Living Cell Technologies (ASX: LCT OTCQX: LVCLY) and Otsuka Pharmaceutical Factory will establish a 50/50 joint venture company, Diatranz Otsuka, to accelerate the commercialisation of Living Cell’s DIABECELL, a groundbreaking cell implant therapy to treat diabetes.
The joint venture company will contract with Living Cell to refine the product, complete the clinical trials in New Zealand, Russia and Argentina, obtain product registration and bring DIABECELL to market. It will also build further pig and manufacturing facilities to ensure supply.
DIABECELL helps to restore insulin regulation to near normal levels, reducing the need for frequent injections and constant monitoring of blood glucose levels.
Japanese company Otsuka first invested in Living Cell in April this year, subscribing for 25 million shares at $0.12 per share for a total $3 million.
Otsuka will invest A$25 million cash into the joint venture company, subject to completion of conditions precedent, providing a secure base to bring DIABECELL to market over the next three years.
Living Cell will transfer DIABECELL-related assets valued at the equivalent amount, including clinical trial contracts, knowhow, patents and trademarks, manufacturing and research and development facilities, as well as its special herd of biocertified designated pathogen-free pigs.
The biocertified pig herd is used by Living Cell as a source of cells for treating diabetes and neurological disorders.
Living Cell will supply testing, R&D, management and administrative services to the joint venture at market rates. The joint venture will grant Living Cell an exclusive royalty free licence to relevant patents and knowhow and supply pig cells to progress its other products.
Diabetes affects 220 million people worldwide, and the World Health Organisation predicts that diabetes deaths will increase by more than 50% over the next 10 years. The cost of treating Type 1 diabetes, which affects an estimated 10% of all sufferers, is estimated at $1 million per person over a lifetime.
DIABECELL involves implanting pancreatic islet cells through a simple keyhole procedure to produce a self-regulating source of insulin in the patient’s body. In a world first, this treatment is done without the use of immune-suppressive drugs, which are usually required long-term and often have toxic side effects.
Clinical trials indicate that DIABECELL can make a significant difference, particularly for the 20 per cent of Type 1 sufferers who have no awareness of when their blood glucose drops dangerously low. Unaware hypoglycaemia is responsible for up to 8% of deaths and many disease related complications.