ViaCyte Interview on Diabetes Stem Cell Trials & Cool Role of Gore-Tex Tech

The PEC-Encap™ (also known as VC-01) product candidate is designed to deliver pancreatic progenitor cells in an immunoprotective device.  The PEC-Direct™ product candidate delivers the pancreatic progenitor cells in a non-immunoprotective device that is designed for direct vascularization of the implanted cells.

When I think of the promise of stem cells for diabetes, the privately held California stem cell firm ViaCyte is the first biotech that comes to mind now. It has promising stem cell clinical trial work building. Today’s post is a new interview with the company’s CEO Paul Laikind. For past posts on ViaCyte see here, which includes an interview with Laikind a few years ago.

PK: The last time we talked was in March 2015. Can you please update us on the VC-01 trial? How many patients are enrolled and how many have received the sentinels? 

PL: As the leaders in this field, VC-01 broke new ground. The STEP ONE clinical trial focused initially on a subtherapeutic dose to provide an assessment of safety and the response to product candidates in patients. The trial for the PEC-Encap (a.k.a. VC-01) product candidate has enrolled approximately 20 patients and based upon initial findings, the team has decided to pause enrollment in order to make modifications to the Encaptra cell delivery device that are expected to improve engraftment. The ViaCyte team is actively working on such modifications including a collaboration with W. L. Gore.

Paul Laikind
Paul Laikind, President and CEO of ViaCyte

Taking what we learned from PEC-Encap, we initiated a clinical trial for PEC-Direct. The PEC-Direct product candidate delivers the same PEC-01 pancreatic progenitor cells as PEC-Encap but in a device designed to allow direct vascularization of the cells. The direct vascularization is expected lead to robust engraftment. PEC-Direct is being developed for patients with high-risk type 1 diabetes. The first patients in this trial have been implanted with sentinels and we are beginning to get preliminary results from those implants. The early sentinels show good vascularization and good tissue integration of the PEC-Direct product candidate.

PK: I found the sentinel idea to be quite intriguing. Have you withdrawn any and if so, what did you learn from them? Both EN20s and EN250s? Any new insights, for instance, on maturation?

PL: For the STEP ONE trial with the PEC-Encap (a.k.a. VC-01) product candidate, both sentinels and the full-size product have been implanted. The company has been evaluating the PEC-Encap candidate at a subtherapeutic dose to evaluate safety and to develop the procedures for successful implantation and engraftment. The preliminary data show that:

  • The treatment appears to be safe and well tolerated.
  • The Encaptra device appears to be protecting the implanted cells from both allogeneic and autoimmune rejection and sensitization as it was designed to do.
  • While achieving robust and consistent engraftment has been a challenge with PEC-Encap, when the pancreatic progenitor (PEC-01) cells successfully vascularize they also differentiate into pancreatic islet tissue including beta cells (insulin-producing cells).

These points were not necessarily a foregone conclusion going into the trial, so their observation in human subjects with type 1 diabetes is significant. Yet, while these results are promising, we believe certain product modifications will be required for PEC-Encap to be proven effective. We are working on ensuring a robust engraftment and reducing patient-to-patient variability before continuing with the clinical development of PEC-Encap.

The first patients in the PEC-Direct clinical trial have been implanted with sentinels and we are beginning to get preliminary results from those implants. The results are still being evaluated, but at the early time points we see vascularization and tissue integration of the PEC-Direct product candidate.

These results suggest that we are making progress translating to patients the promising results that were established in preclinical models. These early findings are important milestones in the development of a “functional cure” for type 1 diabetes as they show that the essential aspects of the product concept can translate to the clinic under appropriate conditions.

The PEC-Encap™ (also known as VC-01) product candidate is designed to deliver pancreatic progenitor cells in an immunoprotective device.  The PEC-Direct™ product candidate delivers the pancreatic progenitor cells in a non-immunoprotective device that is designed for direct vascularization of the implanted cells. Image & legend source: ViaCyte.

PK: When might the trial transition from sentinels to implanting the full dose?

PL: Enrollment for the STEP ONE trial for PEC-Encap has been paused in order to make modifications to the Encaptra cell delivery device that are expected to improve product performance.

