ViaCyte Q&A: CRISPR Tx quick progress, ongoing diabetes trial, & more

ViaCyte CEO Paul Laikind
ViaCyte CEO Paul Laikind.

ViaCyte is one of the most exciting stem cell and regenerative medicine biotech companies so I like to try to check in with them regularly.

Today’s post is my new interview with ViaCyte leader Paul Laikind on recent developments. We had a great chat about the science and how things are looking upbeat for the company, which is growing (a heads up for stem cell biologists who may be job hunting). You can read my previous interview with them from about a year ago here.

Before the interview, by way of introduction for those who might not know, San Diego-based ViaCyte is focused on using stem cell technologies to make transformative treatments for type 1 diabetes. They differentiate human embryonic stem cells (hESC; you can see an stained image of their CyT49 cells below) into pancreatic progenitors that then can mature collectively within a capsule into what I think of as a living blood sugar-sensing, insulin producing machine. The core idea is that such an encapsulated product, once implanted into diabetic patients, ultimately supplants the functions of lost beta cells.

They have clinical trial work ongoing and the longer-term objective is functional reversal of diabetes.

The function of the cellular products here once in the patient in part relates to the nature of the capsule. For their PEC-Direct product, the capsule is permeable, allowing for interaction between the pancreatic cells and the patient’s vasculature that grow in and can contact them. This leads to better function, but immune cells can enter as well and the product is allogeneic. Thus, this kind of approach requires either immunosuppression or a new approach such as the innovative effort by the company with CRISPR Therapeutics to make edited cells that will not be attacked by the host immune system. This gene editing-related product in development is called PEC-QT.

Cyt49 PSC for The Niche
ViaCyte’s CyT49 pluripotent stem cells (PSCs) stained for OCT4 in green and SSEA4 in red. Image source ViaCyte.

At present I see ViaCyte as the leader in this area, but there are others. Note that that until recently acquired by Vertex Pharmaceuticals, another small biotech player in this space was a firm called Semma founded by Doug Melton. Semma is focused on using actual pure human beta cells produced from pluripotent stem cells. Presumably Vertex is going to help move the Semma program forward faster, but we’ll see. Some folks were hopeful years ago when Astellas acquired ACT/Ocata that it would speed up their stem cell program for macular degeneration, but it’s been relatively slow going on that front for some years until recently when things seem to have picked up.

Here’s my Sept. 2019 ViaCyte interview, which is in part focused on data mentioned in a new abstract that they recently presented.

PK: How are things going with the CRISPR Therapeutics collaboration?

ViaCyte: We’re really excited about where we are on this collaboration with our colleagues at CRISPR. In less than a year, we are already reporting out on the first engineered version of our CyT49 pluripotent stem cell line.

PK: Related to the gene editing collaboration, why did you decide to do both B2M and PD-L1 genetic interventions on the PEC cells?

ViaCyte: The goal is to allow these cells to function without being recognized by the immune system as “foreign” and rejected. The current edits were chosen to both reduce the presentation of non-self antigens as well as put a pro-tolerance environment on the cell surface, related to potential T-cell response. There are other ways to accomplish our goal; we plan to construct and evaluate other lines with other edits. In fact, it is very possible that we will take more than one line into the clinic when the time comes.

PK: Just to follow up on that, is antibody response a concern?

ViaCyte: We don’t expect that antibody response will negatively impact the engineered cells.

PK: What about further validation of the gene-edited cells such as WGS?

ViaCyte: The team is doing both in silico and wet lab analyses of the genomes of the edited cells. This thorough analysis is being done by our colleagues at CRISPR. In fact, CRISPR has developed industry leading analytic capabilities, which is one of the reasons we are excited to be working with them.

PK: What about potential safety risks of this new approach, especially since the cells are designed to be immune stealthy?

ViaCyte: There are general risks related to the gene editing. However, an important advantage of the approach we are taking is the ability to thoroughly characterize and evaluate the cells before selection for further development.  Of course, when a candidate product is selected, we will do long-term safety studies before moving to the clinic. In addition, the implantation device, similar to the open device that we use for PEC-Direct, provides a significant safety advantage compared to implanting naked cells alone.  Based on what we have learned with PEC-Direct, we expect that the cells will remain in the device and can be removed if a problem developed In theory, given that the PEC-Direct device has ports that allow direct vascularization, the cells have an opportunity to leave potentially; however, in practice, we have not seen that. These are not migratory cells.

PK: So where do you see the PEC-QT pipeline and is it too early to define a timeline looking ahead?

ViaCyte: We are very excited about this project, and both teams are working hard but it’s too early to define the timeline for PEC-QT. Since we last spoke a year ago, the progress we’ve made with CRISPR Therapeutics has exceeded our expectations. In fact, while we aren’t projecting a timeline as of yet, I can tell you that the teams are already thinking about regulatory strategy and IND-enabling studies.

PK: Can you tell us more about the animal studies?

