London biotech firm wins $23M investment for new diabetes treatment
A London life sciences business scored a “milestone” $23-million investment after its new diabetes treatment proved effective in recent human trials.
Sernova Corp., based at Western University’s research park on Collip Circle, is for the first time getting funding from institutional investors for its cell pouch technology that aims to one day ensure diabetics no longer need insulin injections.
“This is incredible for a company in London, Ontario, focused on treatment of Type 1 diabetes,” chief executive Philip Toleikis said.
“Institutional investors are far more sophisticated in their due diligence. We are a stable company. They see us a biotech company that can be successful.”
Private investment firms Canaccord Genuity Corp. and Leede Jones Gable Inc. have bought shares in Sernova. The money will be used to fund continued human and clinical trials and research and for general working capital, Toleikis said.
Sernova has created a cell pouch, filled with insulin-producing cells, that can be inserted under the skin of a diabetes patient so they no longer need insulin injections.
“We have found that the cell pouch technology is working,” Toleikis said.
Sernova is winning national attention both for the recent investment and a product that “shows promise,” said Andrew Casey, chief executive of the BIOTECanada industry association.
“This is a milestone investment, this is important revenue to drive Sernova forward,” he said. “This investment is so important, it is so expensive,” to bring a new drug or treatment to market.
“The product definitely shows promise,” Casey said. “It has to go through several phases of clinical trials to prove safety and efficacy.”
The investment is important on two counts: It gives the business money to continue research and trials, and it shows they are on the right track as private investors look very closely at industry before investing.
“These investors have a deep understanding of life sciences,” Casey said. “They look long and hard at the science.”
At January’s 2021 American Society of Transplant Surgeons’ online winter symposium, clinical investigator Piotr Witkowski of the University of Chicago reported his study of Sernova’s human trials showed reduced need for insulin injections, no life-threatening side-effects, and improvements in patients’ glucose levels.
Sernova, founded in 2009, began clinical trials of the cell pouch technology in 2013 and human trials at the University of Chicago in 2019. Toleikis believes several more years of testing and trials remain before it can bring a product to market.
The new investment will also be used to expand Sernova’s London office and research labs, as its staff of 10 will likely double in about a year, he said.
“We are a Canadian company and we want this to be a Canadian company. We want the world to know Canadian technology is treating patients with diabetes,” Toleikis said.
“We want to remain here.”