ViaCyte has developed a stem cell-derived therapy that combines insulin-producing cells with a biocompatible immunoprotective device in hopes of delivering a functional cure for people with insulin-dependent diabetes. ViaCyte’s President and CEO Paul Laikind, PhD, explains how this unique therapy works and where the company is in the development process.

By: John Parkinson, Clinical Content Coordinator,

One of the most exciting areas within type 1 research is stem cell therapy. The idea of being able to take pluripotent or human embryonic cells, drive their differentiation to a collection of pancreatic precursor cells, implant them into patients, and have them evolve into beta cells would be a revolutionary breakthrough for treatment of people with insulin-dependent diabetes.  

San Diego-based ViaCyte has been aiming to do just that with its combination stem cell-derived product and delivery system. Their therapeutic system is called VC-01, and it’s made up of two components: its stem cell-derived PEC-01, which according to ViaCyte is “a proprietary pancreatic endoderm cell product derived through directed differentiation of an inexhaustible human embryonic stem cell line;” and their Encaptra drug delivery system, which is an “immune-protecting and retrievable medical encapsulation device.” [Editor's note: check out our slideshow on ViaCyte's technology here.]

The PEC-01 pancreatic precursor cells are infused into the Encaptra device, together comprising VC-01, which is then implanted into a patient, just under the skin. The PEC-01 cells are designed to transform into insulin-producing cells, which will deliver natural human insulin in a glucose-responsive manner. The Encaptra medical device is designed to protect these cells, eliminating the need for patients to maintain a continuous regimen of immunosuppression drugs.

Obviously, this could have huge ramifications for the type 1 community, and Dr. Paul Laikind (pictured above) believes people with type 2 who use insulin could potentially benefit from this technology as well.

Laikind has had a long, illustrious career in biotechnology and the life sciences industry. Prior to coming to ViaCyte, he co-founded three companies: Gensia Pharmaceuticals, Viagene, and Metabasis Therapeutics. At both Viagene and Gensia, Laikind helped to create the technology upon which the companies were founded. Prior to joining ViaCyte, he served as Chief Business Officer and Senior Vice President of Business Development at the Sanford-Burnham Medical Research Institute.

Laikind says both the people involved with ViaCyte and the emerging technology they were working on are what attracted him to ViaCyte.

The company has carried out extensive animal studies, and was recently approved to begin a human clinical trial with VC-01. This trial was recently initiated at the University of California San Diego’s Sanford Stem Cell Clinical Center.

While it could be years before VC-01 is FDA approved, Laikind says the clinical efficacy end point of insulin production will be evaluated in this first human trial and could shed light on the real potential of this exciting new approach for managing patients with insulin-dependent diabetes. spoke with Laikind to find out the specifics of VC-01, the clinical trial protocols, and goals for this exciting technology. Your company is in the midst of working on some exciting technology. What makes your VC-01 diabetes therapy unique?

Laikind: What is unique is we start with a pluripotent stem cell line [called CyT49] and we have developed the technology to drive that to a pancreatic progenitor cell product [called PEC-01] that is designed to further differentiate and transform into islet cells after we implant it in the patient; this is very exciting.

And like normal islet tissues, this implant not only includes the beta cells that produce insulin, but other cell types that produce other regulators of blood glucose. We are combining this with a delivery device that encapsulates the cells and is designed to protect them from the immune response. This is important because while the cells we implant are human cells, they are not the patient’s own cells. Instead, the product is referred to as an allogeneic graft, and we need to protect the cells from immune rejection.

If VC-01 performs in humans the way it has in animals, it would become essentially a replacement pancreas from an endocrine point of view. We still have a lot of work to do in the clinical trials, but it looks promising from the animal studies. Can you talk about the makeup of the Encaptra delivery system, including what materials are being used and how the Encaptra delivers the cells?

Laikind: The Encaptra is made of materials that are commonly found in medical devices, and is designed to contain the cells while allowing the free-flow of nutrients, oxygen, and proteins across a semi-permeable membrane. What it doesn’t allow is any direct contact between the progenitor cells we implant and the patient’s cells. In this way, we are seeking to blunt any immune reaction that could occur.

In layman’s terms, the Encaptra system can be thought of as a kind of tea bag. A tea bag is designed to suspend the tea in the solution, with the essence coming through the bag, but the tea leaves staying inside.

Encapsulation in the device provides another advantage. If, from a safety standpoint, there were any issues with this product, we could withdraw the device with all the cells intact. Is the Encaptra going to go through a vascularization process?

Laikind: That’s correct. Quite often, we get the question about why we are implanting pancreatic progenitors—what that means is they have not yet become islets—instead of mature beta cells. The reason is that mature beta cells expect to have a full vascular system (blood supply) providing an oxygen-rich environment in order to function. They have a very high oxygen demand, and they don’t survive well in a low oxygen environment like the one into which the cells are inserted.

When we first implant these stem cells, there is no-to-very-little vasculature where we implant them. Therefore, they have to be able to survive in this hypoxic environment.

These PEC-01 pancreatic progenitor cells represent a cell population that is designed by nature to exist in such an environment. These cells release growth and angiogenic factors that are recruiting vasculature to the device and the cells. Over a period of time in the animal model, an extensive vascular network is built up around the Encaptra. This is important for not only keeping the cells alive, but also for the implanted cells to sense blood glucose levels and distribute insulin and other factors throughout the body. I know you said you can remove the device. Is it set up so that ideally you are going to leave the device implanted in patients?

