- Eli Lilly & Co. and a freshly formed Massachusetts biotech are working to create a new kind of diabetes treatment: one that would have patients implanted with a microcapsule filled with insulin-producing cells.
- Sigilon Therapeutics Inc., which launched in mid-2017 via the venture capital firm Flagship Pioneering, will provide the technology to develop such a treatment. Lilly, meanwhile, will supply the cash, including $63 million upfront and an undisclosed equity stake in Sigilon.
- Their aim is to take induced pluripotent stem cells and engineer them into pancreatic beta cells that make insulin for type 1 diabetes patients, yet won't elicit an immune response. Sigilon is responsible for development activities and costs up until submission of an Investigational New Drug application, after which Lilly takes the reins.
It's tough times for diabetes drugmakers. The therapeutic area is overflowing with treatment options, which has put considerable pricing pressure on companies looking to get their product on formulary lists and covered by insurers. In 2017 alone, one of the big three manufacturers in the space, Sanofi SA, saw revenues from its diabetes portfolio fall 13% year over year.
The stressors haven't deterred Lilly, surely because many of its drugs continue to be profitable. Its more recently approved diabetes products Basaglar (insulin glargine) and Jardiance (empagliflozin) are fetching northward of $400 million per year, while sales of its legacy drug Humalog continue to inch closer to $3 billion annually.
In fact, Lilly has doubled down on diabetes through dealmaking.
It handed a subsidiary of Nordic Bioscience A/S $55 million upfront last summer to obtain worldwide development and commercialization rights to a novel group of investigational diabetes medications. And this latest agreement with Sigilon extends the company's innovation into cell therapies, which could provide a workaround to the immune responses underlying chronic illnesses like type 1 diabetes.
"[P]ublished studies have shown the ability to overcome the immune foreign body response with our proprietary Afibromer technology," Sigilon CEO Paul Wotton said in an April 4 statement. "This holds the promise for the creation of state-of-the-art allogeneic cell factories to be transplanted into patients, without the need for immune suppression."
In addition to its upfront payment, Lilly dangled $410 million in milestones as well as single- to double-digit tiered royalties on future sales of any product coming from the Sigilon collaboration. The Indianapolis-based pharma expects its 2018 earnings per share guidance to decline five cents per share as a result of the transaction.
Separately, Lilly on April 4 also decided to outlicense three candidates for non-alcoholic steatohepatitis (NASH), a liver disease commonly related to diabetes, to California biotech Terns Pharmaceuticals Inc. Financial terms weren't disclosed.
"We are committed to improving the lives of people affected with diabetes, and we view NASH as an important comorbidity and complication of diabetes," Ruth Gimeno, VP of diabetes research and clinical investigation at Lilly, said in a statement. "The experience of Terns in drug discovery and clinical development for liver disease in China will complement our internal research efforts and will be critical as these potential medicines are further developed in China and around the world."