Michael Yang, ViaCyte CEO

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.

In­side Track: Be­hind the Scenes of a Ma­jor Biotech SPAC

Dr. David Hung and Michelle Doig are no strangers to the SPAC phenomenon. As Founder and CEO of Nuvation Bio, a biotech company tackling some of the greatest unmet needs in oncology, Dr. Hung recently took the company public in one of this year’s biggest SPAC related deals. And as Partner at Omega Funds, Doig not only led and syndicated Nuvation Bio’s Series A, but is now also President of the newly formed, Omega-sponsored, Omega Alpha SPAC (Nasdaq: OMEG; oversubscribed $138m IPO priced January 6, 2021).

Harith Rajagopalan (Fractyl)

Af­ter a decade in the Type 2 di­a­betes game, Fractyl Lab­o­ra­to­ries recharges with a fresh $100M and a new name

Harith Rajagopalan compared the way Type 2 diabetes is managed to sticking your fingers in a dam that’s leaking from a number of places.

You can take drugs to lower your blood sugar, cholesterol, or blood pressure, but you’re not addressing what he says is the core issue — the metabolic abnormality that causes the disease.

“We’re so busy plugging the holes in the dam, we don’t have time to see that the whole infrastructure is at risk,” he said. “That infrastructure is a full-body systemic metabolic abnormality called metabolic syndrome, that we’re ignoring while we’re so busy trying to treat all of the individual symptoms of the condition.”

Barry Greene, Sage CEO

UP­DAT­ED: Sage's sec­ond chance at de­pres­sion hits the PhI­II pri­ma­ry, but ques­tions re­main over dura­bil­i­ty, side ef­fects

Looking to make a comeback after a big Phase III flop, Sage Therapeutics revealed data they believe could change the entire depression treatment landscape, given the vast array of failures in the field. But some results are spooking investors, sending Sage $SAGE shares down early Tuesday.

First, the primary: Sage and Biogen reported Phase III data for once-daily zuranolone Tuesday morning, saying the experimental drug hit its primary endpoint by spurring a statistically significant change from baseline in the 17-item Hamilton Rating Scale for Depression total score. After 15 days, patients in the drug arm saw an average change of -14.1 points, compared to -12.3 on placebo.

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Michel Sade­lain puts his name and new cell en­gi­neer­ing tech be­hind 'ag­nos­tic' CAR-T start­up chas­ing epi­ge­net­ic anti­gens

It felt natural for Alain Maiore and Sebastian Amigorena to bring in Michel Sadelain as a co-founder of Mnemo Therapeutics. A CAR-T pioneer, Sadelain had been involved as an advisor since the early days — enthusiastic about Amigorena’s work in a genetic knockout that could enhance T cell memory and a new class of potential targets he’s discovered — and could introduce some well-known technologies to the toolbox. So they got the initial cash from Sofinnova Partners to plant roots in Paris and New York in early 2019; within a few months, they began to see more clearly just what the antigen discovery platform might unlock.

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Bio­gen sig­nals a big PhI­II fail­ure as the lead gene ther­a­py in their $800M Night­star buy­out goes down in flames

That $800 million buyout of Nightstar has turned into a bust for Biogen as the lead therapy in the deal failed a pivotal study, signaling a severe setback for the biotech’s ambitions in gene therapies.

The big biotech put out the word after the market closed on Monday that the gene therapy they picked up in the deal for a degenerative blindness called choroideremia failed the Phase III study, just a month after their #2 drug in the deal also flopped in a mid-stage study.

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Hal Barron, GSK R&D chief (Endpoints News)

Hal Bar­ron gam­bles $625M cash on high-wire TIG­IT act, throw­ing Glax­o­SmithK­line in­to heat­ed race and com­plet­ing next-gen I/O trin­i­ty

Count Hal Barron and GlaxoSmithKline in for the TIGIT fight.

The stakes are as high as the risks: While a growing pack of Big Pharma rivals is lending credence to the hypothesis that TIGIT will be the next big immune checkpoint and cancer drug target, the first clinical trials have shown response rates that can be described as modest at best. But Barron’s bet is on the whole “axis” that the receptor sits on, with an eye on testing its new anti-TIGIT antibody not just in combo with PD-1 but also in triplets.

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As Covid-19 shifts the world's at­ten­tion to biotech, Noubar Afeyan's Flag­ship builds $3.4B fund to fu­el new in­ven­tions. Here's the plan

A little more than a year ago, Flagship Pioneering rolled out a monster fund with $1.1 billion in it to bankroll the platform companies they were creating inside their own labs. But it turns out, that was just the prelude to a much, much larger raise, as both current investors — who’ve been reaping the rewards of some booming biotech stocks — join in with new investors betting on more in the years to come.

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Alexander Vos, VectorY CEO

Start­ing fresh in man­u­fac­tur­ing, For­bion start­up re­fu­els to steer next-gen gene ther­a­py ap­proach for ALS, Alzheimer's in­to clin­ic

Forbion laid out its case for a next-generation gene therapy approach when it took the wraps off VectorY Therapeutics and its vectorized antibody tech in February. Now, the Dutch VC has tapped an experienced hand at cell and gene therapy manufacturing to steer the ship — and pulled a marquee syndicate for a €31 million ($37.6 million) seed round.

Alexander Vos, the new CEO, is a venture partner at BioGeneration Ventures and jumps immediately from VarmX, a BGV portfolio company developing an anticoagulant. But before that, he had led Dutch CDMO PharmaCell for eight years until it was bought out by Lonza.

An­oth­er busy week for IPOs be­gins with an off-the shelf cell ther­a­py play­er sniff­ing around uni­corn sta­tus

Editor’s note: Interested in following biopharma’s fast-paced IPO market? You can bookmark our IPO Tracker here.

A flurry of biotechs are expected to hit Nasdaq this week, with two companies, Ambrx Biopharma and Century Therapeutics, setting the terms for their public debuts, with expected raises at $126 million and $200 million, respectively. Alzamend Neuro is also joining in with a $12.5 million raise and two preclinical Alzheimer’s treatments in tow.