News Release

Osiris Therapeutics Reports Key Findings in SCIENCE Verifying Existence of Adult Stem Cells

Peer-Reviewed Publication

Osiris Therapeutics, Inc.

Baltimore, MD -- Researchers at Osiris Therapeutics, Inc. reported results from studies confirming the existence and capability of human adult stem cells to form structural and connective tissues. These key findings, published in the April 2, 1999 issue of the journal Science, demonstrate that adult stem cells, referred to as mesenchymal stem cells or MSCs, are capable of forming multiple normal human tissues. In particular, human adult stem cells can undergo substantial expansion starting from a single stem cell, and the resulting expanded cell population can be maintained as stem cells in culture or induced selectively to form bone, cartilage or fat.

These adult stem cells are maintained throughout life and form normal tissue through a process similar to early tissue formation. Adult stem cells first undergo multiple divisions (proliferation), after which they proceed down a particular tissue development pathway (commitment), leading ultimately to the formation of specialized cells (differentiation) and the fabrication of unique structural components (maturation) characteristic of healthy, mature connective tissue. Adult stem cells are responsible for the normal replacement and regeneration of human connective tissues, including bone marrow stroma, bone, cartilage, muscle, tendon, ligament and fat. The tissue formation process is called mesengenesis.

Osiris Therapeutics is engaged in the development and commercialization of cellular therapeutics for the regeneration and functional restoration of damaged or diseased tissue. Osiris has developed proprietary technology to isolate and greatly expand adult stem cells for their use as cell therapeutic products for the regeneration of tissues damaged through injury, aging or degenerative disease. The Company is a pioneer in the development of this technology, owns more than 50 issued and pending stem cell patents, and believes that it is the first company to commercialize products from adult stem cells for the emerging field of Regenerative Medicine.

Significance of Science Article to Arouse New Interest in Stem Cells

According to Mark F. Pittenger, Ph.D., Associate Director, Muscle Research and Cell Biology at Osiris and primary author of the Science publication, "The adult stem cells isolated from donor bone marrow prove that we can purify this rare stem cell population and induce its differentiation into specific tissues following expansion, even when we start from a single cell." Dr. Pittenger adds, "These cells are fascinating in their ability to respond to stimuli. The growth and differentiation conditions for each lineage, such as bone, cartilage and fat, are quite different, involving a combination of growth factors, nutrients, spatial organization and mechanical forces. It has taken several years to refine our assays, but we now have a clearer understanding of the differentiation mechanisms."

Dr. Pittenger observed, "When we saw that human adult stem cells could be expanded from a single cell that would differentiate to all three lineages, that really clinched it. Each of the lineages that we reported in Science has mportant health implications associated with them, ranging from the direct regeneration of bone and cartilage injuries, to the treatment of osteoporosis, osteoarthritis and obesity."

Osiris Chief Scientific Officer Sees Paradigm Shift with Adult Stem Cells

Daniel R. Marshak, Ph.D., Senior Vice President & Chief Scientific Officer for Osiris, as well as senior author of the Science article stated, "Adult stem cells are responsible for tissue turnover throughout our lifetime. The blood-forming stem cell, or hematopoietic stem cell (HSC), was the first fully characterized adult stem cell. The adult mesenchymal stem cell has now been established, and several others may follow." Dr. Marshak adds, "Regeneration of damaged or diseased tissue based on the use of adult stem cells will become a new area of medicine."

Dr. Marshak continues, "The new medical paradigm confirms what developmental biologists have long maintained: that tissue regeneration recapitulates the normal developmental pattern. Adult stem cells retain this developmental capability, they have been well-characterized, and their growth and differentiation can be controlled."

Substantial Promise for a New Field of Regenerative Medicine

James S. Burns, President & Chief Executive Officer of Osiris stated, "The studies reported in Science provide further proof that our efforts to commercialize products based on adult stem cells remain on target. Furthermore, there is a clear difference between adult stem cells and either embryonic stem cells or stem cells derived from fetal tissue -- our stem cells are readily available from a small sample of patient-derived or donor-derived marrow. Burns continues, "We are developing multiple products based on adult mesenchymal stem cells. In addition, we are already conducting a clinical trial for our first product, Stromagen, a patient- derived stem cell infusion product for the treatment of breast cancer patients following chemotherapy. The practical use of adult stem cells is not 10-15 years away, but well along in the commercialization process."

"The use of adult stem cells opens an entirely new field of Regenerative Medicine where stem cells are used for the regeneration and functional restoration of damaged or diseased tissue. We believe that adult stem cells will become a routine treatment for cancer, immune disorders, orthopaedic injuries, transplant medicine, congestive heart failure and degenerative diseases," Burns concluded.

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