Sernova (TSE:SVA) and Seraxis plan to combine to form BetaNova Biotherapeutics, a company focused on developing cell-based therapies intended to reduce or eliminate the need for external insulin in people with type 1 diabetes.
During a company presentation, Sernova CEO Jonathan Rigby said the proposed merger, announced several weeks earlier, remains subject to shareholder approval expected in December. Rigby said the companies believe they already have sufficient votes for approval.
Two Cell Programs in Development
Seraxis CEO Will Rust said the company has spent approximately 15 years developing its cell technology. Its lead program, SR-02, consists of allogeneic insulin-producing cells developed from a proprietary stem-cell source engineered from a human pancreas, according to Rust.
Seraxis said the U.S. Food and Drug Administration cleared an investigational new drug application for SR-02 in April. The company is enrolling clinical sites and expects to begin recruiting patients during the current quarter. Dosing in a Phase I/II study is planned for early next year, with initial patient data anticipated in the first half of 2027, Rigby said.
Rust said SR-02 cells are intended to produce insulin in response to glucose and were selected from a compatible donor source. Patients receiving the cells will initially require immunosuppression, he said, though the companies aim to evaluate whether that treatment can be reduced over time.
The second program, SR-03, is a gene-edited version of SR-02 designed to evade immune recognition. Seraxis is conducting IND-enabling studies and expects to file an IND for SR-03 in the second half of next year, according to Rigby.
Rust said the company’s approach to gene editing is intended to make cells more compatible without relying on the overexpression of foreign synthetic proteins. He said preclinical animal data showed antibodies against SR-02 but not SR-03, which he said appeared effectively invisible to the immune system in those models.
Cell Pouch Designed for Retrieval
A central component of the proposed combined company’s strategy is Sernova’s Cell Pouch, an implantable and retrievable device designed to house insulin-producing cells. Rust said retrievability is important because the FDA has indicated that implanted cells not requiring immunosuppression need to be removable in the event of a safety issue, including the potential risk of oncogenesis.
Sernova’s Cell Pouch has completed a Phase I/II clinical trial under an open IND, Rigby said. According to the companies, the study met its primary and secondary endpoints. In that trial, the pouch contained islets harvested from donor pancreases.
Rust said data from the study showed that implanted islets remained present and functional after five years. He said tissue analysis showed insulin-producing cells located alongside blood vessels, allowing the cells to detect glucose and release insulin.
The companies intend to pair the Cell Pouch with Seraxis’ lab-manufactured cells, seeking to create a retrievable environment for durable cell function. Rust said the goal is to establish a stable graft that could allow patients to become insulin-independent before potentially reducing or discontinuing immunosuppression.
Immune-Suppression Strategy and Upcoming Milestones
BetaNova plans to use standard-of-care immunosuppression initially to limit clinical variables, Rust said. The company also plans to evaluate newer immune-management options, including tegoprubart through a collaboration with Eledon Pharmaceuticals.
Rust said the initial SR-02 study will enroll six patients and focus first on people with severe hypoglycemic episodes that they cannot sense in advance. He said the company will monitor C-peptide, which is released alongside insulin and can serve as a measure of graft function, within months after implantation.
Rigby said the company is also preparing for a potential Nasdaq listing during the first part of next year, potentially alongside its existing Toronto Stock Exchange listing.
While the executives emphasized the potential of the programs, they also noted that further clinical data will be needed. Rigby said any future filing for a Biologics License Application would be subject to clinical results.
About Sernova (TSE:SVA)
Sernova Biotherapeutics is a clinical-stage company developing regenerative medicine therapeutics combining its Cell Pouch with human donor cells or stem-cell derived islet-like clusters in collaboration with Evotec to create bio-hybrid organs to treat T1D. A bio-hybrid organ is comprised of non-biomaterials, such as the Cell Pouch, integrated with living tissues to restore or enhance the function of a compromised organ. This innovative approach aims to deliver a potentially revolutionary treatment for patients with chronic diseases, initially focusing on T1D and thyroid disorders.
