Osiris Therapeutics (OSIR) has joined the biotech bull market of 2012 with an 80% return. Earlier this year Osiris became the very first company to have an approved product with a cell therapy as the main component. Investors have been optimistic ever since, but should they? The company is now valued at $320 million and there are a lot of investment risks in regards to this company; and there might be better plays in terms of overall value to sales potential.

Osiris Therapeutics and Valuation/Sales

Osiris is the developer of cell therapy product Prochymal, an approved product in both Canada and New Zealand for the treatment of graft-vs-host disease (GvHD) in children. The problem with Prochymal, and Osiris Therapeutics, is that the market has clearly overvalued the stock. The company operates in two segments, biosurgery (which returns revenue) and therapeutics (which includes Prochymal). The company's biosurgery segment achieved just $2.2 million during its last quarter, which was a 32% year-over-year gain. In 2013, the company should produce less than $15 million in sales, from this segment.

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