ViaCyte: We have ongoing animal studies that test two different aspects of the cells described in the abstract. These are (1) studies of beta cell function / glucose regulation in nude rats, and (2) studies of immuno-evasion in humanized mice (with a human immune system). Together, these are expected to provide us with insights regarding potential performance of the engineered cells for treating diabetes as well as information on the ability to avoid clearance by the host immune system.

PK: What about tumorigenicity studies?

ViaCyte: Tumorigenicity studies will be part of the IND-enabling studies in the future in immunodeficient rodents. As already noted, we believe the device component of the product also has the potential to mitigate that risk.

PK: Shifting gears, what’s the significance of your new data on circulating C-peptide in patients?

ViaCyte: In the open-label Phase 1/2 PEC-Direct trial, we are currently iterating to optimize the procedures and engraftment. We have extensive histological evidence in patients that, when our cells are effectively engrafted, they form islet tissue structures as expected in both sentinels and the larger dose-finding devices. In addition to the histological evidence, we now also have shown that the cells, again, when effectively engrafted, produce the insulin biomarker, C-peptide. An entry criterion for our trials are that patients are C-peptide negative. The importance of C-peptide is that it is only produced when insulin is made by beta cells; thus, it allows us to distinguish between insulin made by beta cells and insulin that has been injected by the patient. So, if we detect C-peptide in a patient that was unable to produce C-peptide when they entered the study, it shows that the implanted cells are able to differentiate and release insulin in response to elevated blood glucose.

PK: Switching gears again, what allowed for resumption of trial enrollment for the PEC-Encap clinical trial? What modifications were made to the capsule? 

ViaCyte: The PEC-Encap trial started about five years ago with sub-therapeutic dosing, primarily with sentinels, in 20 patients. Our goals were to show safety, to develop the procedures for implantation, and to evaluate the patient response to the implant. We 1) found it is safe and well-tolerated across those 20 patients, 2) showed that the Encaptra device protected the cells from the adaptive immune system, and 3) demonstrated that the cells performed as expected when engrafted. However, we also identified an aggressive foreign-body response to the device component of the combination product candidate, which was having a negative effect on engraftment. As we’ve discussed in the past, the capsule membrane is made of ePTFE, a medical grade plastic; the same material that underlies GORE-TEX. The world’s leading company when it comes to GORE-TEX is W.L Gore & Associates (Gore).  In addition, Gore is a major player in the implantable medical device area. We have been working closely with Gore to improve the membrane and reduce the foreign body response. We have screened more than 30 configurations using novel membranes, and we have identified several that appear to significantly reduce the impact of the foreign body response based on animal studies, demonstrating very good engraftment and effectiveness. One membrane was selected and moved through development into a new modified Encaptra device. We’re back into the clinic now, and patients are being implanted with PEC-Encap with the new membranes, currently with sentinels only. We’re about halfway enrolled. Over the next 6-12 months, we’ll look at results.

PK: Any reactions to the acquisition of Semma by Vertex?

ViaCyte: We were surprised and excited by the news. In our view, Semma is a good company following a path that we’ve been blazing. They are still a ways from the clinic. You learn a lot when you get to the clinic, so they have that in front of them. As a result of our early start and lead, we have a very strong intellectual property position, including nearly 600 patents. The fact that Vertex paid almost a billion up front really shows the excitement about the field of regenerative medicine and cell therapy. It also comes on heals of the BlueRock Therapeutics acquisition. Clearly, Biopharma and Big Bio are very interested in this space.

PK: How are ViaCyte’s financials? Any chance of an IPO?

ViaCyte: At the end of last year we secured about $105 million in financing. We had an $80 million Series D financing led by Bain Capital Life Sciences and joined by TPG and RA Capital Management, as well as existing investor, Sanderling Ventures. Around the same time, we announced strategic collaborations and transactions with W.L. Gore and Associates and CRISPR Therapeutics, which brought the total to more than $100 million of new. Typical of a biotechnology company, we are always thinking about the next round of financing.

PK: Any new non-diabetes research planned?

ViaCyte: Our main focus currently is insulin-requiring diabetes — to deliver a transformative, even curative product for a patient population in dire need of a new approach. The work that was announced at EASD 2019, the immune evasive version of our CyT49 pluripotent stem cell line, opens up many additional applications. Theoretically, a pluripotent stem cell could be used to make any cell in the body.  Thus, if we are successful at producing an immune evasive pluripotent line, it opens up a lot of different opportunities for the future.

PK: What does the future look like?

ViaCyte: We’re stronger than we’ve ever been. The data suggests we’re moving in the right direction, and we are growing. In fact, we’re getting ready in a month or so to open a second facility in San Diego…more on that soon.

PK: So you’ve been expanding your team?

ViaCyte: The recent financing gave us an opportunity to build the team further. We’re building our team on all aspects. We’re growing and expect to continue.

Disclosure: I have no financial interest in ViaCyte nor any other stem cell biotech.

9 thoughts on “ViaCyte Q&A: CRISPR Tx quick progress, ongoing diabetes trial, & more”

  1. I could not agree more. As a grandfather of a type 1 young boy I am extremely optimistic and hopeful . I know just enough to know how incredibly challenging finding a functional cure must really be. I wish ViaCyte and JDRF and all others working so hard to make progress all the luck in the world.

