NZ diabetes company rescued by Japanese cash

Living Cell provides pig cell transplants to help diabetics. Photo / Thinkstock

The Auckland maker of a revolutionary diabetes therapy, Living Cell Technologies, has been rescued from closure by a $32.1 million Japanese injection.

Living Cell, producer of pig-cell transplants which in clinical trials have helped some type 1 diabetics reduce or forgo insulin injections, was running out of cash and facing closure within months.

"The balance sheet told you the company was going to go out of existence at around Christmas-time,'' said acting chief executive Professor Bob Elliott.

But in a move announced to the Australian Stock Exchange today, the company has been saved by Otsuka Pharmaceutical Factory, part of a large Japanese group whose products include sports drinks, cancer drugs and intravenous solutions.

Otsuka, already an investor in Living Cell, is contributing $A25 million (NZ$32.1 million) for a half share of the diabetes project, which the two companies will own as a joint venture.

"Living Cell Technologies will continue to service the joint venture for the diabetes treatment, but will be increasingly able to accelerate its Parkinson's [disease] treatment programme,'' said Professor Elliott.

"The $A25 million ($32.1 million) will mostly be spent in New Zealand over the next three years and represents a six-fold return to New Zealand on the NZ Government's investment in LCT [of] about $A4 million (NZ $5.14 million).''

"The purpose of the joint venture is to bring the diabetes treatment to being available for treatment rather than clinical trials.''

Up to three years of further refinement of the transplant product and dosing schedules is required before seeking registration from New Zealand's medical regulator Medsafe to allow use of the cross-species transplants as an established procedure.

Clinical trials have been run successfully in Russia and Auckland using the specially-coated insulin-producing pancreatic cells from the company's piglets, and a third has started in Argentina. Several more trials are planned to start next year.

It is estimated that 15,000 people in New Zealand and 20 million worldwide have type 1 diabetes, an auto-immune disease.