Osiris Therapeutics, a stem cell company, has entered into an agreement with a wholly-owned subsidiary of Mesoblast for the sale of Osiris’ culture-expanded mesenchymal stem cell (ceMSC) business, including Prochymal, in a transaction worth up to $100 million. Additionally, Osiris will receive royalty payments on sales of Prochymal and other products utilizing the acquired ceMSC technology.
Osiris expects to record the closing and asset transfer consideration of $51 million in the fourth quarter of 2013. The company has previously expensed the R&D costs of its ceMSC business as incurred, therefore most of the consideration will be recognized as a gain on the sale of the business segment. Last year, Osiris incurred $12.5 million in Prochymal-related expenses, which may be eliminated going forward.
Of the $50 million in initial consideration, $35 million will be paid in cash. A $15 million payment to be received upon delivery of the ceMSC assets, and any future milestone payments, will be made in cash or stock at Mesoblast’s election.