Novo Nordisk will pay Asterias $2 million to lease a facility in Fremont, California for the supply of stem cell-based therapies. An manufacturing tech licensing deal is also an option.

Danish drugmaker Novo Nordisk intends to set up manufacturing capabilities for its clinical phase stem cell therapies for type 1 diabetes and other chronic diseases from 2019 onwards after subleasing the plant in California from Asterias Biotherapeutics.

The 44,000 square feet current good manufacturing practices (cGMP) facility is used as a laboratory and production facility for pluripotent stem cells, including human embryonic stem cells (hESC).

Asterias will sub-let part of the Fremont, CA facility back from Novo Nordisk until the end of 2021. Image: iStock/viking75

Under terms of the deal Asterias will sub-let certain manufacturing, lab and office space back until the end of 2021.

“This transaction strengthens our balance sheet by approximately $2 million and reduces our fixed costs by approximately $1 million annually over the next several years while still providing access to important manufacturing, lab, and administrative space that we need in order to continue to advance our clinical programs over the next few years,” said Michael Mulroy, CEO of Asterias.

The $2 million payment will also bring Novo Nordisk an option to license certain Asterias intellectual property related to culturing pluripotent stem cells, including the firm’s hESCs in suspension. The method maximizes the production capacity inside a cell culture vessel allowing for bulk proliferation of hESCs, Asterias claims, providing a more efficient and cost-effective manner to facilitate commercial production of products for use in human therapies.

“Our ambition is to develop stem cell-based therapies for a range of serious chronic diseases where we see significant unmet medical need,” said corporate vice president and head of Stem Cell Research & Development (R&D) at Novo Nordisk Jacob Sten Petersen.

“The reliable, large-scale supply of therapies is a vital component in our efforts, so I am delighted that we have established this facility that further demonstrates our strong commitment to this field.”

The news comes months after Novo Nordisk expanded its interest in stem cell-based therapies through an exclusive collaboration with the University of California San Francisco (UCSF). Under terms of that deal, the firm licensed hESC production tech and teamed up on a GMP laboratory at UCSF aimed at deriving cell lines that are expected to define a new quality standard in production of stem cell-based therapies.