However, the company plans to begin implanting patients with the full dose of PEC-01 cells in Cohort 2 of the PEC-Direct clinical trial, which we anticipate will begin later this year. ViaCyte’s goal is to demonstrate early evidence of efficacy in the first half of 2018 and definitive efficacy 6 to 12 months later.

PK: On I see 4 trials listed for you guysIn a nutshell, can you explain the differences between the 4 trials? Also what’s different between VC-01 and VC-02? (editor’s note: see image at left)

PL: ViaCyte is currently developing two product candidates, PEC-Encap (also known as VC-01) and PEC-Direct (also known as VC-02). Two of the four trials listed pertain to the PEC-Encap product candidate: one is the STEP ONE clinical trial evaluating safety and efficacy of PEC-Encap, and the other is simply a follow-up study for patients that have previously received PEC-Encap. The other two listings pertain to the trial evaluating safety and efficacy of the PEC-Direct product candidate – for technical reasons the specifics of the PEC-Direct trial are slightly different in the US and Canada and therefore they have separate listings on

Both product candidates use the same human pancreatic progenitor cells, called PEC-01 cells. In both products, if all goes as expected, PEC-01 cells will mature into endocrine cells of the pancreatic islets including glucose-responsive insulin-producing beta cells. The difference between the two products relates to the cell delivery device used.

PEC-Encap uses the Encaptra Cell Delivery System which is designed to protect the cells from the patient’s adaptive immune system. PEC-Encap prevents interaction between the implanted cells and the patient’s cells. PEC-Encap relies on vascularization of the surface of the device – blood vessels are unable to enter the device – and diffusion. Its function is more susceptible to what is called a foreign body response which is a natural response to the device component of the combination product. This is what makes PEC-Encap a more challenging product candidate to develop.

PEC-Direct is also delivered in a pouch-like device, however, the PEC-Direct delivery device is engineered in a way that allows the patient’s blood vessels to grow into the device and contact the cells directly. This is designed to promote very robust engraftment. We engineered ports into PEC-Direct membrane to allow for the vascularization. Ports are sized in a very specific manner. The average size of the aggregates of cells inside the device are larger than the port size, but the size still allows for the patient vasculature to grow into the device. However, due to the open nature of the device, patients require immunosuppression to maintain the viability of the implanted cells, not unlike protecting cadaver islet transplant or an organ transplant. The PEC-Direct product is being developed for T1D patients who are at risk for severe, near term complications, including patients with hypoglycemia unawareness, extreme glycemic lability, and/or severe hypoglycemic episodes.

To summarize, both PEC-Direct and PEC-Encap product candidates are being designed as subcutaneous implants and both contain the PEC-01 pancreatic progenitor cells as the active ingredient that is expected to mature into the cells that provide the therapeutic effect – regulation of blood glucose by release of insulin and other endocrine hormones. The main difference between the two product candidates is the nature of the device that will be used to contain the PEC-01 cells.

PK: It’s been just about a year since you acquired the BetaLogics assets. How has that impacted ViaCyte?

PL: The addition of BetaLogics intellectual property, know-how, and other assets has strengthened ViaCyte’s position as the leader in the field of islet cell replacement therapies. This acquisition enhanced ViaCyte’s already robust intellectual property position with 500 patents worldwide (more than 100 in the U.S.) and more than 800 pending applications covering the technology including designs of delivery devices, and compositions and methods for human pluripotent stem (hPS) cells, and their differentiation to multiple cell types that have potential application for the treatment of many diseases. In addition, five members of the BetaLogics team have been seconded to ViaCyte and are important contributors in our efforts to deliver a cure for T1D.

PK: What’s the technical connection with the Gore firm that makes Gore-Tex?

PL: The goal of the research agreement with W.L. Gore & Associates is to cooperatively establish new methods of effectively delivering cell therapies, specifically with improvements in the Encaptra Cell Delivery System used in PEC-Encap. The semipermeable membrane that is a key component of the Encaptra device is made of the same material that makes up Gore-Tex. The Gore team are the world’s leading experts for manipulating and engineering this material.

