Wednesday, December 05, 2012

Collapse of Big Pharma Deal Involving California Stem Cell Agency

A ballyhooed deal has blown apart that would have hooked up – for the first time – Big Pharma and the $3 billion California stem cell agency.

The breakdown of the arrangement was quietly disclosed yesterday in background material prepared for the Dec. 12 meeting of the stem cell agency's governing board.

The deal was first announced Oct. 25 when Viacyte, Inc., of San Diego, received a $10.1 million award to help finance a clinical trial for a diabetes treatment involving Viacyte and GlaxoSmithKline.

The CIRM background memo said this week, however,
“We have recently been informed that GSK was not able to obtain the final approval required due to business reasons in the context of GSK's overall research and development portfolio and investment needs and not as a result of any scientific or technical assessment of ViaCyte's program.”
The memo gave no further details about the Glaxo decision.

CIRM staff proposed that Viacyte, which has received $36 million from CIRM, be given another $3 million because Glaxo has exited the trial.

The arrangement involving Glaxo, Viacyte and CIRM was trumpeted in October, when Viacyte was awarded the $10 million. Officials of the stem cell agency said the award was a “watershed” for CIRM. Jason Gardner, head of the Glaxo stem cell unit and who attended the meeting, told the California Stem Cell Report that the arrangement was a partnership and that the company intended to develop a sustainable pipeline.

It was the second significant business-connected deal that has collapsed for the $3 billion agency within the last 13 months. In November 2011, Geron abandoned its clinical trial for spinal injuries. CIRM had loaned Geron $25 million for the trial just three months earlier. The company paid the money back with interest.

CIRM staff said that advisors to the agency remain “extremely positive” about the Viacyte research and “strongly recommended” that the company receive the additional $3 million. The memo said that trial has a “strong potential” to be commercialized.

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