Transaction Provides Substantial Infusion of Cash as Osiris Prepares for Commercial Launch of Prochymal™

Osiris Therapeutics, Inc. (NASDAQ:OSIR) today announced that it has entered into a definitive agreement with NuVasive, Inc. (NASDAQ:NUVA) to sell Osiris’ Osteocel business for up to $85 million in upfront and milestone payments. In a separate agreement worth up to an additional $52 million in revenue to Osiris, the company will process and supply NuVasive with Osteocel for up to 18 months. Osteocel is a viable bone matrix product that preserves the native stem cell population that resides in marrow rich bone and is intended for use in orthopedic indications for bone regeneration.

“The time for commercial scale cell therapies has arrived,” said C. Randal Mills, Ph.D., President and Chief Executive Officer of Osiris Therapeutics. “We are very excited about this landmark transaction and believe it underscores the ability of Osiris to generate substantial value through our proprietary technology platform. Given NuVasive’s impressive growth in the spine market, we expect them to be very successful with Osteocel and look forward to working with their team.”

Mills continued, “With the continued positive developments in Prochymal™ and Chondrogen™, it is now time for Osiris to focus its efforts on the successful launch of our core products. This transaction provides Osiris with a substantial amount of non-dilutive capital over the near-term, and shapes the organization in a way that is optimal for both the Osteocel employees and the long term mission of Osiris.”

Alex Lukianov, Chairman and Chief Executive Officer of NuVasive, said, “This acquisition is synergistic for both of our companies. This proven stem cell technology directly supports our strategy of expanding our offering of innovative and proprietary products. Osteocel provides our exclusive sales force with a unique stem cell-based bone graft that is complementary to our Formagraft product and will add meaningful revenue in the short term. This transaction also includes an opportunity for our companies to collaborate together on the next generation, culture expanded version of Osteocel.”

As part of the transaction, Osiris retains the rights to culture expanded versions of the product, previously referred to as Osteocel-XC. However, included in the agreement is an option for NuVasive to acquire the rights to the expanded version of the product at predefined terms as well as a right of first negotiation if Osiris elects to partner the product with a third-party.

Completion of the transaction is subject to Hart-Scott-Rodino review, Osiris shareholder approval and other customary closing conditions.

Osiris will discuss details of the transaction during the Company’s first quarter earnings call on Friday, May 9, 2008 at 9:00 a.m. EDT.