Microencapsulation of living cells to treat diabetes? Austrianova validates commercial potential of its proprietary encapsulation technology.


WEBWIRE – Tuesday, August 29, 2006

Austrianova Biotechnology has successfully demonstrated the feasibility of encapsulating an insulin-producing cell line in cellulose sulphate on the basis of its proprietary encapsulation technology. A new study published by an academic partner - a clinical research group at the Medical University Graz, Austria - in the scientific journal “Xenotransplantation” (1) demonstrates that the microencapsulated cells do not differ in glucose-dependent cell proliferation, insulin secretion or glucose uptake from non-microencapsulated cells.

For Austrianova, this study is a valuable basis for further product developments outside the Company’s core focus of oncology. It validates its proprietary technology by demonstrating that it is well suited for microencapsulation of any type of living cells. In clinical studies of its reference product, NovaCaps®, which is the first encapsulated cell product targeting difficult to treat solid tumours, no adverse events related to the delivery of the capsules were noted. The microencapsulated cells have also been shown to stay active and survive for several months. Austrianova is the only company worldwide to have an IP protected industrial GMP production line for the encapsulation of living cells in cellulose sulphate with an easy upgradeable capacity of 36 000 vials a year which allows the facile yet reproducible manufacture of other follow-on encapsulated cell products at industrial scale.

Major benefit: autoregulation of insulin production
This innovative approach opens up new and very promising medical options for the treatment of type 1 diabetes: Insulin substitution could be achieved by transplanting microencapsulated cells producing insulin. Up to 1.2 million people worldwide are affected by diabetes mellitus type 1, an autoimmune disease destroying pancreatic islet cells. Despite intensive insulin substitution about one third of all patients suffers from poorly controlled blood glucose levels and will most probably develop long-term diabetic complications. Encapsulated insulin-producing cells will react to the physiological stimuli of blood sugar levels, essentially mimicking the natural regulation of insulin levels. Thus, diabetes could be relieved of the current problematic dosing issues. As a further advantage, the transplanted encapsulated cells are effectively protected from attacks by the immune system so that rejection of the cells does not occur, thus there is no need to use immune-suppressive drugs.

Advantages of cellulose sulphate in cell encapsulation
„We are excited by this data since it provides yet another example of the suitability of cellulose sulphate for encapsulated cell products“, says Brian Salmons, Managing Partner for Science and Technology. Cellulose sulphate is ideal for encapsulation of cells since it produces robust capsules that show excellent biocompatibility, with no signs of inflammation upon their implantation. Austrianova has been able to successfully address the issues that hampered the successful clinical and commercial application of cell encapsulation by developing a novel manufacturing process for cellulose sulphate which resulted in material with superior properties as compared to conventional cellulose sulphate available on the market. The Company’s encapsulation technology has been optimized so that all components and production steps are standardized and of reproducible quality.

Further advances in development
Austrianova is convinced that implantation of encapsulated cells has the potential to treat a wide variety of chronic or genetic diseases such as peripheral vascular diseases or haemophilia. The company is already negotiating with biotech and pharmaceutical companies to co-develop encapsulated cell products to treat diabetes. „This validates the versatility and thus the commercial potential of our encapsulation technology“, states Thomas Fischer, Managing Partner for Finance and Administration. The overall market for diabetes products is expected to increase to almost € 14.5 billion by 2007 and the growth potential of the diabetes type 1 market is estimated to 5 – 6 percent.

(1)Stadlbauer, V., Stiegler, P.B., Schaffellner, S., Hauser, O., Halwachs, G., Iberer, F., Tscheliessnigg, K.H. and Lackner, C. (2006) Morphological and functional characterization of a pancreatic ß cell line microencapsulated in sodium cellulose sulfate/poly(diallyldimethylammonium chloride). Xenotransplantation 13:337-344.

Background information:

About Austrianova Biotechnology
Austrianova was founded in 2001 as the first spin-off from the University of Veterinary Medicine in Vienna, Austria and has a staff of 32 FTE and access to another 30 FTEs in R&D from its academic partner, the research institute for Virology and Biomedicine, Vienna. Austrianova’s core strategy is to develop proprietary delivery technologies in orphan niche indications in the oncology sector and has developed a unique and versatile cell encapsulation technology that can be applied to a wide range of therapeutic applications. The capsules which show a high mechanical resistance, have adjustable pore sizes and are biocompatible, act both to immunoprotect cells and to restrain them on the site of application whilst allowing them excellent access to nutrients and other factors required for their long term survival in a patient. As of today, Austrianova is the only company worldwide to have an IP protected GMP industrial production line for the encapsulation of living cells in cellulose sulphate. This unique asset will enable the company to rapidly bring its reference clinical product NovaCaps® to market and diversify the commercialisation of its primary delivery technology into other non-orphan indications.

About NovaCaps®
Austrianova’s reference product is the first encapsulated cell product targeting difficult to treat solid tumours (NovaCaps® -Oncology). NovaCaps® - Oncology consists of genetically modified encapsulated living cells that, when implanted in close proximity to a solid tumour, enable local conversion of a prodrug into its active, cytotoxic form. Thus, NovaCaps® - Oncology significantly increases the locally available amount of active anti-cancer drug directly in the tumour tissue, whilst reducing the unpleasant and detrimental side-effects of chemotherapy. NovaCaps® - Oncology has received Orphan Drug Designation from the EMEA in the indication of pancreatic cancer. NovaCaps® Oncology - Pancreas is now entering pivotal phase III trials in Europe with a possible market launch is scheduled in the EU for 2009.



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Susanne Bach
Public & Investor relations
Austrianova Biotechnology
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