    Keep up the effort !

  2. If you know anyone struggling with T1 you won’t voice any concerns about where the money comes from only that’s it’s used to move this study forward. I applaud everyone engaged on this journey and pray the path to success remains open and without any distractions. Turing Type ONE into TYPE NONE should be everyone’s #1 hope.

  3. Hi Bill-
    Let me add some thoughts to this conversation. Controls are required by the FDA, but usually not until the Phase 2 study. The first clinical phase, Phase 1, is a straightforward safety study…the best outcome is that the treated person has no bad effects from the therapy. Phase 2 is designed to determine whether the product is effective at treating the disease. Whether a control is necessary or not is dependent on what is being measured in the patient. For the Viacyte trial, the patients being treated make no C-peptide. If C-peptide is detected it means that the stem cell-derived beta cells are working. The reason for controls is to make sure that the improvement is not due to a placebo effect. I know that people talk about a placebo effect all the time, but it’s real in many cases- people feel better because they think that the treatment was effective- that they walk more, feel less depressed. I found this report interesting:

  4. The government (CIRM) has given ViaCyte over $70 million. Are California taxpayers going to get that money back after ViaCyte goes public? Why is the government providing venture capital to fund a private company’s R&D? What a great business model for ViaCyte! ViaCyte’s first phase 1 safety trial was 6 months long and treated only 3 patients. Any problems with that? Their current phase 1/2 trial is open label with no control group. Are you going to take them to task for this or do they get a pass?

    1. I don’t know the specifics but I’d assume CIRM and ViaCyte have an agreement where the state of California will greatly benefit if the company’s products supported by CIRM research $$ are successful.

      There’s nothing inherently wrong with very small early clinical studies as long as they aren’t hyped (and patients don’t have to pay to enroll, etc.) and I see the goal there as mainly to better understand the investigational product. Also, the rationale for the study is backed up by pre-clinical animal studies and solid data.

      By contrast I do have a problem small for-profit purported “studies” by clinics and even with IND-based trials (and of course unproven clinics) that require large patient payments just for enrollment and/or that are already characterized as likely known to be effective and safe to potential enrollees even though the product is still investigational.

      1. Private companies should not have their R&D funded by the government. They should fund it themselves. It’s a pretty sweet deal that the company profits greatly if their product works but they don’t have to assume any risk if it doesn’t since they are government funded.

        My question is why don’t you criticize ViaCyte for running a phase I/II clinical trial without a control group in the same fashion that you have recently criticized other companies for doing the exact same thing? Why is it ok for ViaCyte to do it but not other companies? This question has nothing to do with subjects contributing to a trial’s funding or not.

        1. No, the context and goals matter big time.

          If your goal is to start the ball rolling to understand your investigational product’s behavior and get some early indication of safety in humans, a few patients will get the job done at the beginning. If you are a legit biotech, you also have every intention of doing larger, controlled, and blinded studies down the road.

          If, however, the goal is instead to promote your already marketed unproven product then the small “study” may be more about PR than science. And you’re probably going to use the study in marketing to more potential customers. You probably also frankly have zero intention of ever doing a larger, controlled, blinded study. You’re also forcing patients to fund your “study” and probably profiting just from that patient enrollment.

          That’s a whole different situation overall.

          1. So, again my question goes unanswered. Why is it ok for ViaCyte to do a phase I/II study with no controls when, according to you, it is not ok for other companies to do the exact same thing? Looks like a double standard to me.

            By the way, it’s easy to be a “legit” biotech company when the government is funding the company and assuming all the risk by giving it $70+ million dollars.

    2. Almost all new technologies and tech companies, and indeed new industries (think internet) are funded by the government in their early stage. VC and other private funds only play a role later when the technology has advanced to a stage where it appears commercially viable. Those providing private capital are generally risk adverse and fund only those things that will provide a very large ROI. In a number of foreign countries, such as Germany, a government bank often plays the role of early stage funding of new technologies. For their investment, the German state bank has equity in the venture. A problem in the US is that corporate income taxes and capital gains have been drastically lowered from the high levels that were in place back in our heyday of technological achievement during the 1950s – 1980s. Therefore, the till is draining and US government funds for new technologies is suffering. China understands and has adopted the pre-Reagan era US playbook of their government funding technologies and businesses. Luckily, progressive states such as California fund our universities (e,g, Berkeley created the 3-Dimensional transistor that Intel uses) and create our own funding mechanisms, such as CIRM, to fill the void. Here in San Diego, government funding (SBIR) was necessary in creating our largest private sector employer, Qualcomm (its founder was a public sector, university professor at UCSD, Dr. Irwin Jacobs). An easy to understand treatise on this subject is presented by Prof. Dr. Mariana Mazzucato of University College London in her two books, “The Entrepreneurial State: Debunking Public vs. Private Sector Myths,” and “The Value of Everything: Making and Taking in the Global Economy” (please don’t buy them at Amazon).

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