CRISPR Therapeutics and ViaCyte Announce Strategic Collaboration to Develop Gene-Edited Allogeneic Stem Cell Therapy for Diabetes

On the early morning of September 18, 2018, Switzerland-based CRISPR Therapeutics and US-based ViaCyte announced a strategic partnership. They will jointly develop allogeneic stem cell therapies for disease treatment. The deal is valued at up to $25 million, with ViaCyte and CRISPR Therapeutics collaborating on the development of allogeneic stem cell products for the treatment of diabetes.

Under the agreement, ViaCyte will receive a $15 million patent licensing fee, which CRISPR Therapeutics may elect to pay in either cash or stock. Additionally, ViaCyte may obtain an extra $10 million by accepting convertible promissory notes.

ViaCyte is a San Diego-based regenerative medicine company and currently a leader in the field. Most patients with diabetes manage their condition through insulin injections. The medical community has also attempted to achieve a cure by transplanting live pancreases, but outcomes have been modest due to immune rejection.

ViaCyte, meanwhile, has taken a novel approach by attempting, for the first time in human history, to construct a pancreatic cell device using human embryonic cells, aiming to treat diabetes with an artificially engineered “new pancreas.”

CRISPR Therapeutics, as one of the three major publicly listed companies in the CRISPR field (alongside Editas Medicine and Intellia Therapeutics), is dedicated to providing gene therapies for serious diseases.

The aim of this project is to leverage CRISPR-Cas9 to develop allogeneic stem cells capable of evading the immune system. ViaCyte’s candidate product is a stem cell-based islet cell replacement therapy. Its lead candidate, PEC-Direct, delivers ViaCyte’s PEC-01™ pancreatic progenitor cells directly into vascularized tissue via an implantable device. When used in conjunction with ongoing immunosuppressive therapy, PEC-Direct provides sustained functional treatment for patients with type 1 diabetes at high risk of acute, life-threatening complications.

In the week preceding the announcement, a federal court panel ruled in favor of the Broad Institute in a patent dispute with the University of California, Berkeley. Although the ruling did not definitively determine which institution first invented the CRISPR-Cas9 technology, it concluded that the Broad Institute was the first to secure the patent, thereby leaving the University of California, Berkeley, with little grounds for appeal.

Emmanuelle Charpentier, a co-founder of CRISPR Therapeutics, is from the University of California, Berkeley. She and Jennifer Doudna, one of the key figures in the CRISPR patent battle, once worked in the same laboratory.

After parting ways, both Doudna and Zhang Feng claimed to have invented CRISPR technology, with Doudna consistently acknowledging that she shares this honor with Charpentier. The licensing for CRISPR Therapeutics also originates from the University of California, Berkeley.

In addition to CRISPR Therapeutics, both Intellia Therapeutics and Caribou Biosciences have obtained technology licenses from the University of California, Berkeley, while Editas Medicine has secured a license from the Broad Institute.

However, based on last week’s performance, CRISPR Therapeutics, Intellia, and Editas were not significantly affected. Nevertheless, as of press time, CRISPR Therapeutics’ share price had dropped from an opening of $55.31 to $50.32, representing a 9.1% decline.