Eli Lilly Plunks Down $63M Upfront in Deal With Startup Sigilon

Less than one year after it launched Cambridge, Mass.-based startup Sigilon Therapeutics struck a collaboration deal with Eli Lilly to develop encapsulated cell therapies for the potential treatment of type 1 diabetes.

This morning Sigilon said Eli Lilly will hand over an upfront payment of $63 million to harness its Afibromer technology product platform to develop the encapsulated cell therapies that can be implanted within a patient. In addition to the upfront payment Lilly will also make an undisclosed equity investment into Sigilon, the company announced. If the collaboration hits certain developmental and commercial milestones Sigilon could stand to receive up to $410 million, according to terms of the deal that were made public.

The deal with Sigilon strengthens Eli Lilly’s commitment to diabetes therapies. Last year the company announced it intended to invest $850 million across its U.S. manufacturing operations to support its diabetes programs. Since 2012 Eli Lilly has invested more than $1.2 billion to boost its domestic insulin manufacturing operations.

Under the collaboration agreement, Sigilon will create proprietary products comprised of induced pluripotent stem cells, which is a type of stem cell derived from adult cells. Those will be engineered into differentiated insulin-producing pancreatic beta cells and encapsulated using Sigilon's Afibromer technology. Sigilon said the goal of these developmental products will be to restore insulin production over sustained periods, without triggering an immune reaction.

Using implanted delivery agents can be an issue due to the body’s immune response, which can lead to problems such as fibrosis. Sigilon’s technology platform attempts to address the associated immune response concerns through the use of “living therapeutics.” Sigilon has been developing its Afibromer technology to avoid an immune response that can not only work without scarring concerns but also without the need for immunosuppression. Its capsules are implanted within the body to deliver steady levels of therapeutic proteins for long periods of time, the company said.

Sigilon Chief Executive Officer Paul Wotten said published data shows its Afibromer technology has the ability to overcome the immune foreign body response.

“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,” Wotten said in a statement.

Sigilon said its approach holds promise to address chronic conditions, such as type 1 diabetes. In type 1 diabetes, pancreatic beta cells are destroyed by the immune system, leading to hyperglycemia (high blood sugar) and long-term complications if glucose levels are not managed effectively.

Daniel Skovronsky, Eli Lilly’s head of clinical and product development, said the company sees the Sigilon technology as a “potentially disruptive technology that could result in meaningful clinical advancements for chronic diseases such as type 1 diabetes."

Under the terms of the agreement, Sigilon will be responsible for all development activities and costs related to the collaboration until submission of an investigational new drug application (IND). After an IND is submitted, Lilly will be responsible for all clinical development and commercialization activities and costs related to the collaboration.