For more than a century, insulin has transformed type 1 diabetes from an almost invariably fatal disease into a manageable chronic condition. Pumps, continuous glucose monitors and automated insulin delivery systems have made that management increasingly sophisticated.
But none replaces what the disease destroys: the insulin-producing cells of the pancreas.
A growing field of biotechnology companies is now trying to do exactly that.
The emerging strategy, known broadly as islet cell replacement therapy, seeks to restore the body’s ability to produce insulin by replacing the pancreatic islet cells lost to type 1 diabetes. Recent clinical results have provided some of the strongest evidence yet that the fundamental concept works. At the same time, advances in stem-cell manufacturing, immune modulation and gene engineering are beginning to address the obstacles that historically prevented islet transplantation from becoming a broadly available treatment for the type 1 diabetes population.
A merger announced Tuesday between Sernova Biotherapeutics (TSX:SVA) and Seraxis Holdings (private) provides the latest example of how the field is evolving. The companies plan to combine to form BetaNova Biotherapeutics, bringing together stem-cell-derived pancreatic islets, scalable manufacturing, an implantable cell-delivery platform and next-generation approaches with and without immune protection.
The transaction comes amid accelerating development across the industry, including programs from Vertex Pharmaceuticals, Sana Biotechnology, Century Therapeutics, Eledon Pharmaceuticals and NewcelX.
Taken together, the activity raises an increasingly serious question: Is type 1 diabetes moving toward a functional cure that can eventually be manufactured at scale?
The Biology Has Already Shown It Can Work
Type 1 diabetes occurs when the immune system destroys the insulin-producing beta cells contained within pancreatic islets. Without those cells, patients must continuously replace the insulin their bodies can no longer produce.
Replacing the missing insulin-producing cells is therefore an unusually direct therapeutic concept.
Traditional islet transplantation has already demonstrated that transplanted cells can restore insulin production. In 2023, the FDA approved Lantidra, a therapy made from pancreatic islets isolated from deceased donors, for a limited group of adults with type 1 diabetes experiencing recurrent severe hypoglycemia despite intensive management.
In clinical studies supporting Lantidra, 21 of 30 treated patients achieved insulin independence for at least one year, including 10 who remained insulin independent for more than five years.
That was an important validation of the biology.
It was not, however, the scalable solution researchers ultimately want.
Donor-derived islets are constrained by the availability of deceased-donor pancreases. Recipients also generally require chronic immunosuppressive drugs to prevent rejection of the transplanted cells, exposing otherwise healthy patients to potentially serious long-term risks.
Those two limitations — cell supply and immune rejection — now define much of the race in type 1 diabetes cell therapy.
Stem Cells Change the Supply Equation
Stem-cell technology potentially solves the first problem.
Instead of relying on donated organs, companies can begin with stem cells capable of reproducing extensively and then differentiate them into pancreatic islet cells. In principle, that creates a renewable manufacturing source capable of producing standardized, off-the-shelf therapies.
There is now meaningful human evidence that those cells can work.
Vertex Pharmaceuticals’ (NASDAQ: VRTX) Zimislecel, formerly known as VX-880, is currently the most advanced stem-cell-derived islet program in the field. In previously reported Phase 1/2 results, all 12 patients receiving a full dose demonstrated engraftment and glucose-responsive insulin production. Ten of the 12 were no longer using exogenous insulin after one year, while all 12 achieved recommended HbA1c and time-in-range targets and experienced no severe hypoglycemic events after Day 90. The results were published in the New England Journal of Medicine.
Vertex is continuing to enroll and dose patients in its Phase 1/2/3 study in 2026.
The importance of that program extends beyond Vertex itself. It has provided clinical evidence that fully differentiated pancreatic islet cells manufactured from stem cells can restore physiological insulin production in humans.
The catch is that Zimislecel still relies on conventional immunosuppression.
That leaves the industry’s second major problem unresolved.
BetaNova Combines the Pieces
That challenge helps explain the rationale behind the newly announced combination of Sernova and Seraxis.
