The Center for Medicare & Medicaid Services also cleared the pathway for a permanent reimbursement code for Grafix, Osiris's wound-care matrix containing stem cells, on Tuesday.

A permanent code makes reimbursement for the treatment faster and easier, thus increasing the chances of a physician prescribing it.

Osiris said if the permanent reimbursement code for Grafix was approved, it could become effective from January next year.

First-quarter revenue from the company's biosurgery products - Grafix and a bone matrix product called Ovation - have risen about 50 percent to $1.14 million.

Shares of the Columbia, Maryland-based company were trading up 8 percent at $6.98 Wednesday morning on the Nasdaq. They jumped to $7.49 earlier in the session.

(Reporting by Vidya P L Nathan in Bangalore; Editing by Don Sebastian)

(This story was corrected in paragraph 2 to say the regulator was Center for Medicare & Medicaid Services, not the U.S. FDA)

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