Diabetes startup rakes in $44M and teams up with Novartis on cell therapy

Cambridge, MA, biotech Semma Therapeutics is developing a stem cell technology that could help diabetics return to producing their own insulin, and the nascent company picked up $44 million and a handshake with Novartis ($NVS) to get rolling.

Semma is at work on a cell therapy for Type 1 diabetes through which it plans to craft insulin-producing human beta cells in the lab and transplant them into patients, thereby reversing the root cause of the disease. And the biotech plans to engineer a device that will allow for the safe introduction of those cells into the body without the need for immunosuppression, hoping to circumvent a common pratfall in cell therapy. The method, developed in the lab of Harvard professor and Semma co-founder Doug Melton, was first published in Cell last year, touted as a major advance for diabetes.

MPM's Robert Millman

Over the past few months, as scientists toasted Melton's team, MPM Capital began quietly seeding what would become Semma, assembling a team around the technology and rallying investors to support it. MPM's Robert Millman, most recently of the Novartis-acquired CoStim Pharmaceuticals, is stepping in as CEO, joined by Vice President for Manufacturing Walter Blättler, and Felicia Pagliuca, lead author of the Cell paper and Semma's director of technology.

MPM led the biotech's A round, joined by Fidelity Biosciences, Arch Venture Partners and Medtronic ($MDT). Separately, Semma has entered an undisclosed agreement with Novartis, giving it an upfront payment that, combined with the equity raise, should fund its preclinical project through the human proof-of-concept phase, the biotech said.

"The ability to generate glucose-responsive, human beta cells through controlled differentiation of stem cells will accelerate the development of new therapeutics and I am thrilled and honored to be part of it," Millman said in a statement. "We have assembled an experienced team with a track record of success in drug development. Our goal is to ensure we bring this remarkable discovery to patients as quickly as possible to reduce or eliminate their reliance on daily insulin injections."

- read the announcement