Gore has expertise in medical device development and drug delivery technologies, as well as previous research and development experience on cell encapsulation and implant programs for diabetes. Gore’s contribution to the material and design improvements of the Encaptra Cell Delivery System is expected to support the reliable and robust long-term engraftment that is required for the PEC-Encap product to be most effective.

Gore’s participation in ViaCyte’s financing announced in May 2017 represents another external validation of the company and its technologies. It also reflects Gore’s great interest in, and commitment to, the development of a successful implantable cell therapy for all patients with diabetes who use insulin.

PK: How are the company’s finances?

PL: It is an exciting time for ViaCyte but also a time that does require capital to bring this to market. So you can imagine that raising money is always part of our process, but we have not disclosed specifics.

We were very pleased to be awarded an additional $20 million from CIRM grant to support the clinical development of PEC-Direct for patients with high-risk type 1 diabetes. In addition to the tremendous financial support, this CIRM grant announced in September, as well as additional funding from JDRF announced in May 2017, represents important external validation of our team, approach, and technologies. Our funding comes from multiple sources including venture capital, grants, partnerships, and other sources. We are especially grateful to our current investors, as well as CIRM and JDRF, for their support.

PK: Any plans to go public in the next few years with an IPO?

PL: We cannot discuss specifics, but we are considering all our financing options.

PK: How will the new CIRM grant impact coming years?

PL: The CIRM grant supports the clinical development of ViaCyte’s PEC-Direct product candidate. This novel cell replacement therapy is being developed as a functional cure for patients with type 1 diabetes who are at high risk for acute life-threatening complications. PEC-Direct is currently in a Phase 1/2 open-label clinical trial at multiple sites in the United States and Canada to evaluate safety and efficacy. CIRM previously provided support for the preclinical studies that laid the critical groundwork for the present clinical evaluation of the PEC-Direct product.

Currently, the first cohort of type 1 diabetes patients is receiving multiple sentinels in order to evaluate safety and implant viability. These sentinel units will be removed at specific time points and examined histologically to provide early insight into the progression of engraftment and maturation into pancreatic islet cells including insulin-producing beta cells. Later this year, a second cohort of up to 40 patients is expected to begin enrolling to evaluate both safety and efficacy. The primary efficacy measurement in the trial will be the clinically relevant production of insulin, as measured by the insulin biomarker C-peptide, in a patient population that has little to no ability to produce endogenous insulin at the time of enrollment. Other important endpoints will be evaluated including injectable insulin usage and the incidence of hypoglycemic events. ViaCyte’s goal is to demonstrate early evidence of efficacy in the first half of 2018 and definitive efficacy 6 to 12 months later.

PK: Where do you see ViaCyte in 2-3 years?

PL: Near term, as the PEC-Direct clinical trial advances into Cohort 2, full enrollment is expected in the second half of 2018 with evaluation of efficacy about 6 months later. The primary efficacy endpoint is clinically relevant insulin production, as measured by C-peptide 6 months after implantation. While the efficacy analysis is expected to occur in 2019, patients will remain in the study for two years, thus the expected completion date for the Phase 1/2 study is December 2020.

At ViaCyte, our mission is to profoundly improve the lives of people with type 1 diabetes. To accomplish that, we have become leaders and pioneers in many areas, breaking new ground in stem cell research and medical device engineering, and developing brand new methods of cell therapy scaling and manufacturing. Over the next few years we plan to continue striving towards that mission in hopes of one day providing a “functional cure” for type 1 diabetes.

Disclosure from PK: I have no financial interest in ViaCyte.


  1. I’ve been following this since its inception. It’s just sinking in that it is totally private, so no NIH funding or other research partners. This seems an obstacle to progress and terrible shame.

  2. The company has had NIH funding, and also has funding from JDRF. I’m afraid that if they’d brought in venture capital funding their therapy would be on a shelf at a pharma company that sells insulin – good for the investors in Viacyte, but bad for the patients. Therapeutic development shouldn’t be a cutthroat business, but it is.
    CIRM funding is a rare gift to patients suffering from incurable disease. They fund research groups that are developing therapies using stem cells. They’re funding me to develop an effective treatment for Parkinson’s disease. There is no other support like CIRM – their specific mission is development of therapies like Viacyte’s…and mine.

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