Implants containing specially wrapped insulin-producing cells derived from embryonic stem cells can regulate blood sugar in mice for several months, according to research presented this month at the International Society for Stem Cell Research conference in San Francisco. San Diego-based ViaCyte (formerly Novocell), which is developing the implant as a treatment for type 1 diabetes, is now beginning the safety testing required for approval from the U.S. Food and Drug Administration before human testing can start.

“It’s still a long road toward a treatment for diabetes, but in my mind they have made astonishing progress,” says Gordon Weir, head of Islet Transplantation and Cell Biology at Joslin Diabetes Center, in Boston. But he cautions that taking the next step is likely to be tricky. The technology “tends to work well in rodents, but moving it to larger animals gets more complicated,” says Weir, who is not involved with the company. “You need more cells, and we’re guessing the immune system [reaction] is more complex.”

In type 1 diabetes, the immune system attacks the insulin-producing beta cells of the pancreas, forcing patients to rely on injections of the hormone to regulate blood sugar. Transplants of pancreatic cells from cadavers to human patients have shown that this type of cell therapy can free type 1 diabetics from daily insulin injections. But the scarcity and variable quality of this tissue makes it an impractical therapy. For the last two decades, scientists have searched for alternative sources of cells, focusing in large part on cells from the pancreas of fetal or neonatal pigs. ViaCyte, which began its efforts more than 10 years ago, has focused on embryonic stem cells.

The research exemplifies the challenges of creating cell replacement therapies from embryonic stem cells. No such treatments yet exist and only one company has won FDA approval to begin human testing. That effort was put on hold last year due to safety concerns.

After years of research, ViaCyte developed a recipe capable of transforming embryonic stem cells into immature pancreatic cells, called progenitors. The recipe is a combination of three small molecules and five proteins, and it attempts to replicate what cells would experience in the developing embryo.

But scientists haven’t yet been able to create fully “differentiated” beta cells in a dish. This is important because undifferentiated cells carry risk of turning cancerous. In a paper published in 2008, the company showed that transplanting the pancreatic progenitors into mice pushed these cells to fully differentiate inside the animal, enabling them to regulate blood sugar.

However, in some cases, the cells formed clumps of cancerous tissue called teratomas, a major safety concern with stem cell therapies. So in the new experiments, the scientists encased the cells in tea-bag like membrane. “Encapsulation protects cells from getting killed by the immune system and would contain teratoma cells,” says Weir. Encapsulation also allows the cells to be removed, if needed, says Kevin D’Amour, a principal scientist at Viacyte who presented the research.

The inner layer of the membrane is small enough to prevent the cells from leaking out, but the outer layer is large enough to encourage blood vessels to grow along the membrane. The implanted cells need access to blood in order to sense and respond to changes in blood sugar, as well as to deliver the oxygen the cells need to survive.

While encapsulation protects the cells, it also introduces its own problems. “One of the fundamental challenges has been to identify materials that don’t cause fibrosis, or scar tissue around material,” says Dan Anderson, a chemical engineer at MIT. “That’s particularly important here because [fibrosis] can starve cells of oxygen and inhibit their ability to respond to glucose.” The company is currently using a prototype membrane from a company called Theracyte, but it is also working on its own customized version.

In the new research, scientists showed that animals whose own insulin producing cells were chemically destroyed could survive with the implant. “They have been completely controlled by the human graft for four months,” says D’Amour. In fact, while mice typically have a higher resting blood glucose level than do humans, the animals with human insulin-producing cells had glucose levels that more closely resemble those of humans.

ViaCyte still has a number of issues to solve before its device can be tested in patients. It’s not clear how the human immune system will react to the implants, an issue that ViaCyte is studying in collaboration with scientists at the University of California, San Francisco. For example, while the membrane is designed to protect the cells, patients may still require immunosuppressive drugs. Or the cells within the device may need to be tissue-matched to the recipient, much like whole organ transplants.

Living Cell Technologies, headquartered in Australia and New Zealand, has ongoing human tests of encapsulated pancreatic cells derived from pigs in Russia and New Zealand. While the results of the studies have not yet been published, reports from the company based on a small number of patients say the treatment so far appears safe and patients do not require immunosuppressant drugs.