Washington Editor

ViaCell Inc.'s stock gained almost 20 percent on news of a diabetes partnership with a familiar collaborator, Genzyme Corp., coupled with a related patent issuance.

"Diabetes is a major disease where we believe stem cell therapy is one of the therapeutic modalities that shows promise," Chris Adams, ViaCell's senior vice president of business development, told BioWorld Today. "We believe that working with the best companies in the biotechnology sector is one of the goals that cell therapy companies aspire to."

The companies, both based in Cambridge, Mass., already had a long-standing relationship. Terms of the agreement call for ViaCell to conduct preclinical studies designed to complement Genzyme's work, which will include 18 months of research to improve production and characterization of islet stem cells, as well as preclinical proof-of-concept studies for the transplantation of adult islet stem cells derived from donated pancreatic tissue.

"We're both working on different aspects of getting proof of concept in an animal model," Adams said. "Genzyme's experience in cell therapy and preclinical work is what we're expecting them to deliver to the program."

ViaCell's diabetes program uses nestin-positive pancreatic stem cells, and to date, the company has expanded and differentiated those cells and they have shown the ability to produce insulin in mouse models of diabetes. The newly awarded patent, the first issuance from an intellectual property portfolio exclusively licensed from the Massachusetts General Hospital in Boston, covers methods for treating Type I insulin-dependent diabetes mellitus and other conditions with nestin-positive islet-derived progenitor cells, which can be expanded and differentiated into pancreatic islet cells such as insulin-producing beta cells.

In the deal, ViaCell agreed to provide islet stem cells to Genzyme, which holds stock in ViaCell. Though specific financial terms were not disclosed, Genzyme gained a right of first negotiation to enter a more specific agreement in diseases and disorders of glucose metabolism or insulin insufficiency, including diabetes, using the results of the Genzyme research. Should the companies decide against furthering the research, various provisions worked into the deal preclude either firm from entering other agreements in the same area until certain time periods have elapsed.

ViaCell also continues to march forward in another partnered program: The product CB001 is in Phase I as a replacement for bone marrow and other crude cell mixtures used in hematopoietic stem cell transplants. The program is paired with Amgen Inc., of Thousand Oaks, Calif., which can opt into a joint venture development agreement based on future clinical data.

On its own, ViaCell also is conducting animal model testing of a cord blood-derived stem cell for acute myocardial infarction. The company also markets its Viacord umbilical cord blood preservation product, which is used primarily for pediatric bone marrow transplants.

ViaCell completed a $52.5 million initial public offering earlier this year and on Tuesday, its shares (NASDAQ:VIAC) gained $1.45 to close at $8.75. Genzyme's stock (NASDAQ:GENZ) traded down 61 cents to $57.27. (See BioWorld Today, Jan. 24, 2005.)