ViaCyte Raises $10M, Moves to Human Trial with New Diabetes Product

Xconomy San Diego —

San Diego-based ViaCyte said it is ready to move into human testing with a new product intended for patients with Type 1 diabetes who are at high risk for acute, life-threatening complications from severe episodes of low blood sugar (hypoglycemia).

ViaCyte said Monday that healthcare regulators in both the United States and Canada have permitted the company to proceed with the early stage clinical trial, which calls for enrolling roughly 40 patients at medical centers that include UC San Diego and the University of Alberta in Edmonton, Canada. The goal of the trial is to assess the safety of the PEC-Direct product candidate and provide definitive evidence of efficacy.

According to ViaCyte, demonstrating efficacy with just 40 patients is a function of having a well-defined endpoint—defined in this case as a clinically significant production of insulin in a patient population that has no ability to produce insulin when enrolled.

In a separate statement, ViaCyte said it has raised an additional $10 million to initiate the clinical trial and for other corporate purposes. Participants in the financing include the materials science company W.L. Gore & Associates, which is already working with ViaCyte, Asset Management Partners, and other undisclosed investors.

The non-profit research group JDRF also participated in the financing, according to the company.

Since 2004, when three companies merged to form what is now ViaCyte, the company has raised about $100 million from investors, and $75 million in project funding from JDRF and the California Institute for Regenerative Medicine (CIRM).

ViaCyte was founded to advance technology that encapsulates pancreatic progenitor cells (stem cells engineered to develop into fully differentiated pancreatic cells) within a semi-permeable membrane. This packet is implanted under the skin. Once the pancreatic cells develop fully, they secrete insulin and other hormones that pass through the membrane, similar to how tea seeps out of a tea bag. White blood cells are too big to penetrate the membrane, however, so the packet protects the implanted pancreatic cells from a patient’s own immune system.

In March, ViaCyte said it has been developing a new type of packet called PEC-Direct, for Type 1 diabetes patients who are prone to severe hypoglycemic episodes. The company has engineered this membrane so a patient’s blood vessels can grow through the membrane and connect directly with the stem cell-derived pancreatic cells. In this case, however, the membrane is not designed to protect against a patient’s immune system. So PEC-Direct patients would also get immune-suppressant drugs.

Insulin therapy has transformed Type 1 diabetes from a death sentence to a chronic illness, but it is far from a cure, said Paul Laikind, president and CEO of ViaCyte. Patients with Type 1 diabetes must still deal the daily impact of the disease and are at risk for long-term complications.

The company said PEC-Direct is targeting a subset of patients with Type 1 diabetes who are at high risk for life-threatening events because they are acutely vulnerable to severe hypoglycemic episodes, or they can’t really tell when or if they are hypoglycemic.

ViaCyte estimates that about 140,000 people in the United States and Canada are at risk for severe hypoglycemic episodes.