After the merger closes, expected in November, shareholders of each company are expected to own about half of BetaNova. The company also secured commitments for a $10 million financing intended to advance its initial development programs.
Seraxis brings SR-02, an allogeneic stem-cell-derived pancreatic islet product, together with in-house cGMP manufacturing capabilities designed to produce cells at clinical scale.
Sernova contributes its Cell Pouch Bio-hybrid Organ, an implantable and retrievable device designed to provide an environment where therapeutic cells can engraft, vascularize, survive and function. Sernova has already completed patient treatment and follow-up in a Phase 1/2 study using the device with donor-derived pancreatic islets. According to the company, it met all primary and secondary endpoints.
BetaNova intends to combine those technologies.
SR-02 is expected to enter a Phase 1/2 study in the first quarter of 2027 under an FDA-cleared IND, with initial data anticipated by midyear.
A second program, SR-03, takes the strategy one step further by incorporating gene edits intended to allow the transplanted islets to evade immune destruction. BetaNova expects to submit an IND for SR-03 in the second half of 2027.
In other words, the merger brings several of the pieces required for a scalable therapy under one roof: a renewable cell source, controlled manufacturing, a clinically tested implantation platform and an immune-evasion strategy.
Eledon Attacks the Immune Problem From a Different Direction
Not every company believes the cells themselves need to be invisible to the immune system.
Eledon Pharmaceuticals (NASDAQ: ELDN) is developing tegoprubart, an investigational anti-CD40L antibody designed to modulate a critical pathway involved in immune activation.
Results from an investigator-sponsored study at the University of Chicago have attracted particular attention. Twelve patients with type 1 diabetes received donor-derived pancreatic islet transplants while using a tegoprubart-based, calcineurin inhibitor-free immunosuppression regimen.
As of June 2026, all 12 patients had achieved insulin independence, all had HbA1c levels below 6.5%, and none had experienced severe hypoglycemic episodes following transplantation. The patients had entered the study with histories of recurrent severe hypoglycemia.
That study does not solve the supply problem. The islet cells still come from donors, but it may provide another piece of the scalability puzzle: a more favorable way to protect transplanted cells.
Eledon has since moved toward a registrational pathway. On September 3, the company announced that it had submitted an IND for its first company-sponsored study of tegoprubart in patients with type 1 diabetes undergoing islet transplantation.
That same announcement pointed to a broader ambition. Eledon reaffirmed that it remains on track to initiate LEGACY, a global Phase 3 trial of tegoprubart in kidney transplantation, in the fourth quarter of 2026, following a successful End-of-Phase 2 meeting with the FDA. LEGACY is expected to enroll approximately 600 patients, with a primary endpoint of non-inferiority to tacrolimus at 52 weeks on a composite of biopsy-proven acute rejection, graft loss and death. Eledon has also reported first patients dosed with tegoprubart under compassionate-use protocols in highly sensitized kidney transplant recipients and in islet-transplant recipients with calcineurin-related kidney dysfunction, alongside an investigator-initiated tolerance-induction study at Massachusetts General Hospital.
Taken together, that pipeline suggests Eledon is no longer positioning tegoprubart as a single-indication kidney transplant drug. It is increasingly framed as a platform immunosuppressant intended to compete with calcineurin inhibitors as first-line therapy across kidney and islet transplantation alike.
That clinical progress stands out next to how the private market is pricing an earlier-stage rival chasing the same broad opportunity. LifeMine Therapeutics (private) is developing LIFE-001, a calcineurin activation inhibitor aimed at replacing tacrolimus and cyclosporine across transplantation generally, but has not yet begun the Phase 2 kidney or Phase 1b islet studies that would put it on comparable clinical footing with Eledon.
Yet according to PitchBook, LifeMine’s August Series E, led by Milky Way Investments Group with new investors Bezos Expeditions, Gates Frontier and RA Capital Management, closed at a $700 million post-money valuation, roughly three times Eledon’s public market capitalization of approximately $240 million-$250 million. The comparison is not a clean one: LifeMine’s figure prices preferred shares carrying a 1x participating liquidation preference and weighted-average anti-dilution protection, terms that can support a higher headline valuation than a common-equity holder would assign the same business, so it is not directly comparable to Eledon’s common-stock market cap.
