CRISPR Therapeutics A.G. (NASDAQ: CRSP) shares dipped on Monday after the company announced a collaboration with ViaCyte focused on the discovery, development and commercialization of gene-edited allogeneic stem cell therapies for the treatment of diabetes.

Clinical data with islet transplants have indicated that beta-cell replacement approaches may offer curative benefit to patients with insulin-requiring diabetes. ViaCyte has pioneered the approach of generating pancreatic-lineage cells from stem cells and delivering them safely and efficiently to patients.

PEC-Direct, ViaCyte’s lead product candidate currently being evaluated in the clinic, uses a non-immunoprotective delivery device that permits direct vascularization of the cell therapy. This approach has the potential to deliver durable benefit; however, because the patient’s immune system will identify these cells as foreign, PEC-Direct will require long-term immunosuppression to avoid rejection. As a result, PEC-Direct is being developed as a therapy for the subset of patients with type 1 diabetes at high risk for acute complications.

CRISPR’s gene editing offers the potential to protect the transplanted cells from the patient’s immune system. The speed, specificity and multiplexing efficiency of the CRISPR system make it ideally suited to this task.

Ultimately, the combination of ViaCyte’s stem cell capabilities and CRISPR’s gene editing capabilities has the potential to enable a beta-cell replacement product that may deliver durable benefit to patients without triggering an immune reaction.

Samarth Kulkarni, Ph.D., CEO of CRISPR, commented:

We believe the combination of regenerative medicine and gene editing has the potential to offer durable, curative therapies to patients in many different diseases, including common chronic disorders like insulin-requiring diabetes.  ViaCyte is a pioneer in the regenerative medicine field, and has built a compelling clinical program, robust manufacturing capabilities, and assembled a strong intellectual property position.  Partnering with ViaCyte will allow us to accelerate our efforts in regenerative medicine, an area that we believe will provide a variety of longer-term opportunities for our company.

Shares of CRISPR were last seen down about 8% at $50.84, with a consensus analyst price target of $66.93 and a 52-week trading range of $16.16 to $73.90.

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