Vertex spends nearly $1bn on Semma's unproven diabetes cell tech

Having succeeded with cystic fibrosis Vertex is now chasing a cure for type 1 diabetes.

Semma Therapeutics might count Medtronic and Novartis among its venture investors, but it is Vertex Pharmaceuticals that has managed to acquire it. And the price, $950m cash, is all the more remarkable since Semma’s technology has still not yet started clinical trials. 

It is now up to Vertex to make a success of the group’s technology, which involves using a device to allow the implantation of pancreatic islet cells in the hope of curing type 1 diabetes. With everything still to prove, the immediate winners of this deal are Semma’s early investors. 

Semma claims to have found a way of growing stem-cell derived islets that are capable of sensing glucose levels and releasing insulin in response. The cells are to be put into a device that is then implanted, the idea being that the device prevents the patient’s immune system from killing the cells. 

Pigs might fly

So far the animals data mostly concern transplantation of the cells alone. In July Semma reported results with the cell-device combo in a grand total of two pigs, where it provided immunoprotection and secreted insulin in response to stimulation. 

But Vertex is taking quite a chance – not least because the omens for this kind of technology are not great. The only group to have reached the clinic with a similar approach, Viacyte, has had extremely mixed results (Regenerating insulin-producing cells the next big thing in diabetes, August 6, 2018).

And the Canadian group Sernova reported data on a single patient in its phase I/II trial of Cell Pouch, a device encapsulating islet cells, in July. The product boosted glucose-stimulated blood levels of C-peptide and insulin, and caused an 87.5% reduction in hypoglycaemic events from baseline over two weeks. But this project necessitates immunosuppression in spite of the use of a device.

Selected cell-device combo therapies in development for type 1 diabetes
Company Product Phase
Viacyte Pec-Direct/VC-02  Phase I/II
  PEC-Encap/VC-01 Phase I/II
Sernova Cellpouch Phase I/II
Semma Therapeutics Type 1 diabetes programme Preclinical
Source: EvaluatePharma.

When Semma raised its $44m series A round in the spring of 2015 its then chief executive, Robert Millman, told Vantage the cash would get it to proof-of-concept human data. It has since raised a $144m series B and seems no closer to the clinic.

Semma’s tech is scheduled to enter human testing in the first half of next year, with a clinical trial in patients with difficult to treat diabetes and hypoglycaemia unawareness, though it is not clear whether this will involve the cell-device combo or the cells alone. In the second half of 2020 Semma intends to start a second clinical trial for the broader adult type 1 diabetes population using its islet cells inside the encapsulating device and without immunosuppression.

The Semma deal is not the first direction pivot Vertex has executed through M&A. In July, the group moved into the increasingly crowded area of Duchenne’s muscular dystrophy via the $245m up-front purchase of Exonics Therapeutics, a private gene editing business, and a $175m technology licence from Crispr Therapeutics (Vertex’s second transformation: Duchenne time, June 7, 2019).

Exonics, like Semma, has yet to start human trials with its assets. But at least that deal was a quarter of the size of the Semma purchase.

Semma's VC backing
Date Round Investment ($m) Investors
Nov 30, 2017 Series B 114 Eight Roads Ventures; Cowen; Medtronic; Novartis; JDRF; 6 Dimensions Capital; Arch Venture Partners; F-Prime Capital; MPM Capital; ORI Healthcare Fund; Sinopharm Capital; Wu Capital
Mar 24, 2015 Series A 44 MPM Capital; Medtronic; Arch Venture Partners; F-Prime Capital
  Total 158  
Source: EvaluatePharma.

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