Vertex Pharmaceuticals Acquires Semma Therapeutics for $950 Million to Advance Breakthrough Cell Therapy for Type 1 Diabetes

At 8:00 a.m. Eastern Time on September 3, Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) and Semma Therapeutics announced that the two companies had entered into a definitive acquisition agreement, under which Vertex will acquire Semma Therapeutics for $950 million in cash. This marks the largest all-cash acquisition of a preclinical-stage biotechnology company in U.S. history.

Semma is Shuanghu Capital’s first direct investment in a biopharmaceutical company in the United States, with the investment completed in November 2017. “We are honored to have been an early investor in Semma, supporting its exploration and application of cutting-edge technological innovations. Semma’s technology holds significant potential value for the treatment of diabetes in humans, and we look forward to its continued innovation and breakthroughs following its integration into Vertex,” said Shuanghu Capital.

Semma Therapeutics is a biotechnology company founded in 2015 by Dr. Douglas Melton of the Harvard Stem Cell Institute. Headquartered in Cambridge, Massachusetts, the company is dedicated to developing stem cell therapies for patients with Type 1 diabetes who currently rely on insulin injections, positioning itself as a pioneer in cellular therapy within the novel therapeutic landscape. Dr. Melton’s research has enabled the production of billions of functional, insulin-producing pancreatic beta cells from stem cells. Semma Therapeutics combines these proprietary cells with state-of-the-art cell delivery and immune protection strategies to shield them from the patient’s immune system, allowing the pancreatic beta cells to function as they would in non-diabetic individuals. If successful, these innovative products will cure patients born with insulin-dependent diabetes, rather than merely treating symptoms. Semma recently announced that it had achieved preclinical proof-of-concept for its two leading programs, based on data from testing human stem cell-derived islets (SC-islets) in non-human primate and porcine models of Type 1 diabetes. These findings were presented at the plenary session of the International Society for Stem Cell Research (ISSCR) in June 2019. In May 2018, Semma appointed Dr. Bastiano Sanna as Chief Executive Officer and President. Dr. Sanna brings extensive expertise and industry experience to the role. Prior to joining Semma, he served as Chief Operating Officer at Magenta Therapeutics, where he was responsible for operations, finance, clinical development, and project management. Magenta was founded in November 2016 and completed its initial public offering (IPO) in June 2018. Before joining Magenta, Dr. Sanna held global program leadership roles for stem cell transplantation and early-stage projects within Novartis Pharmaceuticals’ Gene Therapy Unit leadership team. Previously, he also served as the Global Head of Strategic Planning and Portfolio Management at the Novartis Institutes for BioMedical Research.

In August 2019, Dr. Bastiano Sanna made a special trip to Beijing to attend the Shuanghu Think Tank Medical Innovation Seminar hosted by Shuanghu Capital, where participants jointly explored technological innovations in the field of diabetes. Dr. Sanna shared Semma Therapeutics’ latest advancements in the production of pancreatic beta cells and the development of in vitro encapsulation devices, earning high praise from attendees. Meanwhile, the company’s cutting-edge technology and innovative capabilities also received strong recognition from the capital market, leading to an acquisition agreement within a very short period.

 SSemma Therapeutics CEO Dr. Bastiano Sanna

Upon completion of the acquisition, Semma will become an independently operated subsidiary of Vertex, and Dr. Sanna will join Vertex as President of Semma. Additionally, Dr. Melton will continue to serve as Chairman of Semma’s Scientific Advisory Board, providing oversight and guidance for the program’s research and development.

Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases. Founded in 1989 with an initial capital of $10 million, the company has emerged as a dark horse in the pharmaceutical industry, which is dominated by established giants. It has developed three drugs with annual sales exceeding $1 billion each, and its market capitalization first reached $45 billion in May 2018, placing it among the top 25 pharmaceutical companies worldwide by market value.

“This acquisition aligns perfectly with our strategy of investing in scientific innovation to create transformative medicines for people suffering from serious diseases,” said Dr. Jeffrey Leiden, Chairman, President, and Chief Executive Officer of Vertex. “We are excited to join forces with Semma’s talented scientists, who have made significant progress in developing effective and potentially curative cell therapy treatments for patients with type 1 diabetes. We see a tremendous opportunity to change the treatment paradigm for type 1 diabetes, a condition of particular concern to endocrinologists, both by advancing the development and manufacturing of the cells themselves and through highly innovative cell combinations.”

“Type 1 diabetes is a disease that affects millions of people worldwide, and there is no available cure,” said Dr. Bastiano Sanna, President and Chief Executive Officer of Semma. “Vertex has a strong track record of continuous innovation and is committed to developing transformative therapies for patients in need. As part of Vertex, the Semma team will rapidly and effectively advance our cell therapy and delivery approaches to meet patient needs.”

“Semma was founded to significantly improve the lives of patients with type 1 diabetes,” said Dr. Douglas Melton, Founding Scientist at Semma. “Vertex is ideally positioned to accelerate the realization of this goal.”