ViaCyte acquires J&J IP to further its quest to treat diabetes using implanted pancreatic cells

The implantable Encaptra Drug Delivery System--Courtesy of ViaCyte

ViaCyte, the developer of an implant for the delivery of insulin-producing cells that could someday functionally cure Type 1 diabetes, has acquired the exclusive rights to intellectual property possessed by Johnson & Johnson's ($JNJ) Janssen BetaLogics drug R&D unit.

ViaCyte gains exclusive access to an additional 145 J&J patents (including 15 in the U.S.) related to metabolic diseases, and 565 pending applications. Armed with access to all BetaLogics intellectual property related to metabolic diseases, ViaCyte will have 360 patents at its disposal (including its own), and now boasts 710 pending applications.

Financial terms of the agreement were not disclosed. ViaCyte remains independent of J&J, and the deal does not convey the commercialization to future products.

"For more than a decade BetaLogics and ViaCyte have been independently working toward a stem cell-derived therapy for diabetes. By combining the intellectual property and other assets of BetaLogics with ViaCyte, we will further strengthen our advanced program focused on insulin-dependent diabetes and solidify our leadership in the field," said ViaCyte CEO Paul Laikind, in a statement. "We look forward to delivering effective new treatments for this difficult disease."

Viacyte is targeting Type 1 diabetes, which appears during childhood. It affects more than 200,000 Americans per year, compared to 3 million-plus in the case of Type 2 diabetes. But ViaCyte said its approach could become important for patients with that version of the disease as well.

The company has developed a method of differentiating embryonic stem cells into so-called pancreatic progenitor cells. The pancreatic cells are then encapsulated in the subcutaneous Encaptra drug delivery implant, where they further differentiate into insulin-producing cells. The devices enables the pancreatic cells to transform into more specialized cells by protecting them from the patient's immune system.

The Encaptra consists of a semi-permeable cell containment barrier that allows the pancreatic cells within access to nutrients like glucose. Although the pancreatic cells are fully contained, their byproducts (most notably insulin) are allowed to leave the device, to the benefit of the patient, according to the company website.

ViaCyte's combination product is being studied in early stage clinical trial of safety tolerability and efficacy.

As noted, J&J's Betalogics is also conducting diabetes research of cells placed in an implanted device. So is 2015 Fierce 15 company Semma Therapeutics of Cambridge, MA. A recent $44 million Series A round is supposed to get the company's combination product into human proof-of-concept testing. MPM Capital led the round with participation from Fidelity Biosciences, Arch Venture Partners and Medtronic ($MDT). It also has an R&D partnership with Novartis ($NVS).

Meanwhile, Boston's Intarcia is a developing a subdermal pump for diabetes drug delivery, though it does not involve the use of stem cells. The company's prospects were last year buoyed by a clinical trial showing that its drug pump beat Merck's ($MRK) mega blockbuster oral diabetes med Januvia at reducing HbA1C levels and weight loss in a Phase III clinical trial, increasing hopes for the combination product's FDA approval in 2016.

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Special Report: FierceMedicalDevices' 2015 Fierce 15 - Semma Therapeutics

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