In an exciting step forward in type 1 diabetes (T1D) research and development and for people with T1D, on September 3, 2019, Semma Therapeutics agreed to be acquired by Vertex for $950 million, the largest transaction ever in a T1D cure-based therapeutic program. The T1D Fund, Breakthrough T1D’s innovative venture philanthropy fund provided a catalytic investment in Semma in early 2017.

Semma was formed in 2015 to commercialize the ground-breaking research of Douglas Melton, Ph.D., who set out with the support of Breakthrough T1D in 2000 to make beta cells from human-derived stem cells. The formation of the company allowed Dr. Melton and his team to attract a round of venture capital to drive the work into commercial solutions for people with T1D.

The T1D Fund was launched late in 2016 to catalyze an investment market in T1D. The research results in the decade before its launch were encouraging, but capital investment in companies working toward a cure was sorely lacking. Breakthrough T1D knew it had to work to change this and make the case to investors and industry to invest in our fight. With a substantial seed commitment from Breakthrough T1D, the T1D Fund hired an investment team and has raised (to date) more than $75 million in capital from donors.

Semma was one of the first companies the T1D Fund contacted. The progress at the new company was extremely positive, and the company would need additional funds to prove that it could manufacture beta cells at massive scale consistently and continue to develop a method to deliver those cells to people with T1D safely and without rejection. The T1D Fund made a critical and timely investment in Semma in early 2017 to bridge the company to its next large venture round, completed later that year.

The Fund’s investment in Semma was a signal to the broader investment community that Breakthrough T1D not only supported the underlying research but also was willing to risk significant capital in its commercialization. Because most venture capital firms have never made a T1D investment, this endorsement was critical.   Just as importantly, the Fund’s investment gave the young company full access to the resources of Breakthrough T1D, especially the regulatory expertise that it would need in this important next phase.

Vertex is best known as the company that had worked with the Cystic Fibrosis Foundation to develop the first medicines to treat the underlying cause of cystic fibrosis (CF), a rare, life-threatening genetic disease, and its pioneering drug won FDA approval in 2012. It has now chosen T1D as a new area of focus.

The T1D Fund will receive a significant return on its investment, and those funds will all be reinvested in other exciting commercial opportunities focused on T1D. To date, the Fund has invested over $30 million in 16 companies. Donors to the Fund now will see their contributions and impact multiply.

“This is a major milestone in our fight to cure type 1 diabetes, in two respects,” said Sean Doherty, the Executive Chairman of the T1D Fund. “First, a terrific company like Vertex has the resources and expertise to achieve Dr. Melton’s vision, which Breakthrough T1D shared and supported for many years. Second, we think that investors and industry will take notice of such a substantial value placed on promising type 1 diabetes therapies and look for opportunities to invest in other type 1 diabetes efforts in a new, developing market.”

Added Aaron J. Kowalski, Ph.D., Breakthrough T1D President and CEO, “We are thrilled to see great research gain massive commercial investment from a major biopharma company. Our goal at Breakthrough T1D is to identify and provide end-to-end support for great research from the most basic stage to commercial development, and most importantly to reach people and ultimately find cures for this disease. The T1D Fund is a great new weapon in our arsenal.”