The Business of Biofabrication

The recent retreats by major pharmas such as Novo Nordisk, which exited cell therapy entirely, and the shutdown of encapsulated islet programs elsewhere, have sent shockwaves through the Type 1 diabetes cell therapy field. In contrast, Vertex appears to be doubling down—not walking away. That divergence in strategy reveals where the science, and the business model, are both shifting.

Novo Nordisk’s Exit and What It Signals

In October 2025, Novo Nordisk announced the closure of its entire cell therapy division, including its Type 1 diabetes program. The restructuring, led by new CEO Maziar Mike Doustdar, eliminated roughly 250 positions in that unit as part of a broader plan to save $1.3 billion annually by 2026. The move also included winding down programs in Parkinson’s disease and heart failure, alongside a $598 million divestment in cardiac cell therapy work.

While the headlines pointed to corporate efficiency, the underlying cause was scientific stagnation. Novo’s encapsulated and barrier-based approaches faced the same biological roadblocks that have constrained the field for two decades—immune rejection, poor vascularization, and limited nutrient exchange. These challenges have kept most cell therapies from achieving long-term function or commercial viability.

Novo’s choice to exit reflects a pragmatic business shift toward its enormously profitable GLP-1 drug portfolio, where efficacy, scalability, and returns are proven. It’s a reminder that even a science-driven company will follow margins when the translational math doesn’t add up.

For the biofabrication ecosystem, Novo’s retreat marks both an ending and an opening. It clears space for smaller players willing to rethink immune isolation altogether and focus instead on tissue-level integration—vascularized, ECM-based systems that work with, not against, host biology.

Retiring VX-264: Lessons from the Encapsulation Approach

Vertex’s discontinuation of VX-264—the encapsulated islet device that once promised a “no immunosuppression” cure—was a quiet but crucial moment for the field. The company’s internal review found that, while the device provided safety and partial engraftment, it failed to deliver sufficient insulin output to normalize glucose levels. The underlying issue echoed Novo’s: encapsulation protects cells but starves them of oxygen and vascular access.

By shelving VX-264, Vertex effectively closed the book on first-generation encapsulation as a curative strategy for Type 1 diabetes. The company’s decision to concentrate resources on VX-880, a program that accepts immunosuppression but achieves full physiological performance, represents a shift from theoretical perfection to functional realism. Rather than trying to engineer total immune invisibility, Vertex is betting on making stem-cell-derived islets work now—and iterating from there.

What’s the Current Status of VX-880 (Zimislecel)?

Vertex’s VX-880 has shown some of the strongest human data yet for a stem-cell-derived islet therapy. In June 2025, the company reported that all 12 patients in its Phase 1/2 FORWARD trial achieved engraftment and glucose-responsive insulin production within 90 days. Most reduced or eliminated insulin use entirely, maintaining HbA1c < 7% and > 70% time-in-range. At one year or more of follow-up, all patients remained free of severe hypoglycemia, and ten stayed insulin-independent.

With RMAT, Fast Track, and PRIME designations in place, Vertex is expanding the program into a pivotal Phase 3 trial, aiming for completion in 2025 and filing in 2026. The company has consolidated its pipeline around Zimislecel as its flagship program, with earlier-stage work continuing on immune-evasive and gene-edited islets.

Why Vertex Persists — The Strategic Logic

Vertex’s persistence reflects both data and discipline. The company has proof of concept that stem-cell-derived islets can survive and function long term in humans; a tightly defined patient population with high unmet need; and regulatory momentum that accelerates its path to market. Concentrating capital on VX-880 rather than spreading resources across experimental modalities is a deliberate, conviction-based move.

Even if immunosuppression remains necessary, success would validate the broader stem-cell platform—opening the door to next-generation, hypoimmune versions later. For a company that has mastered the economics of cystic fibrosis therapy, the calculus is clear: lead with what works, then scale.

Risks, Pressures, and Open Questions

The hurdles are substantial. Lifelong immunosuppression carries infection and toxicity risks that limit broad adoption. Long-term durability must still be proven, and manufacturing consistency at clinical scale remains a core challenge. Competitive risk also looms: any immune-evasive or vascularized graft technology that eliminates systemic drugs could quickly leapfrog VX-880.

Still, Vertex’s willingness to advance a working therapy, rather than chase the idealized “device-protected cure,” gives it near-term momentum and investor credibility in a space where few programs have survived the translational valley.

About Vertex

Founded in 1989 and headquartered in Boston, Vertex Pharmaceuticals built its success in small-molecule precision medicine, notably with its cystic fibrosis franchise. Over the last decade, it has expanded into cell and genetic therapies, applying its manufacturing and regulatory expertise to high-impact indications like Type 1 diabetes, pain, and sickle-cell disease. Its approach to VX-880 exemplifies the company’s model—measured risk-taking rooted in strong data and operational execution.

About Novo Nordisk

Novo Nordisk, based in Bagsværd, Denmark, is one of the world’s largest biopharmaceutical firms and the dominant player in diabetes and obesity treatment. Its GLP-1 agonists—Ozempic, Wegovy, and Rybelsus—have transformed metabolic medicine and corporate growth alike. The company’s withdrawal from cell therapy underlines a strategic return to its core strengths: scalable peptide biologics and metabolic indications with high margins and predictable manufacturing.