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Vertex’s $950 Million Bet on Stem Cells to Cure Diabetes: Brainstorm Health

Good afternoon, readers. I hope you enjoyed your Labor Day. Let's get back into the thick of things.

Boston-based Vertex Pharmaceuticals didn't waste any time making an M&A splash immediately following the long weekend. The rare disease drug specialist—known for its cystic fibrosis treatments and valued at more than $45 billion—announced Tuesday that it will acquire the private biotech Semma Therapeutics for $950 million in cash.

There's nothing particularly shocking about a large, public biopharma company snapping up a smaller biotech. What makes this deal interesting, however, is the scientific gamble Vertex is taking. You see, Semma specializes in cell therapies for diabetes—specifically, stem cell-derived treatments the company hopes could, not just treat, but actually cure type 1 diabetes.

"We are excited to work with the talented scientists at Semma to build on their significant progress toward providing effective and potentially curative cell therapy options for people living with type 1 diabetes," said Vertex CEO Jeffrey Leiden in a statement.

This is some high-risk, high-reward science. And it underscores just how willing some pharma players are willing to hitch their wagons to the cell therapy space. On another note, it may be one of Leiden's last major deals as Vertex's CEO—Reshma Kewalramani will take over the chief executive reins next April.

Read on for the day's news.

Sy Mukherjee, @the_sy_guy, sayak.mukherjee@fortune.com

DIGITAL HEALTH

Speaking of stem cells… When it rains, it pours. Nature reports that a Japanese woman received stem cell therapy to fix her vision. Reprogrammed stem cells were used to repair the woman’s cornea, according to researchers from Osaka University in Japan. One month out from treatment, the results appear to be holding. (Nature)

INDICATIONS

Sanofi’s new CEO has officially taken over. As of Monday, French drug giant and diabetes specialist Sanofi has a new head honcho. Previous chief executive Olivier Brandicourt is handing over the keys to Paul Hudson, a Novartis vet who was particularly interested in growing the latter company’s investment in digital technologies for drug development. Sanofi has been on a turnaround mission after several years of falling sales in its legacy diabetes businesses. (FiercePharma)

THE BIG PICTURE

CVS takes on the teen vaping epidemic. Fortune‘s Alan Murray spoke with CVS CEO Larry Merlo on the company’s latest efforts to stem the tide of teen vaping and e-cigarettes use. “This morning, CVS is launching a new $50 million campaign to help stop teen vaping, and create the first tobacco-free generation. The rise of teen vaping ‘is something I am personally very worried about,'” Merlo tells Alan, citing a study showing “78% of school age kids who are vaping are likely to begin smoking before they finish high school.” Read the rest of Alan’s writeup in his (as usual) must-read CEO Daily column. (Fortune)

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