Biotech Co. Expands Testing Tied to its Cell Pouch Bio-hybrid Organ
Research Report

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Sernova Biotherapeutics Inc. (SVA:TSX.V; SEOVF:OTC; PSH:XETRA) is expanding the clinical testing involving its Cell Pouch Bio-hybrid Organ in regenerative and transplantation markets targeting type 1 diabetes, Dr. Douglas Loe, managing director and analyst at Leede Financial Inc., reported in a Jan. 9 Week In Review note. Leede has a Speculative Buy rating and a CA$1.50 per share target price on this Toronto, Canada-based medical technology developer.

This year is expected to be "a seminal financial period for the firm's type 1 diabetes/islet transplantation clinical initiatives," Loe wrote.

Sernova's ongoing clinical trial, taking place at the University of Chicago, is a Phase 1/2 trial involving islet transplantation via Cell Pouch in type 1 diabetes patients. Now, in the final cohort of this trial, Sernova is enrolling patients who will receive a larger Cell Pouch with a greater number of cell reservoir channels. With this version, more islets may be implanted than with its smaller counterpart.

Data, already in the public domain, showed impressive insulin independence in patients undergoing islet transplantation via the Cell Pouch and that the Cell Pouch can support islet function in a well-vascularized, minimally fibrosed, subcutaneously implanted environment.

"In our view, this [University of Chicago] trial long ago established all of the functionality that we expect of Cell Pouch in the transplantation/regenerative medicine continuum, and our own attention is shifting to other initiatives," Loe wrote.

Trial Using AT-1501

One of these is Sernova testing the utility of tegoprubart/AT-1501 as an immunosuppressive agent in Cell Pouch/transplantation patients. This is being done in a separate three-patient cohort as part of the same University of Chicago trial. Results are expected later this year.

AT-1501, an anti-CD40L monoclonal antibody, was developed by Sernova partner Eledon Pharmaceuticals Inc. (ELDN:NASDAQ), headquartered in California. As described in a Nature Medicine article last year, the agent performed well in a porcine heart xenotransplantation procedure. In initial human clinical testing last year, the drug reportedly did not cause the adverse effects other immunosuppressive agents do: nephrotoxicity (as with cyclosporine A/Sandimmune) and blood glucose dysregulation (as with tacrolimus/Prograf). In fact, Loe noted, the reason for developing a next-generation immunosuppressant agent was to mitigate these effects.

Trial Using iBeta Islets

Also, Sernova plans a Phase 1/2/3, type 1 diabetes/islet transplantation study using Cell Pouch and partner Evotec SE's (EVO:NASDAQ) stem cell-derived iBeta islets instead of the cadaver-derived islets being employed in the University of Chicago study. First, though, Evotec must work out the scale-up manufacturing logistics for producing its iBeta islets, which it likely will do, Loe noted. At this point, it is unknown whether Evotec or Sernova's University of Chicago collaborators would be the trial's lead investigators. Leede Financial expects additional details in the coming months.

Capital Needed

Loe pointed out that Sernova needs capital to sustain its ongoing Cell Pouch development work and that Leede believes the biotech company can secure it from various investor or philanthropic sources in the coming months. This is because abundant evidence exists that proves Cell Pouch's efficacy and safety, generated during previous testing of the implantable bio-hybrid organ in islet transplantation for type 1 diabetes, thyroid cell transplantation for thyroid disease, and endothelial cell transplantation for hemophilia A.

"We stand by our view that Cell Pouch, or next-generation manifestations of same, will in time be seen as indispensable for sustaining biological activity of regenerative therapies deployed within it," added Loe.