San Diego's Viacyte Scoring Again with State Funding; Total Now Hits $55 Million

California’s stem cell research agency appears ready to pump another $16.6 million into a diabetes therapy effort that has already received $38.5 million from the Golden State.

At a total of more than $55 million, it is likely the single largest direct investment that the state of California has ever made in a business. The cash is expected to be approved by directors of the $3 billion stem cell agency at their meeting Wednesday in Berkeley.

The agency has a policy of secrecy concerning the names of those seeking public money and did not identify the firm.  However, it was apparent from documents on the Web site of the California Institute for Regenerative Medicine (CIRM), as the agency is known, that the recipient is Viacyte, Inc., of San Diego, Ca. The firm is the most heavily backed business by the stem cell agency. Second is Capricor, Inc., of Beverly Hills, Ca., at $19.8 million.

Viacyte is working on a diabetes treatment that it has described as a “virtual cure” for type 1 diabetes. The company describes the device as akin to a “flat tea bag” that would be implanted beneath the skin.

Last month, the firm announced it had received $20 million (see here and here) from Janssen Pharmaceuticals, a subsidiary of Johnson and Johnson. Viacyte also last month announced it has received a federal go-ahead to begin a clinical trial for its human embryonic stem cell treatment.

Only about one out 10 traditional drugs emerge into the marketplace from clinical trials. No therapies involving human embryonic stem cells (hESC) have successfully run the clinical trial gauntlet in the U.S. and secured approval for widespread use.

This week’s funding for Viacyte involves two awards in application AP1-08039 in the agency’s new, $200 million “accelerated development pathway,” which is designed to speed research into the clinic and marketplace. The agency’s blue-ribbon reviewers examined the application behind closed doors last spring but said in a summary posted publicly last week that the therapy had the potential to “transform” diabetes treatments.

More than two million persons suffer from diabetes in the California and roughly 370 million worldwide.

Only four other applicants were considered in the “pathway” round. Viacyte was the only business. The other applications came from Henry Klassen at UC Irvine, Thomas Kipps of UC San Diego, Donald Kohn of UCLA and Clive Svendsen of Cedars of Sinai. All the institutions have representatives on the CIRM board of directors, but were rejected by reviewers.  As mentioned above, none was identified by the agency but all could be recognized by other means.

All of the agency’s comments and summary of reviewer comments can be found on this document. Klassen’s application is DR2A-05379. Kipps’ application is AP1-08043.  Svendsen’s application is AP1-08047. Kohn’s application is AP1-08048.

  

Rejected applicants will have an opportunity to apply again in later offerings in the $200 million acceleration pathway program, which is aimed at producing major scientific results by 2017.

Viacyte had applied for $25 million, the upper limit in this week’s awards. However, the reviewers rejected two “modules” in the application worth $8.4 million, suggesting that they were not timely and could be reworked incorporating reviewer suggestions.