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Japanese invest in NZ-based pig transplants for diabetics

Tuesday 12th April 2011

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Auckland-based biotech entrepreneur Living Cell Technologies (LCT) - which is listed on the ASX - says a big Japanese company, Otsuka Pharmaceutical Factory, is investing A$3 (NZ$4) million in its xenotransplantation therapy for type 1 diabetics.

LCT implants breeds and slaughters piglets so that the islet cells in their pancreas can be injected into human patients to produce insulin and help their bodies stabilise the blood sugar levels.

Otsuka - the research and manufacturing arm of the Otsuka group of companies - will buy 25 million shares in two tranches at A12c a share, and will also lead a Japanese part of clinical phase III trials expected to start in New Zealand later this year.

LCT said it would use the Japanese money to fund continued development and clinical trials of its Diabecell treatment, and that the companies had started talks on a research and license agreement for commercialisation of the therapy which could give Otsuka sole rights to its use in Japan, India and Asian countries outside China.

The New Zealand company already has a deal in China with Jiangsu Aosaikang Pharmaceutical Co.

Negotiations with Otsuka on a sole license for Diabecell treatment centres in other Asian countries are expected to be completed by the end of October.

LCT chairman Robert Elliott said the company was excited about the opportunities to work together with Otsuka to develop the treatment of diabetes in Japan and Asia.

"We will begin planning for a clinical trial in Japan, which will be a natural and exciting extension to our phase II trial in New Zealand, which is coming to conclusion," he said.

The company's main phase II clinical trials at Middlemore Hospital have finished, but it is testing high and low doses on two more patients, partly to see if the treatment can succeed with the use of fewer piglets for each patient.

Otsuka managing director Hiromi Yoshikawa said that LCT's xenotransplants - in which the cells are encased in a seaweed gel to avoid triggering an immune response in the patient to the pig cells - provided a significant opportunity to improve treatment options available in Japan and elsewhere in the world.

The Japanese company will pay A$2.28 million for 19 million shares, not later than April 22, and another A$720,000, for an unsecured note to be converted to six million shares once shareholders give approval at an LCT general meeting no later than June 30.



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