Columbia, Maryland-based Osiris Therapeutics will get $ 130 million dollars initially from Genzyme Corp for work on the drugs Prochymal and Chondrogen, using adult stem cells, the two companies announced. The products are designed to control inflammation, promote new-tissue growth and prevent scars.

The rest of the money – in a deal worth up to $ 1.38 billion dollars - will consist of payments for reaching development, regulatory and sales goals.

Prochymal is in advanced stages of human testing against graft-versus-host disease, a complication of bone-marrow transplants. It also is in advanced human trials to treat Crohn's disease, and other conditions. Chondrogen is about to undergo a mid-to-late- stage trial for arthritis of the knee.

If approved by health authorities, Massachusetts-based biotech Genzyme will sell the drugs outside the U.S. and Canada, while Osiris would be marketing the drugs in those two countries.