Osiris Therapeutics Reports Second Quarter 2012 Financial Results

Biosurgery sales rise 43% over prior quarter, Prochymal® becomes first approved stem cell drug and company ends the first half with $40 million in cash and no debt

Osiris Therapeutics Reports Second Quarter 2012 Financial Results

Osiris Therapeutics, Inc.Erica Elchin, 443-545-1834

(NASDAQ: OSIR), the leading stem cell company focused on developing and marketing products to treat medical conditions in inflammatory, cardiovascular, orthopedic and wound healing markets, announced today its results for the second quarter ended June 30, 2012.

“This past quarter was not only memorable, but monumental, for Osiris,” stated C. Randal Mills, Ph.D., President and Chief Executive Officer of Osiris Therapeutics. “We have set a new benchmark to measure our success, and remain as committed as ever to extending the reach of this remarkable technology. Whether through our Biosurgery or Therapeutics units, we will continue to develop innovative cell therapy solutions for patients in need.”

Biosurgery product revenue rose 43% from the previous quarter to $1.63 million. As of June 30, 2012, Osiris had $40.1 million of cash, receivables and short-term investments.

Research and development expenses for the second quarter of 2012 were $4.1 million, compared to $5.2 million incurred in the second quarter of 2011. General and administrative (G&A) expenses were $1.4 million for the second quarter of 2012 compared to $3.3 million for the same period of the prior year. The 2011 G&A expense included a non-cash charge of $1.7 million related to the extension of the expiration date of a warrant. Net cash used in operations for the three months ended June 30, 2012 was $4.4 million.

A webcast and conference call to discuss the financial results is scheduled for today, July 30, 2012 at 9:00 a.m. ET. To access the webcast, visit the Investor Relations section of the company's website at . Alternatively, callers may participate in the conference call by dialing (877) 303-6133 (U.S. participants) or (970) 315-0493 (international participants).

A replay of the conference call will be available approximately two hours after the completion of the call through August 05, 2012. Callers can access the replay by dialing (855) 859-2056 (U.S. participants) or (404) 537-3406 (international participants). The audio replay confirmation code is 99408506. To access a replay of the webcast, visit the Investor Relations section of the company's website at .

Osiris Therapeutics, Inc., having developed the world’s first approved stem cell drug, Prochymal®, is the leading stem cell company. The company is focused on developing and marketing products to treat medical conditions in inflammatory, cardiovascular, orthopedic and wound healing markets. In Biosurgery, Osiris currently markets Grafix® for burns and chronic wounds, and Ovation® for orthopedic applications. Osiris is a fully integrated company with capabilities in research, development, manufacturing and distribution of stem cell products. Osiris has developed an extensive intellectual property portfolio to protect the company's technology, including 48 U.S. and 144 foreign patents.

Osiris, Prochymal, Grafix and Ovation are registered trademarks of Osiris Therapeutics, Inc. More information can be found on the company's website, . (OSIR-G)

This press release contains forward-looking statements. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as "anticipate," "believe," "continue," "ongoing," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project" or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements may include, without limitation, statements regarding any of the following: our product development efforts; our clinical trials and anticipated regulatory requirements, and our ability to successfully navigate these requirements; the success of our product candidates in development; status of the regulatory process for our biologic drug candidates; implementation of our corporate strategy; our financial performance; our product research and development activities and projected expenditures, including our anticipated timeline and clinical strategy for mesenchymal stem cells and biologic drug candidates and marketed Biosurgery products (including Prochymal®, Chondrogen®, Grafix® and Ovation®); our cash needs; patents, trademarks and other proprietary rights; the safety and ability of our products and potential products to treat disease; our ability to supply a sufficient amount of our marketed products or product candidates and, if approved or otherwise commercially available, products to meet demand; our costs to comply with governmental regulations; our relationship with collaborating partners; our ability to maintain and benefit from our collaborative arrangements; our ability to benefit from government contracts; our plans for sales and marketing; our plans regarding facilities; types of regulatory frameworks we expect will be applicable to our products and potential products; and results of our scientific research. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in the section entitled "Risk Factors" in our Annual Report on Form 10-K and other Periodic Reports filed on Form 10-Q, with the United States Securities and Exchange Commission. Accordingly, you should not unduly rely on these forward-looking statements. We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to reflect the occurrence of unanticipated events.