ViaCyte bags $80M to trial diabetes stem cell therapies

ViaCyte CEO Paul Laikind (ViaCyte)

ViaCyte has raised $80 million to continue clinical development of its cell therapy treatments for diabetes. The series D positions ViaCyte to generate phase 1/2 data on one candidate while working to get another back into the clinic.

San Diego-based ViaCyte is at the forefront of efforts to develop stem cell-derived cell replacement therapies capable of treating insulin-requiring diabetes. If these products work as hoped, they will provide diabetics with a lasting source of insulin-producing cells, thereby freeing them from some of the disease management burdens they face today.

ViaCyte has been plugging away at the idea for years, riding out ebbs and flows in excitement about regenerative medicine. Today, ViaCyte is riding high. Led by Bain Capital Life Sciences, a syndicate heavy with crossover investors has committed $80 million in two tranches.

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The financing comes as ViaCyte closes in on the readout from an early clinical test of one of its assets, PEC-Direct. Around the middle of next year, ViaCyte expects to learn what effect PEC-Direct has on levels of C peptide, a biomarker for endogenous insulin production. The goal is to see clinically significant levels of C peptide in high-risk Type 1 diabetics who were negative for the biomarker going into the trial.

“Upon successful completion of the study we would discuss results with the regulators at an end of phase 2 meeting and propose continuation as a phase 2/3 registration study. We expect the primary efficacy endpoint to remain insulin production but combined with other indicators of efficacy,” ViaCyte CEO Paul Laikind said. ViaCyte plans to take PEC-Direct forward unpartnered.

That is one of the big tasks facing ViaCyte. The other involves PEC-Encap, a candidate that could expand use of ViaCyte’s pancreatic progenitor cells. PEC-Direct requires patients to take immunosuppressants long term as the body recognizes it as foreign. That limits the use of the product to high-risk patients. 

With PEC-Encap, ViaCyte hopes to dial down the foreign body response and thereby enable use in lower-risk patients. That aspiration remains a work in progress, though.

“Prior to initiating clinical evaluation of PEC-Encap, we knew that the product could be negatively impacted by an aggressive foreign body response to the Encaptra Cell Delivery Device. However, we didn’t know how aggressive the response would be in humans. As it turned out, the response was quite aggressive,” Laikind said.

Working with W. L. Gore & Associates, ViaCyte has sought to address the foreign body response problem by modifying the membrane material, ePTFE. The goal is to dial down the body response while improving blood vessel on the surface of the device.

If the modifications work, ViaCyte will improve the engraftment of the product, but it will be a while before it finds out whether it has succeeded. ViaCyte expects to resume clinical evaluation of the product next year and have results six to 12 months later.