(Adds share movement)
Jan 3 (Reuters) - Osiris Therapeutics Inc OSIR.O said it has been awarded a $224.7 million contract from the U.S. Department of Defense to develop and stockpile Prochymal, an adult stem-cell therapy, for the repair of gastrointestinal injury resulting from radiation exposure.
Shares of the company rose 16 percent to $14.60 in late electronic trade, after closing at $12.57 Thursday on the Nasdaq.
Under the terms of the contract, the department will provide funding to Osiris for the development of Prochymal for acute radiation syndrome in two stages, with an initial amount of $4.2 million in 2008, the company said in a statement. (Reporting by Shailesh Kuber in Bangalore; Editing by Vinu Pilakkott)