Privately held Viacyte Inc., of San Diego, has closed on about $27 million in private funding, the remainder of its $80 million series D stock financing from late 2018. With investors increasingly returning while COVID-19 remains a health and business factor, the closing was a satisfying relief to Paul Laikind, Viacyte’s president and CEO.

“These are major investors, for them step up and do the next tranche, they didn’t have to do that,” Laikind told BioWorld.

“Conditions made it more of a nail biter. To get it done in the middle of a pandemic shows how exciting what we’re doing is and it shows the strength and commitment of our investors.”

Those investors included Bain Capital Life Sciences, TPG Capital, RA Capital Management, Sanderling Ventures and several individual supporters.

With the funding, the company, developing allogeneic cell replacement therapies for people with diabetes, plans to move three programs forward. The first program, PEC-Direct, has shown when the implanted cells are effectively engrafted they produce insulin, as measured by circulating C-peptide, while PEC-Encap uses an encapsulated delivery of implanted cells and PEC-QT, a collaboration with Crispr Therapeutics AG, is based on an immune-evasive stem cell line.

All the programs use pancreatic progenitor cells and are designed to allow the cells to further mature and produce insulin as measured by circulating C-peptide. PEC-QT uses an immune-evasive version of the cells.

The company has three clinical trials underway, though the pandemic has slowed some progress.

“The trials are still ongoing, but we’ve been unable to enroll or bring patients into clinic,” Laikind said. “It’s hard to predict exactly when that will restart, but we’re seeing light at the end of the tunnel. The principal investors are anxious to resume trials, medical centers are opening up, so we’ll see.”

PEC-Direct (VC-02) is in a phase I/II study using PEC-01 cells that are loaded into a delivery device to test its safety, tolerability and efficacy in subjects with type 1 diabetes mellitus and hypoglycemia unawareness. There are two cohorts in the study, with the first designed for up to 15 subjects and the second with an additional 60 patients. The interventional, non-randomized, sequential assignment uses a pouch to allow blood vessels to directly enter it and interact with implanted PEC-01 cells. Immune suppression therapy is part of the study because the implanted cells are not hidden from the immune system, so it’s used only for patients with high-risk type 1 diabetes. The primary outcome measures are the incidence of all adverse events reported for cohort one patients through month four and the change in C-peptide for cohort two subjects from baseline to month six.

PEC-Encap (VC-01) is also in a phase I/II study using a pouch to fully contain implanted cells, designed to allow nutrients and proteins such as oxygen, glucose, insulin and other hormones to travel between cells inside the device and the blood vessels, which grow outside the device. The study of adult patients with type 1 diabetes mellitus is a prospective, multicenter, open-label trial with two cohorts, the first with two VC-01 combination product implants and the second with four or six VC-01 combination product implants. The primary outcome measures are the incidence of all adverse events reported through the month 24 visit and the change in C-peptide from baseline to month six. There is also a one-year follow-up safety study for an estimated 200 subjects previously implanted with VC-01.

“We have started to get early data that says we’re on the right track with PEC-Encap,” Laikind said.

For PEC-QT (VCTX-210), Viacyte teamed up with Crispr to develop immune-evasive stem cell lines from its CyT49 cell line, which is designed to broaden cell therapy availability for patients with insulin-requiring diabetes, type 1 and type 2, and potentially to eliminate the need for immunosuppressants. It also uses the pouch used in PEC-Direct. The collaboration is moving into pre-IND activities, Laikind said.

“Crispr upped both of our games,” Laikind said, saying the collaboration allows for ex vivo gene editing. “We’re still in preclinical studies, but it’s where the field will go eventually. We have a good head start.”

As the studies rev back up, Laikind said Viacyte has focused in the past couple of months on scaling up its manufacturing capacity while readying for more advanced clinical trials while staff works from home.

The company also made a change in the board, as Fred Middleton, who Laikind said helped build the company, left the executive chairman’s position but remains on the board. He is replaced by Ian F. Smith.

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