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Bioartificial Pancreas News
April 18, 1996

For people with diabetes, any news of advancement in the development of a bioartificial pancreas is reason to be hopeful. The individuals and companies mentioned here are hoping to contribute to a very large market. There are almost two million diabetics in the United States and Europe, and billions of dollars are spent each year on insulin, needles and related supplies. People with diabetes welcome the news that the technology also known as encapsulated-cell transplantation has moved from science fiction to clinical trials. Researchers have high hopes for encapsulation using a semi-permeable membrane that only nutrients may enter and only waste products and insulin may leave.

Several U.S. clinical centers have used transplants of intact human pancreatic islets or dissociated islet cells to treat people with type I diabetes whose blood glucose concentrations were regulated inadequately by traditional insulin injection therapies. Unfortunately, human pancreatic tissue is scarce, and without immunosuppressive drugs, the very same autoimmune reaction that destroys the patient's own beta cells might eventually kill off any unencapsulated transplanted beta cells.

Neocrin Company

Neocrin Company in Irvine, California is a leader in the research and development of a bioartificial pancreas, a minimally invasive cellular transplant for the treatment of insulin-dependent diabetes mellitus ("IDDM"). They believe that, if successfully developed, their artificial pancreas will consistently provide a marked improvement in injections and delaying or preventing the downstream medical complications of the disease. This innovative therapy would represent a significant advancement in the quality of life for both patients with IDDM as well as a large number of Type 2 diabetics who must regularly use insulin.

Transplantation of cells and organs for the treatment of diabetes has been constrained by significant difficulties related to the availability of suitable donor organs, the complexity of surgical procedures and the undesirable need to give the transplant recipient immunosuppressive drugs. The technological achievements required to make cell therapy commercially successful for diabetes are essentially two-fold: the ability to provide a plentiful supply of high quality cells, and the ability to protect those cells from immune rejection and possible autoimmune recurrence by the transplant recipient.

Neocrin's technology consists of proprietary immunoprotective cell encapsulation materials and cell purification techniques that should satisfy the requirements to make cell therapy commercially successful for diabetes and make it possible to achieve non-immunosuppressed transplants of animal-derived pancreatic cells capable of replacing the essential endocrine function of a diseased pancreas. Neocrin's bioartificial pancreas will contain purified porcine Islets of Langerhans in a small volume (10-20cc) designed to be injected into the patient using minimally invasive procedures.

Neocrin has its own herd of pigs that are maintained in an environment free of most pathogens that normally infect pigs. The selectively permeable membrane (proprietary hydrogel class) that encapsulates the islet cells is coated with an outer layer of rough-surfaced Teflon which encourages capillaries to surround the outside of the implant and provide better nourishment to the cells. Neocrin believes that vascularization is important for these implants to work as the islets require a substantial level of oxygen. However, no one expects the encapsulated islets to survive the lifespan of someone with diabetes, and so the implants must either be replaced periodically or designed with access ports for refilling with fresh islet cells from outside the patient. Such a device might be implanted intraperitonneally with a port just below the skin through which new cells could be added.

Neocrin has licensed 28 issued and pending patents in the area of cell immunoprotection and implantation for treating diabetes. The Company holds seven issued patents from Damon Biotech (now belonging to Repligen, Inc.), two issued patents from the Massachusetts Institute of Technology, two pending patents from Skjak-Braek, five pending patents from the University of Texas, numerous pending patents from Baxter Healthcare, and five patents or applications resulting from its acquisition of the diabetes program of CytoTherapeutics, Inc. Neocrin also holds proprietary technology in areas of isolation and purificaiton of porcine islets, microencapsulation, and in vitro characterization of islets by cell cytometry. The Company's strong proprietary position makes it a formidable opponent in the competitive market for developing diabetes therapeutic alternatives.

Pricing for the bioartificial pancreas will depend upon current reimbursement levels for treating IDDM and its effectiveness in treating the symptoms of the disease. Neocrin believes that the bioartificial pancreas will clearly exceed the effectiveness of insulin injection therapies and could be attractively priced relative to the current cost of overall therapy.

