ViaCyte adds to the war chest in what looks like an IPO-bound effort to bring regenerative medicine to diabetes
Stem cell therapies have long held promise if providing curative answers to chronic disease, but the field has taken decades to bear fruit despite some big hopes. A long gestating biotech out of San Diego thinks it has the secret sauce to cure type 1 diabetes, and now it’s raking in piles of cash with the potential for a major IPO in the offing.
ViaCyte has closed an additional $45 million tranche for its Series D, bringing its total fundraise for the round to $115 million with the backing of a slate of crossover investors that appear to spell a looming IPO for the long-lived regenerative medicine player, the company said Wednesday.
It’s a backstory with few contemporary comparators in the go-go world of biotech: ViaCyte was founded back in 1999 and has worked for more than two decades in relative obscurity to bring its stem-cell platform into type 1 diabetes. It’s been a long wait, but not an uncommon one for the slow-to-gestate stem cell field.
The company’s lead candidate, dubbed PEC-Encap, delivers pancreatic islet precursor cells as a replacement therapy and is currently in a Phase II study. ViaCyte plans to use the funding to advance that program through the clinic as well as two others: PEC-Direct, a therapy for patients with hypoglycemia unawareness and/or extreme glycemic events that expects a Phase II readout in the first half of 2022, and PEC-QT, a CRISPR Therapeutics-partnered, gene-edited immune-evasive cell line. The latter drug is expected to enter human trials by the end of the year.
ViaCyte is calling its slate of programs “major advances in finding a functional cure for type 1 diabetes and other chronic diseases in the future,” CEO Michael Yang said in a statement. Big-name investors, meanwhile, are buying in.
The newest fundraising tranche included participation from existing investors in RA Capital Management, Bain Capital Life Sciences, TPG Capital, Sanderling Ventures and a group of “long-time insiders,” ViaCyte said. New investors jumping on board include Adage Capital Partners, Invus Group, Asymmetry Ventures, and Artis Ventures.
ViaCyte’s lead drug is the product of a collaboration with material sciences company W.L. Gore, which the partners re-upped in August. The expanded deal aimed to combine PEC-Encap with a Gore-produced membrane in what they hope will eliminate the need for immunosuppressive drugs. The product is designed to be implanted underneath the skin and deliver pancreatic progenitor cells that can secrete insulin and control blood glucose levels, in essence becoming functional tissue.
ViaCyte had attempted to pair its stem cell technology with a different membrane before, but ran into trouble when patients’ immune systems flared up. That led them to collaborate with Gore, which first signed on to an agreement in 2017 and then chipped in with $10 million as part of a larger ViaCyte funding round in November 2018.