COLUMBIA, Md.–(BUSINESS WIRE)–Jan 7, 2008 – Osiris Therapeutics, Inc. (NASDAQ: OSIR), a leading stem cell therapeutic company, announced today that it will receive a $500,000 milestone payment under its collaboration agreement with JCR Pharmaceuticals. The milestone payment was triggered when JCR Pharmaceuticals filed a Clinical Trial Notice to the Pharmaceuticals and Medical Devices Agency in Japan to initiate a clinical trial in patients with Graft vs. Host Disease (GvHD).

“GvHD is a devastating condition that afflicts bone marrow transplant recipients worldwide. We are very pleased that through our combined efforts, we have been able to advance this important program in Japan,” said C. Randal Mills, Ph.D., President and Chief Executive Officer of Osiris Therapeutics. “Our collaboration with JCR Pharmaceuticals is representative of Osiris’ commitment to make our life saving products available to patients around the world.”

The milestone payment arises from a drug discovery alliance with JCR Pharmaceuticals focusing on the commercialization of Prochymal in Japan for the treatment of patients with GvHD. Under the terms of the collaboration, JCR will bear all costs associated with bringing the drug to market in Japan. Osiris Therapeutics is eligible to receive additional milestone payments of up to $6.5 million, as well as sales milestones and significant royalty payments on sales of the drug in Japan.

Prochymal is a highly purified formulation of mesenchymal stem cells (MSCs) that are grown in culture, permitting large-scale production. MSCs are able to down-regulate severe inflammation and work at the cellular level to rebuild damaged tissue through the coordinated release of tissue specific growth factors. In a Phase II trial for acute GvHD, the administration of Prochymal resulted in a 77% complete remission rate.
Prochymal is currently in Phase III clinical trials for the treatment of Graft vs. Host Disease and Crohn’s Disease and a Phase II trial for type 1 diabetes. Prochymal has also demonstrated preliminary efficacy in the treatment of patients experiencing heart attacks. Prochymal has established a strong safety profile in seven previous Phase I and II trials.

About Osiris Therapeutics

Osiris Therapeutics, Inc. is a leading stem cell therapeutic company focused on developing and marketing products to treat medical conditions in the inflammatory, orthopedic and cardiovascular areas. Osiris currently markets and sells Osteocel(R) for regenerating bone in orthopedic indications. Prochymal(TM) is being evaluated in Phase III clinical trials for three indications, including acute and steroid refractory Graft versus Host Disease and also Crohn’s disease, and is the only stem cell therapeutic currently designated by FDA as both an Orphan Drug and Fast Track product. Osiris has also partnered with Genzyme Corporation to develop Prochymal(TM) as a medical countermeasure to nuclear terrorism and other radiological emergencies. Prochymal is also being developed for the repair of heart tissue following a heart attack and for the protection of pancreatic islet cells in patients with type 1 diabetes. The Company’s pipeline of internally developed biologic drug candidates under evaluation also includes Chondrogen(TM) for arthritis in the knee. Osiris is a fully integrated company, having developed capabilities in research, development, manufacturing, marketing and distribution of stem cell products. Osiris has developed an extensive intellectual property portfolio to protect the company’s technology in the United States and a number of foreign countries including 47 U.S. and 215 foreign patents owned or licensed. More information can be found on the company’s website, www.Osiris.com.

COLUMBIA, Md.–(BUSINESS WIRE)–Jan. 7, 2008 – Osiris Therapeutics, Inc. (NASDAQ:OSIR) today announced it has reclaimed sole worldwide rights to cardiovascular indications for Prochymal and terminated its development and commercialization agreement with Boston Scientific Corporation in order to provide Osiris with the flexibility to enter more strategically beneficial relationships.

“This step was critical to realizing the full value of our proprietary stem cell technology,” stated C. Randal Mills, Ph.D., President and Chief Executive Officer. “Prochymal continues to demonstrate therapeutic utility across multiple disease states, as evident by our recent Defense Department contract for acute radiation syndrome. As a result of this move, we now have the freedom to enter into territory-specific, rather than indication-specific collaborations for Prochymal. This also allows us to accelerate the development of Prochymal for the treatment of acute myocardial infarction, which produced very encouraging results in early clinical trials.”

Under the terms of the agreement Osiris will immediately regain worldwide rights to its stem cell technology for all cardiovascular indications. In exchange, Osiris has agreed to relieve Boston Scientific of a $50 million loan obligation and $45 million in development payments. Additionally, Osiris will repay a $5 million debt plus accrued interest in four quarterly installments.