Will Rhode Island Win the Race to Cure Diabetes?

Local scientists have worked for decades to develop technology that could cure diabetes.
Semma Therapeutics
Consultant John Mills (left), Bri Bintz, Moses Goddard, Chris Thanos. Photography by James Jones.

By the mid-1980s, investor interest in biotechnology had exploded and the potential of developing a new treatment for type 1 diabetes was enormous as the number of people diagnosed with the disease grew.

One of the biggest players in the industry at the time was Mark Levin, an aggressive investor with a doctorate in chemical engineering who represented the Mayfield Fund, a prominent venture capital group based in the San Francisco area.

The classical model is for venture capitalists to form a company around leading researchers in the field, says Richard Horan, a managing director at the Providence-based Slater Fund, which supports biotechnology ventures in Rhode Island.

Levin came to Providence to help start CytoTherapeutics, the first of several biotech companies in Rhode Island to grow out of research from Galletti’s lab. He, Aebischer and Goddard all took leadership roles at the new biotech company.

Initially, they decided to focus on developing a treatment for diabetes with ECT. Using cells from pigs, the idea was to create an implant that could sense glucose and administer insulin in the pancreas.

But science can be very tricky.

“The road toward an effective islet transplant is littered with the wreckage of companies that tried and failed,” Horan says.

At CytoTherapeutics, they learned pretty quickly that the beta cells they wanted to transplant were “fussy” about the conditions, Goddard says. The cells required a lot of oxygen, and they were difficult to handle. So they came to the conclusion in the 1980s that a cure for diabetes wasn’t in the cards at that point for the company.

“As it turned out, all of the biotech people who were new to drug development got kicked in the teeth just like everybody else, and realized that drug development was very, very complicated,” Goddard says. “And what we were able to do so easily in rats and mice in 1973 was extraordinarily hard to replicate in humans.”

They decided to shift to more manageable clinical problems, such as treatments for chronic pain and neurodegenerative conditions such as Parkinson’s disease, Huntington’s disease and ALS. At that time, they worked with cells from calves.

CytoTherapeutics partnered with Swedish company Astra to develop treatments for chronic pain. It grew into Rhode Island’s largest biotech firm, with about 125 employees at its height. The company received $3.4 million in incentives from Rhode Island and became a publicly traded company.

But when a clinical trial with cancer patients didn’t produce the results they were seeking in the late 1990s, Astra pulled its investment from the company, resulting in layoffs. CytoTherapeutics shifted its focus again to creating membranes to treat retinitis pigmentosa, a degenerative eye condition typically diagnosed in children that can eventually cause blindness.

But investors became impatient about the lack of progress with ECT and wanted to reinvent the company into something else, Goddard says. In the meantime, stem cell technology had gotten traction and was a hot new investment opportunity. Company leadership had also changed. Galletti died unexpectedly in 1997 and Aebischer had left the company and returned to Switzerland.

Goddard retained faith in ECT, even as CytoTherapeutics rebranded itself as a stem cell company and moved what remained of the operations to California. He sought the rights for the technology for under $1 million. Two other companies emerged in the bidding: a biotech startup in Denmark and in Providence called NsGene and Modex, started by Aebischer. They came to a collective deal to split up the intellectual property.

Goddard eventually attracted the interest of a group of French investors and helped found the American division of a company called Neurotech. They continued to work on ECT for retinitis pigmentosa and macular degeneration, an eye condition that results in blurry vision.

It was while Goddard was at Neurotech and teaching at Brown that he met a graduate student named Chris Thanos. At six feet, eleven inches, Thanos had come from Oregon as an undergrad to play basketball at Brown. An injury sidelined his athletic career when he was a sophomore, but Thanos was already more interested in biology.

Goddard brought him on in his final days at Neurotech, and they later hired a chemical engineer named Briannan Bintz.

Goddard also continued to collaborate with Mills, who had worked with him at CytoTherapeutics and is married to his niece. After the company moved to California, Mills started a company called Kineteks in a converted garage in Warwick to build equipment for complex biotech products.

Goddard, Thanos, and Bintz eventually left Neurotech, but Goddard and Thanos continued working as consultants, and during that time, Thanos discovered a therapy for wound healing. Then in 2010, he, Goddard and Bintz, regrouped and formed another company around the technology. CytoSolv was born, with $500,000 in backing from the Slater Fund, and $1 million from other investors.

“From a Slater perspective, what we were backing was a team of scientists and entrepreneurs in Goddard, Thanos, Bintz and their collaborators,” Horan says. “We were interested in the wound healing project, but it was really more of a bet on a very compelling team of scientists.”

By 2014, CytoSolv was making some progress on the wound healing project, but raising additional funds was a challenge, and CytoSolv went from one project to another.

Eventually, Goddard and Thanos were faced with fundamental questions about the mission and vision of the company, Horan says. They did some soul-searching, which brought them back to the conviction that they should once again focus on ECT to help develop a cure for diabetes.

But it wasn’t a slam-dunk decision.

“I remember the dynamic with Chris and Moses,” Horan says. “Chris, the younger scientist, was very enthusiastic about the aspiration to pursue this. Moses, who is his mentor, and senior by twenty years, was much more measured, if not skeptical, based upon his experience and and appreciation for how difficult this would be.”

Could they reposition CytoSolv around the technology in 2015? Science had developed since the 1980s when Goddard had first started working with ECT, but the complexity of the task was still daunting.

They decided to pivot away from the wound healing project and take a leap of faith, Horan says. CytoSolv began to collaborate with Cambridge-based Takeda Pharmaceuticals to study potential applications of the technology.

In the meantime, Melton had his breakthrough in creating islets at the Harvard Stem Cell Institute. Through the partnership with Takeda, the principals at CytoSolv were introduced to Melton.
He in turn got them in touch with Robert Millman, and his colleagues at MPM Capital, who were in the process of forming Semma Therapeutics around the stem cell technology Melton spearheaded at Harvard.

Similar to Goddard’s experience about thirty years before, a venture capital firm and other partners were once again looking for scientists and clinicians to help develop technology to cure type 1 diabetes.

Representatives from MPM came down from Cambridge to CytoSolv’s office on Allens Avenue in Providence. Goddard took them to Mills’s facility off Jefferson Boulevard.

“They’re this incredibly resourceful group of people building stuff out of nothing, these incredible little robots that put cells inside of capsules,” Goddard says. “It’s fantastic.”

MPM Capital decided that CytoSolv and Kineteks were going to be essential to creating a membrane device in which the beta cells could be encapsulated, Goddard says. In 2015, Semma acquired CytoSolv for an undisclosed amount.

The office in Providence became known as Semma South. Goddard, Thanos and Bintz took on leadership roles in the new company and have helped expand its operations to more than thirty full-time employees between the offices in Cambridge and Providence. Kineteks remains an independent, but affiliated, company.

They’ve already been in contact with the Food and Drug Administration. Semma doesn’t have a public timeline, but they are looking to start clinical trials within a few years.

“This is not the kind of thing you can do in your garage,” Horan says. “This is not the kind of thing you can do on money from your family and friends. It requires tens of millions of dollars just to get to the starting line. And it will take hundreds of millions to eventually introduce it to clinical practice.”

But for the millions of people with type 1 diabetes, he says, such a cure would be priceless.

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