The round was co-led by Eight Roads Ventures and Cowen Healthcare Investments.
Semma Therapeutics completed an oversubscribed Series B financing totaling $114 million. The round was co-led by Eight Roads Ventures and Cowen Healthcare Investments. Existing investors included MPM Capital, F-Prime Capital Partners and ARCH Venture Partners, as well as strategic partners Novartis, Medtronic and the JDRF T1D Fund. New investors included ORI Healthcare Fund, Wu Capital, 6 Dimensions Capital and SinoPharm Capital.
Founded in 2014, Semma is focused on stem-cell research, specifically on creating insulin-producing beta cells for diabetes patients. The funds raised will be used to advance its lead program, encapsulated stem cell-derived islets, through proof-of-concept clinical trial, as well as to expand its other regenerative medicine programs.
In preclinical studies, the company’s stem cell-derived beta (SC-beta) cells were comparable to beta cells within human islets in vitro and in vivo, effectively controlling diabetes.
“I’m very pleased and impressed to see how far the science has progressed at Semma; what the team has accomplished from a development perspective on both the biology side and engineering side is remarkable,” said Douglas Melton, the company’s founder and board observer, in a statement. “Semma’s scientists have very effectively dedicated themselves to systems that reliably generate cells indistinguishable from human pancreatic beta cells and to the invention of novel devices that are immunologically protective and surgically practical. We’re very encouraged and excited about the potential this program has for diabetic patients and their families.”
In addition to the Series B raise, Daniel Auerbach from Eight Roads and Kevin Riady from Cowen joined Semma’s board of directors.
“We are now well positioned, between Semma’s scientific progress and this recent financing, to bring Semma’s lead therapeutic through clinical proof of concept in patients with Type 1 diabetes, while we expand into related arenas and build a leading regenerative medicine company,” said Mark Fischman, Semma’s board chairman, in a statement. “We’re delighted that this accomplished group of investors share our mission to cure insulin-dependent diabetes.”
The company raised $44 million in its 2015 Series A round. The company’s approach is based on research from the laboratory of Douglas Melton, a stem cell researcher at Harvard University.
Semma plans to request the start to human clinical trials from the U.S. Food and Drug Administration (FDA), although a specific timeline has not been announced. “I’m very optimistic,” Fishman told the Boston Globe. “I’m not blindly optimistic. We have to go from a small animal to a big animal, but we think that kind of scaling is possible. If anything is going to work in regenerative medicine now, this is what I’m betting on.”
It’s noteworthy that both Novartis and Medtronic are investors in the company, because if Semma is ultimately successful, both companies would likely lose revenue. Novartis has a strong diabetes portfolio and Medtronic is a manufacturer of insulin pumps. Novartis has long had an interest in regenerative medicine for diabetes.
In 2014, when Semma was launching, the company’s then-chief executive officer, Robert Millman noted about Medtronic, “They’ve got diabetic pumps and I think they understand that if cell therapy ends up hoping what it will be—a multi-billion device industry disappears.”