Even so, the gap is notable: a private company with no islet-transplant data of its own has been valued well above a Nasdaq-listed company that already has 12-patient investigator-sponsored islet results, a submitted IND for a company-sponsored islet study, and a global Phase 3 kidney trial about to begin. For investors, that disconnect is one lens for weighing whether Eledon’s public valuation fully reflects its clinical progress.
Readers can find equity research coverage on Eledon’s Channelchek research page.
NewcelX Pairs Stem-Derived Islets With Tegoprubart
NewcelX is developing another approach combining a renewable source of islet cells with Eledon’s immune-modulation strategy.
Its lead diabetes candidate, NCEL-101, is an enriched stem-cell-derived islet product generated using the company’s human pluripotent stem-cell platform. NewcelX describes the platform as capable of scalable expansion and controlled differentiation, with the broader objective of producing off-the-shelf allogeneic cell therapies.
Earlier this year, NewcelX and Eledon established a collaboration to develop NCEL-101 in combination with tegoprubart.
In July, NewcelX announced that it had completed a Type B pre-IND meeting with the FDA and received feedback supporting its proposed development pathway toward a first-in-human trial of the combination.
The strategy is notable because it attempts to combine two approaches that have independently accumulated supportive evidence: stem-cell-derived islets as a renewable source of insulin-producing cells and tegoprubart as an alternative immune-protection strategy.
It is still early. NCEL-101 has not yet produced clinical efficacy data in type 1 diabetes.
But if a stem-cell-derived product can reproduce the insulin independence seen with donor islets while using a more tolerable immune regimen, another major barrier to broader treatment could begin to fall.
Sana Is Trying to Remove Immunosuppression Entirely
Sana Biotechnology (NASDAQ: SANA) is taking a different route: engineer the transplanted cells so the immune system does not recognize them as foreign.
Its hypoimmune, or HIP, platform makes genetic modifications intended to allow transplanted cells to evade immune detection.
The company has already obtained an important early human signal.
In an investigator-sponsored study at Uppsala University Hospital, pancreatic islets modified with Sana’s HIP technology were transplanted into a patient with type 1 diabetes without immunosuppressive therapy.
At 14 months, the cells remained detectable and functional, producing C-peptide — evidence that the transplanted beta cells continued to secrete insulin. Sana reported no identified safety issues, and the follow-up findings were subsequently published in the New England Journal of Medicine.
There is an important distinction: this was a single patient, and the treatment has not yet demonstrated the broad insulin independence seen in larger islet-transplant studies.
But scientifically, the finding matters.
It provides early human evidence that genetically modified islet cells may survive and function for more than a year without systemic immunosuppression.
Sana is now translating that technology into SC451, a hypoimmune-modified, stem-cell-derived pancreatic islet therapy intended to combine an expandable cell source with the immune-evasion properties demonstrated by the earlier donor-derived cells. The company has been progressing toxicology, manufacturing transfer and clinical readiness activities toward a Phase 1/2 study.
If successful, that combination would attack both fundamental barriers simultaneously.
Century Is Designing Immune Evasion Into the Product
Century Therapeutics (NASDAQ: IPSC) is pursuing a similar objective through its iPSC platform.
Its lead diabetes program, CNTY-813, is an iPSC-derived islet replacement therapy incorporating Century’s Allo-Evasion technology, which is designed to help transplanted cells avoid immune rejection without requiring conventional immunosuppression.
At the American Diabetes Association’s 2026 Scientific Sessions, Century reported preclinical results showing durable glucose control for more than eight months in animal models, continued insulin secretion under allogeneic immune pressure and successful manufacturing at clinical scale.
Century completed a pre-IND meeting with the FDA and, as of August, remained on track for an IND submission in the fourth quarter of 2026. