement on a pace that leads to profits. I do not see any negative surprises in the mix and I expect the call to carry an upbeat and inspiring message. Stay tuned.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.