Neocrin plans to enter the diabetes market through a strategic alliance with one or more large pharmaceutical partners which should allow Neocrin to penetrate the market quickly and establish the bioartificial pancreas as the preferred treatment for IDDM. Neocrin anticipates a rapid market growth through the demonstration of near-normal blood glucose regulation for difficult-to-control diabetics with frequent hospitalizations, and patients experiencing complications from the disease.

In December 1993, Neocrin acquired the diabetes program of CytoTherapeutics, Inc. ("CTI") in return for an equity position in the Company. In connection with this transaction, the Company acquired patents and proprietary technologies for isolation, purifying and preserving porcine islets, and the renowned expertise of Drs. David Scharp and Paul Lacy in islet isolation, purification and transplantation. Dr. Scharp has accepted a full time position as the Company's Vice President of Research and Medical Affairs and Chief Scientific Officer, and both he and Dr. Lacy joined the Company's Scientific Advisory Board which already included many of the world's leading authorities in the treatment of diabetes.

W. R. Grace & Co.

W. R. Grace & Co. announced yesterday that it will commence human Phase I clinical trials of its Bioartificial Pancreas to determine the safety and tolerability of the implant in diabetic patients. Just six patients will be selected for Phase I. The effort will be conducted by the company's biomedical unit located in Lexington, Massachusettes, in conjunction with the Deaconess Hospital in Boston. Deaconess is a major teaching hospital associated with the Harvard Medical School. Grace is a leading global supplier of flexible packaging and specialty chemicals and a leading provider of specialized health care services.

"Our ultimate goal is to demonstrate that the Bioartificial Pancreas can help patients suffering from insulin-dependent diabetes lead more normal lives and minimize some of the complications associated with diabetes," said Dr. Barry A. Solomon, executive vice president of Grace Biomedical.

The W.R. Grace & Co. Bioartificial Pancreas consists of a patented, immunoprotective membrane, surrounded by living porcine pancreatic cells contained within a plastic housing that helps regulate insulin production according to the patient's blood glucose level. It weighs approximately three ounces and is comparable in size and shape to a hockey puck. It is implanted in the abdomen and grafted to an artery and a vein. The patient's blood flows through the implant and is then returned to the vascular system. "Unlike diffusion devices implanted in the peritoneum, the perfusion device has the advantage of direct and constant contact with the bloodstream", says Jan Stegemann, senior engineer at Grace. A drawback, however, is that surgery is required. Grace is seeking to partner with others in the Grace Biomedical clinical trials and eventual commercialization efforts.

"For Grace Biomedical, this is the second bioartifical organ in clinical trials. Since 1994, Phase I clinical trials have been underway to test a Bioartificial Liver Assist system which utilizes an extracorporeal porcine liver cell bioreactor as a bridge to transplantation for acute liver failure patients," said Mel Soule', president, Grace Biomedical. Additional information on upcoming trials may be obtained by writing to Dr. Barry Solomon c/o W.R. Grace & Co. Biomedical Labs 128 Spring Street Lexington, MA 02173.


Metabolex, located in Hayward, California, also states that the challenge of cellular therapy for diabetes is to provide a source of suitable tissue as well as a means of transplanting it without the need for long-term immunosuppressive drug therapy. Metabolex is developing proprietary technologies for the microencapsulation of insulin-producing tissues using thin, conforming, biocompatible coatings. The company has designed its microcapsules to provide an effective barrier against immune rejection, yet offer excellent diffusion kinetics so that cellular functions such as glucose responsiveness remain relatively unimpeded. Additionally, the company's microencapsulation technology appears to stabilize delicate tissues, enhancing their ability to be processed, stored, shipped and cryopreserved. Metabolex envisions delivering a small volume (10-15 ml) of its encapsulated insulin-producing tissue through a needle and syringe into the peritoncal cavity of the diabetic patient, possibly in an outpatient procedure. The company hopes that its cellular implants will manufacture sufficient insulin to provide normal glucose control for insulin-deficient patients with diabetes for up to a year or more.

Metabolex's most advanced microcapsules consist of multilayer coatings that allow the company to control important parameters of capsule size, permeability and strength, while retaining cell viability and biocompatibility in transplanted patients. The company has the ability to produce microcapsules in large quantities with reproducible small size and tight distribution: typical islet capsules are in the size range of 250 to 300 microns. An important component of the capsules is alginate, derived from seaweed, which Metabolex has purified so it is biocompatible in that it produces no sign in animals of the tissue reaction known as fibrosis.

