Novo picks up California plant from Asterias as it moves stem cell work forward

Novo Nordisk has been gathering a phalanx of assets around a stem cell development program that could cure Type 1 diabetes. Now it has a U.S. manufacturing facility where it can produce them.

The diabetes specialist announced today that it will build out a facility in Fremont, California, that it has leased from stem cell biotech Asterias Biotherapeutics. Along with manufacturing intellectual rights it is picking up in the deal, the facility gives Novo a plant that can produce stem cell-based therapies while kick-starting Asterias’ stem-cell program.

Novo paid $2 million for the plant and production know-how. It expects the reworked facility, previously operated by Asterias, to be up and running by the end of next year to support its clinical work in stem cells. Novo couldn’t put a number on how many employees would work at the facility but said in an email today that “there will be a significant workforce operating the facility.”

“Our ambition is to develop stem cell-based therapies for a range of serious chronic diseases where we see significant unmet medical need," Jacob Sten Petersen, Novo’s head of stem cell R&D, said in a statement. "The reliable, large-scale supply of therapies is a vital component in our efforts, so I am delighted that we have established this facility that further demonstrates our strong commitment to this field."

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The Denmark drugmaker said that in addition to the long-term lease of the facility, it has signed a two-year nonexclusive license on Asterias' intellectual property for manufacturing stem cells. It will also permit Asterias to move forward with its own clinical program by subleasing laboratory, manufacturing and office space in the facility back to Asterias until the end of 2021.

Before Lars Rebien Sorensen gave up the CEO role at Novo Nordisk in 2016, he predicted that the Denmark diabetes specialist would have a stem cell therapy approach that could cure Type 1 diabetes in the clinic in five years.

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It has been working toward that goal, and the drugmaker has centralized its stem cell R&D in at its recently established Stem Cell Transformational Research Unit in Måløv, Denmark, where it is working on treatments not only for diabetes but also for Parkinson's disease, chronic heart failure and dry age-related macular degeneration (AMD).

Much of its work, however, is taking place in the U.S. In May, Novo struck an agreement with the University of California, San Francisco (UCSF), to license a technology to enable the generation of GMP-compliant human embryonic stem cell lines, along with the rights to develop them into future regenerative therapies. It claims that its work in the GMP lab at UCSF is “deriving cell lines that are defining a new quality standard in the production of stem cell-based therapies.”

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With cell line work advancing at UCSF and a collaboration with Cornell raising hopes that a major barrier to curing diabetes can be overcome, Novo has set its sights on getting a diabetes candidate into human testing in the next few years. That makes Novo one of the bigger players in a race that includes Eli Lilly partner Sigilon Therapeutics and well-financed Semma Therapeutics, which in May named Bastiano Sanna, formerly of Novartis’ cell and gene therapy unit and Magenta Therapeutics, as its CEO.  

An effective stem cell treatment for Type 1 diabetes and other chronic disease would be a huge boost for Novo, which has been laying off employees, including in R&D, as pricing pressures for insulin in the U.S. have slammed its revenue lines. It sees drugs to treat other serious chronic diseases as critical to its future. With that in mind, Novo is restructuring its R&D unit, investing in artificial intelligence and planning to rely more on third parties for innovation.