Eli Lilly and Sigilon Therapeutics have announced a strategic collaboration to develop encapsulated cell therapies for type 1 diabetes.

Cell encapsulation involves the immobilisation of cells within a semi-permeable membrane so they can be implanted into patients to treat serious diseases without the need for immunosuppression.

Sigilon’s Afibromer technology will be used to encapsulate insulin-producing cells. According to Sigilon, the technology provides a more natural control for diseases that are currently treated with intermittent injection or infusion.

In type 1 diabetes, pancreatic beta cells are destroyed by the immune system, leading to hyperglycaemia and long-term complications if glucose levels are not managed effectively.

Under the collaboration, Sigilon will develop induced pluripotent stem cells, a type of stem cell derived from adult cells, engineered into differentiated insulin-producing pancreatic beta cells aimed at restoring insulin production without triggering an immune reaction. Sigilon will be responsible for all development and costs until an investigational new drug application is submitted.

Sigilon Therapeutics CEO Dr Paul Wotton said: “We are very pleased to partner with Lilly, a worldwide leader in diabetes care, as we seek to apply Sigilon’s game-changing technology to the area of insulin-dependent diabetes. At Sigilon, published studies have shown the ability to overcome the immune foreign body response with our proprietary Afibromer technology.

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“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. Our cell engineering and delivery system-based platform may allow us to program and control dynamic protein delivery for the long-term treatment of debilitating diseases.”

Under the agreement, Lilly will receive an exclusive worldwide license for Sigilon’s Afibromer technology for islet cell encapsulation. Sigilon will receive an upfront payment of $63m and will be eligible for up to $410m in development and commercialisation milestones and single to double-digit tiered royalties on future product sales. Lilly will make an undisclosed equity investment in Sigilon. The collaboration could generate up to $473m.

Lilly is a world-leader in diabetes research, having launched the first commercially available insulin product for diabetes in 1923. Encapsulated cell therapy is an emerging area of biopharmaceutical research that has the potential to eliminate the need to take insulin via injections or insulin pump.