Metabolex's microcapsules appear to stabilize the function of islets both in cell cultures and in animals. The company has shown that far fewer of its encapsulated islets are required to normalize glucose levels in diabetic mice than are unencapsulated islets. One of the layers in Metabolex's microcapsules is composed of chemically cross-linked proteinaceous material which provides both strength and control of permeability. Metabolex has shown that these microcapsules exclude molecules of a certain size, such as IgG, thus helping to protect the transplanted tissues from immune rejection. The company has also demonstrated that the microcapsules have sufficient strength to contain proliferating cells. In addition, Metabolex has shown that its microcapsules can withstand freezing and thawing, and the company has developed bulk cryopreservation methods to facilitate long-term storage of encapsulated islets.

Metabolex also expects that the company's initial source of tissue for clinical use will most likely be islets isolated from pigs. The company has demonstrated that microencapsulation of porcine islets stabilizes those delicate tissues both in cell culture and when implanted into animals (in vivo). Metabolex has implanted microencapsulated islet xenografts (non-rodent cells) into diabetic mice to evaluate the performance of the company's technologies.

Metabolex is also investigating alternate sources of tissue such as engineered insulin-producing cell lines. Such engineered cells could provide advantages of uniformity and ultimately prove preferable to isolated normal tissues for commercialization of this treatment. Metabolex has acquired the rights to and is currently evaluating the in vivo performance of an engineered cell line reported to have insulin response characteristics approaching that of human islets.


BetaGene is a privately held biotechnology company developing innovative strategies for the detection and treatment of diabetes. This company was formed for the purpose of developing proprietary technology originating at the University of Texas Southwestern Medical Center. BetaGene retains exclusive license to aspects of this technology including the use of engineered cell lines for the treatment of type I and Type 2 diabetes and the use of these cells for bulk insulin production. BetaGene's cell engineering technologies received their first patent in June of 1995. BetaGene continues to develop its proprietary technologies with its partner, Gore Hybrid Technologies, Inc.

Producing an artificial islet that can be produced in unlimited quantities is a complex proposition. In 1983, Dr. Regis Kelly and his colleagues at the University of California at San Francisco inserted the human insulin gene into constantly dividing cells from the pituitary gland, and the cells began to secrete human insulin. Unfortunately, the cells put out insulin without regard to glucose levels. Dr. Newgard's team (BetaGene) discovered that Dr. Kelly's cells needed a particular protein found in islets that is thought to play a role in controlling insulin release. This glucose transporter, GLUT-2, allows glucose to enter islets.


Several groups of researchers are trying to develop cell lines that can respond to changing blood concentrations of glucose by producing the appropriate amount of insulin. The cell line created from insulin-secreting pancreatic mouse tumors called insulinomas has been maintained for over a year in culture and responded well to different glucose concentrations by producing varying concentrations of insulin, but the cell culture results may be difficult to reproduce in animals and humans. "The feedback mechanism of an islet cell is phenomenally complex," says Robert Lanza of BioHybrid Technologies Inc. in Shrewsbury, Mass. "I think we're talking decades before we'll have a glucose-responsive cell line that can be encapsulated for routine use in diabetic patients."

Despite the complexities, BioHybrid is very much in the race to develop the bioartificial pancreas. The July 1995 issue of GENETIC ENGINEERING NEWS reported that BioHybrid's biodegradable spheres were remaining viable for up to six weeks and responding with appropriate physiological insulin response to glucose in vitro. There was no difference in viability with concomitant immunosuppressive therapies. BioHybrid is in the large animals phase of their trial now and expects human trials to begin in 1997; the human trials are expected to take place initially in the Boston area.


If successfully developed, the bioartificial pancreas promises to improve the lives of people with insulin-dependent diabetes by improving blood glucose regulation and reducing the complications often associated with diabetes. This ongoing research points to a cure which will improve the lives of patients but will not eliminate the need for regularly scheduled blood glucose monitoring and vistits to physicians. The Children with Diabetes on-line magazine will do its best to keep you informed about the progress being made by the dedicated individuals working to improve the lives of people with diabetes.

Sonia Cooper

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