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J&J pours another $20M into ViaCyte and sizes up its diabetes treatment

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Johnson & Johnson ($JNJ) has deepened its ties to regenerative medicine outfit ViaCyte, handing the biotech $20 million in exchange for a future stake in the company and the right to acquire its in-development diabetes medication.

Under the deal, J&J's cash buys it a note convertible into equity and an exclusive chance to acquire VC-01, ViaCyte's stem cell-derived treatment for Type 1 diabetes.

The candidate works by loading human pancreatic progenitor cells into a proprietary device that is then implanted under the skin. From there, the progenitor cells mature into insulin-producing ones that can support diabetics' overmatched pancreases.

J&J's latest overture comes on the heels of a $5.4 million stock sale earlier this month, which brought ViaCyte's C round to $16.1 million. Meanwhile, the FDA has signed off on the company's investigational new drug application, clearing the way for it to begin first-in-human trials on VC-01. Now, with the cash to follow through, ViaCyte is setting out to confirm the early promise of its candidate, CEO Paul Laikind said.

"These important transactions provide us with additional resources we need to pursue the further development of the VC-01 product candidate as a potential new treatment option for patients with Type 1 diabetes," Laikind said in a statement.

J&J's right to acquire will continue through ViaCyte's planned Phase I, the company said.

- read the statement

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