April 15, 2016
By Alex Keown, BioSpace.com Breaking News Staff
COLUMBIA, Md. – Another Osiris Therapeutics executive has left the company. This time though was not voluntary. The company terminated Jon Hopper, its chief medical officer, and is now searching for his replacement, the company announced in a filing with the U.S. Securities and Exchange Commission.
There was no indication given as to the reason for his termination. Shares of Osiris are up this morning, hitting a high of $6.63 per share following the news going public, although shares fell in after-hours trading Thursday. Since July, Osiris stock has been on a steady decline, falling from a high of $22.64 per share.
Hopper’s responsibilities will be assumed by others with the company’s management team, including its director of Regulatory Affairs and its chief scientific officer, according to a report in Sonoran Weekly Review.
Hopper’s termination comes little more than a month following Osiris tapping Dwayne Montgomery as president and chief executive officer. Montgomery had been serving as interim CEO since February. He was the company’s chief business officer. The previous CEO Lode Debrabandere resigned for personal reasons, although there have been allegations of financial misconduct.
The company has been undergoing a transformation from a clinical research company to a commercial enterprise, and a recent report in Seeking Alpha raised some red flags about the company, which also included the resignation of another Osiris executive, Phil Jacoby, the company’s chief financial officer. Another Osiris red flag that BioSpace previously reported included the company’s registered public accounting firm, BDO USA, resigned in December. BDO indicated that Osiris’ 2013 and 2014 financial statements were fine, it “advised that their opinion on the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2014 should no longer be relied upon due to management’s identification of a material weakness in internal controls over financial reporting related to the timing of revenue recognition under certain distribution contracts.”
Osiris manufactures three different human tissue products. The primary one is Grafix, which is used for wound care from problems such as burns and diabetic foot ulcers. Grafix provides the largest revenue stream for the company, about 90 percent, according to reports. Additional products include Cartiform, a cartilage allograft and BIO4, a bone allograft. BIO4 has been a source of issue with the company. Reports have alleged the U.S. Food and Drug Administration ruled against the drug, which was formerly marketed as Ovation. Rather than destroying the product, Osiris changed its name and sold it to other distributors, according to allegations.
In addition to the allegations raised in the Seeking Alpha report, the company’s main competitor, MiMedx, publically accusing Osiris of overstating its revenues.
In March, Osiris Therapeutics, a cellular and regenerative medicines company, received a letter of deficiency from the NASDAQ. The letter said the company was not in compliance with NASDAQ Listing Rule 5250 (c)(1) after failing to file its form 10-K with the SEC in a timely manner. The form was due on Dec. 31, 2015.
