Vertex plunks down $950M for stem cell player Semma Therapeutics

Vertex Pharma
The Semma Therapeutics deal is the latest in Vertex’s deal spree. Just this year, the company has inked deals around gene editing and protein degradation, expanded its partnership with CRISPR Therapeutics and snapped up gene-editing player Exonics. (Vertex Pharma)

Vertex Pharmaceuticals is jumping into diabetes. The cystic fibrosis specialist is snapping up Semma Therapeutics and its stem cell-based diabetes treatments for $950 million in an all-cash deal slated to close in the fourth quarter. 

Douglas Melton, Ph.D., founded Semma in 2014 to work on a potential cure for Type 1 diabetes. His idea was turning undifferentiated pluripotent stem cells into insulin-producing pancreatic beta cells that could be transplanted into patients. The company unveiled itself the following year with a $44 million series A and a partnership with Novartis, chosen over other diabetes-focused suitors for its expertise in cell therapy. 

The biotech went on to raise a head-turning $114 million series B round in 2017 and hired Bastiano Sanna as its CEO. Sanna was formerly the chief operating officer at Magenta Therapeutics and global head of stem cell transplant programs at Novartis, where he helped oversee the Big Pharma’s CAR-T cell therapy development. 

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Now, Vertex is betting it big on a treatment that could replace the daily injections and chronic care that make up treatment for people with Type 1 diabetes. 

“This acquisition aligns perfectly with our strategy of investing in scientific innovation to create transformative medicines for people with serious diseases in specialty markets,” said Jeffrey Leiden, M.D., Ph.D., the CEO of Vertex who will hand over the reins to Chief Medical Officer Reshma Kewalramani in April next year.  

Semma’s approach to treating diabetes is two-pronged: One is a transplant of pancreatic cells directly into the liver of patients, where they will produce insulin to control blood sugar levels. However, such transplants require long-term immunosuppression so that the immune system does not reject the treatment. The other involves a device that delivers and protects the transplanted cells from the patient’s immune system. 

RELATED: Y Combinator startup pursuing 'scarless' pouch for cell transplants in diabetes 

“We see a substantial opportunity to transform the treatment paradigm for type 1 diabetes, a specialty disease cared for by endocrinologists, both by advancing the development and manufacturing of the cells themselves, as well as through the highly innovative cell/device combination,” Leiden said. 

The Semma deal is the latest in Vertex’s deal spree. In June, the company forked over $420 million upfront to dive deeper into the muscular dystrophy space. It ponied up $175 million to expand its deal with CRISPR Therapeutics and $245 million to acquire Exonics and its gene-editing pipeline. That move followed another gene-editing deal with Arbor Biotechnologies in January and a protein degradation partnership with Kymera Therapeutics that cost $70 million upfront but came backloaded with more than $1 billion in milestones.

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