The involvement of GlaxoSmithKline
comes via a partnership with ViaCyte, Inc., of San Diego, Ca., in a
clinical trial, partially financed with a $10.1 million grant today
from the stem cell agency. The trial involves a human embryonic stem
cell product that has “the potential to essentially cure patients
with type 1 diabetes and provide a powerful new treatment for those
with type 2 disease,” ViaCyte said. Scientific reviewers for the agency, formally known as the California Institute for Regenerative Medicine(CIRM),  “characterized the goal of the proposed therapy as as the 'holy grail' of diabetes treatments.”

CIRM Director Jeff Sheehy, who is co
vice chair of the agency's grant review group, said the ViaCyte product
could be manufactured on a large scale and basically involves “taking
(small) pouches and popping them into patients.”

The stem cell agency's award triggered
arrangements between ViaCyte and Glaxo that will bring in financial
and other support from Glaxo. The exact amount of cash was not
disclosed. CIRM said Glaxo will “co-fund and, assuming success,
conduct the pivotal trial and commercialize the product.” Under the terms of the grant, Glaxo and ViaCyte will have to meet CIRM milestones in order to secure continued funding. 

Following board approval, Jason
Gardner, head of the Glaxo stem cell unit, characterized the
arrangement as a partnership. He told the board that the company
intends to develop a “sustainable pipeline.”

Gardner credited CIRM President Alan
Trounson with being instrumental in helping to put the arrangement
together, beginning with their first meeting three years ago.
Trounson said the deal will resonate not only in California but
throughout the world.

Paul Laikind, president of ViaCyte,
also addressed the board, stressing the importance of CIRM's
financial support for his company over past years. It has received
$26.3 million (not including the latest grant) from California taxpayers at a time when stem cell
funding was nearly dried up. He noted that small companies such as ViaCyte do not have the resources to carry a product through the
final stages of clinical trials and subsequent production. Gardner also said,

In comments to the California Stem Cell
Report, Elona Baum, CIRM's general counsel and vice president for
business development, described the award as a “watershed” for
the eight-year-old agency, linking the agency with Big Phama for the
first time. Much of CIRM's current efforts are aimed at stimulating
financial commitments from large companies, which are necessary to
commercialize stem cell research.

Arrangements between Big Pharma and
small companies are not unusual and can vanish quickly. However, the
CIRM-ViaCyte-Glaxo deal sends a message to other Big Pharma companies
and smaller ones, perhaps clearing away concerns that have hindered
other deals that could involve the stem cell agency.

The stem cell agency is pushing hard to
fulfill the promises of the 2004 ballot campaign that created CIRM.
Voters were led to believe that stem cell cures were virtually around
the corner. None have been developed to date.