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First Government Approved Stem Cell Drug for Crohn’s Disease

Columbia biotechnology company Osiris Therapeutics has reached a deal to sell its marquee stem cell drug, the first to win government approval, for up to $100 million.

A subsidiary of Australian company Mesoblast Ltd. has agreed to pay $50 million for the technology behind Prochymal and the drug itself, and Osiris could receive up to $50 million more if the drug passes certain clinical trials and regulatory reviews, the companies said.

Prochymal is being evaluated in a final round of clinical trials for use in treating Crohn’s disease as well as a disorder known as graft versus host disease that can occur after stem cell or bone marrow transplants. Osiris was founded in 1992 to develop stem cell therapies that can be used to stop inflammation and regenerate tissue.

The deal would mean Osiris moving on from what has been its key project for more than 20 years. Company officials said the sale allows them to focus on other projects with potential.