On Tuesday, shares for biotech company Osiris Therapeutics (OSIR) vaulted over 125 percent within the first few hours of trading, closing the day on an advance of almost 140 percent to $25.44.
Osiris develops stem-cell based treatments for a variety of ills. Early Tuesday, the company released results from a clinical trial of Grafix, a treatment for foot ulcers commonly found in patients who suffer from diabetes.
The results were very encouraging. The primary goal of the study was easily met; while conventional treatments for diabetes-related foot ulcers successfully closed wounds at a rate of 21 percent after 12 weeks, Grafix had a 62-percent closure rate in the same amount of time. In terms of secondary goals, 80 percent of patients with wounds that did not respond to conventional treatment saw their wounds close after being administered Grafix.
The trial results could be a game-changer for Osiris. The company has a number of drugs that are in trial-phase, but Prochymal, a treatment for acute graft-versus-host disease as well as Crohn’s disease, and Chondrogen, an arthritis treatment, can expect competition from much bigger companies such as Johnson & Johnson (JNJ) and Novartis (NVS) , who currently produce the leading drugs for those medical conditions.
Grafix has potential both because it does not face the same competition, and because of the $2 billion spent annually, in the US alone, on treating diabetic foot ulcers. With Grafix practically a shoo-in for regulatory approval, Osiris could dominate a huge market. Of the 25 million-or-so Americans who suffer from diabetes, about one-quarter of them develop foot ulcers.
Osiris pared back its enormous gains on Wednesday, dropping just over 11 percent to $22.50 ahead of the close. But another biotech company also had a banner day over successful results from diabetes treatment studies.
MannKind Corp. (MNKD) has spent the last six years trying to gain approval for a non-intravenous method of administering insulin to diabetes patients. Alfrezza is the company’s inhalant version of insulin, and on Wednesday, Mannkind announced that trial results have proven, when taken in conjunction with other orally administered medications, that the drug is more effective at controlling the blood-sugar level of patients than the standard intravenous version.
The reported test results were from the final phase of testing, making Alfrezza a likely candidate for FDA approval, as well as the only inhalant version of insulin. The stock was up 10 percent just ahead of the closing bell to $7.60 after hitting a 52-week high of $9.30 earlier in the day.
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