San Diego biotech ViaCyte, which is developing cell replacement therapies that could eventually let people with type 1 diabetes reduce or eliminate insulin injections, has inked a deal to be acquired by rival Vertex Pharmaceuticals for $320 million in cash.
The buyout would bring together two companies deeply involved in stem cell research to find a “functional cure” for type 1 diabetes. People with the condition must closely monitor blood sugar to prevent sinking or spiking, which could lead to seizures, organ damage and even death.
As of 2019, roughly 1.6 million Americans over the age of 20 had type 1 diabetes and were taking insulin, according to statistics from the Centers for Disease Control.
Founded in 1999, ViaCyte has about 125 employees in San Diego. The company says it has hundreds of patents around stem cell-derived islet cell replacement therapies to treat type 1 diabetes, as well as insulin-required type 2. It has raised more than $115 million in venture capital.
Vertex, based on Boston, declined to answer questions about the San Diego operations, referring them to ViaCyte until the deal closes. Efforts to reach ViaCyte were unsuccessful.
But ViaCyte is in the throes of early-stage clinical trials where a credit card-sized implant with pancreatic cells is inserted under the skin of a person with type 1 diabetes — usually around the forearm or lower back. Late last year, a pair of published studies reported that those cells had been triggered to secrete insulin – though results involved only a small number of participants and more work is required.
Still, the results created optimism about the potential of cell therapy for type 1 diabetes.
“There’s no doubt in our mind that the cells work. The challenge has been the engineering to figure out how to get the cells into the body in a way that will allow the cells to do their thing,” said Dr. Howard Foyt, ViaCyte’s former chief medical officer, in an interview late last year with the Union-Tribune.
Vertex, a publicly traded firm, has similar stem-cell treatment trials underway involving an injectable therapy for diabetes called VX-880. It is working on various delivery approaches, including potentially an implantable device. It claims to have seen positive signs of insulin production in the first person enrolled in the study involving an injection of cells into the liver.
“VX-880 has successfully demonstrated clinical proof of concept in type 1 diabetes, and the acquisition of ViaCyte will accelerate our goal of transforming, if not curing, type 1 diabetes by expanding our capabilities and bringing additional tools, technologies and assets to our current stem cell-based programs,” said Reshma Kewalramani, chief executive of Vertex, in a statement.
Vertex has 3,900 employees and a handful of approved treatments for cystic fibrosis, as well as additional drug development research projects underway in other areas. Revenue last year was $7.57 billion.
Vertex expects the sale to close later this year, pending the expiration of an antitrust waiting period.
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