Memorandum

ViaCyte awarded $16.6 million CIRM grant to accelerate development of type 1 cell replacement therapy - September 25, 2014

ViaCyte recently announced that it has been awarded a $16.6 million Accelerated Development Pathway Award from the California Institute for Regenerative Medicine (CIRM) to accelerate development of VC-01, the company’s stem cell-derived islet replacement therapy for type 1 diabetes (pancreatic progenitor cells encapsulated in an immune protective device, implanted under the skin ). This news is the latest in a string of quite positive developments for ViaCyte over the last couple of months – the FDA accepted the company’s Investigational New Drug Application (IND) for VC-01 on August 19, and later that week ViaCyte announced an agreement with Janssen: in exchange for a $20 million payment to ViaCyte to help accelerate clinical development of VC-01, Janssen obtained future rights to evaluate a transaction related to the product. ViaCyte has received significant funding ($40 million) from the CIRM in the past, and the JDRF has also contributed over $15 million in the last decade. The JDRF has highly publicized ViaCyte’s recent updates, putting out its own press releases following the IND filing and the IND acceptance. The latest round of funding will support the recently initiated phase 1/2 trial (ClinicalTrials.gov Identifier: NCT02239354) evaluating the safety and efficacy of VC-01 in six to eight patients with type 1 diabetes; the trial is currently recruiting participants and has an expected primary completion date of August 2017. Although cell-based therapies for type 1 diabetes have seen their share of promise and disappointment, these significant infusions of funding at such an early stage along with Janssen’s expertise give us reason to be quite hopeful – as well, some major KOLs who are usually pretty conservative have been talking it up in hallway chatter at meetings. See our report on the Janssen agreement for more background on VC-01 and the pertinent questions we believe ViaCyte must answer in its ongoing clinical trial.