Laikind: That’s correct. The cells are proliferative, so they can replace themselves.  However, the same encapsulation that protects the cells against the immune response also blocks the body’s housekeeping cells. Typically when cells die, your body has cells that remove the debris. That function will be inoperable with our platform in a patient’s body, thus we don’t expect the implant to last permanently; we think there could be a point where the cells wear out and we might need to replace the product. We don’t know yet how long that will be in patients. In animals we have tested for the lifespan of a mouse, which is about a year, and the product is still functioning after a year. Understanding you have only done animal studies thus far, can you walk me through the process of how VC-01 therapy will work for human patients?  Where is the VC-01 implanted? What is your estimated timeframe for patients transforming into insulin independence post-op?

Laikind: As we have done all our testing in animal models thus far, we can only extrapolate and speculate what we are going to see in humans. VC-01 is a combination product, and we are expecting to place this under the skin—we have a number of locations where we can place it.

In terms of potential insulin independence, we certainly hope to achieve that but we would also consider a significant reduction in insulin usage to be an important finding as well. Based on the animal studies, it takes about 2 to 3 months for the cells to mature, differentiate, and produce insulin at significant levels. So during that initial 2 to 3 month period, patients will still be injecting insulin to control their diabetes.

Because patients will initially still be using injected insulin, we need to implant the Encaptra in an area in the body where patients are not typically injecting insulin. Is the hope then after 2 to 3 months, you will be able to start to wean patients off of their insulin?

Laikind: That is certainly what we hope. If the product performs in humans as it has in animals, we expect to see patients reduce their dependence on exogenous insulin as the cells mature. And if it is fully effective, then they will no longer need insulin at all. Even if we reduce the amount of insulin usage, that would still be a significant improvement. One of the ongoing challenges for islet transplantation has been the continued use of immunosuppression medications. Will VC-01 therapy require the use of immunosuppressive medications? If not, why?

Laikind: All of our work has been done to produce this in such a way that patients will not need immunosuppressive medications—that is one of the important features of the Encaptra. The device is designed to prevent any cell-to-cell interaction between the host cells and the implanted cells, thus blocking the immune response. Can you talk about who you have been working with on VC-01?  

Laikind: Most of the development of VC-01 has been an in-house project. We have approximately 40 U.S. patents and several hundred pending applications, almost all of which were invented by our personnel. Having said that, we have also worked extensively with outside researchers from around the world. In some cases, we have supplied them with cells so they can study them.

We have worked with Sanford-Burnham, Nestle, and Pfizer as well as others. We have also teamed up on research with scientists at UCSF, UCSD, the La Jolla Institute for Allergy and Immunology, and several other institutions.

We are extremely grateful for the support we have received from The California Institute of Regenerative Medicine (CIRM) and JDRF. Both have been financially supportive and have brought their experts in to sit with us and brainstorm ideas to move the project forward. As you go forward with human trials do you plan on recruiting patients locally?

Laikind: For this first trial we have started at a single center, the Sanford Stem Cell Clinical Center at UCSD. The first cohort of three to six patients will be at UCSD, and if all goes well we expect to move quickly into a second cohort with a larger number of patients, expanding the trial out to anywhere from four to six centers. We are in discussions with a number of centers here in the U.S. and Canada. Are there ideal candidates you are looking for in the first trial?

Laikind: There are criteria set for the patient population that will be in the trial. This first trial will enroll adult type 1 patients with a history of good control. More information on the trial can be found at Down the road, we expect to target more high-risk patients, specifically hypoglycemic unaware patients. How would you characterize your long-term goal for VC-01? Will it be a biological cure for people with type 1?

Laikind: Of course this all remains to be proven in the trials, but based on what we have seen preclinically, we are looking for what we would call a "functional cure" for type 1 diabetes. What we mean by that is patients will still technically have the disease after treatment with our product; if the product is removed, the disease will return. However, if our product works as effectively in humans as we have seen in animal models, it would essentially act like a replacement pancreas from an endocrine point of view by providing insulin and other regulatory factors and control not only the short-term but also the long-term impact of the disease. The cells will do both the glucose monitoring and the insulin delivery that patients are currently contending with.  

For the duration that VC-01 is implanted in the patient, it has the potential to be a functional cure. Do you see the application of VC-01 therapy for type 2s who use insulin?

Laikind: There is no reason to believe this won’t be effective in that population. While type 2 is different than type 1, and we haven’t done any significant preclinical work in that area to date, theoretically it could be effective. We hope to expand our work into type 2 down the road. Do you have a timeline for the release of VC-01?

Laikind: It is impossible to get into a timeframe right now. We certainly have timelines that we have considered, but we can’t discuss those publicly. We are still early in this process and have a lot to learn. We certainly plan to work closely with the regulatory authorities to move the program forward as rapidly as possible.

The good news on this project is that the clinical endpoints are very clear. We will be taking patients into the study who have essentially no beta cell function and thus no appreciable insulin production. After we administer VC-01—if it is effective—patients will begin to have insulin in their blood without having administered it exogenously. We will detect this by measuring a biomarker called C-peptide which is only produced when insulin is made by the beta cell.  That is a very clear endpoint. Thus, if effective, it won’t take many patients to demonstrate the potential of the product. Without me saying specifically what our timeline is, I think VC-01, if proven effective, is a product that will have a reasonable timeline for approval.

To learn more about the technology, go to ViaCyte’s website here.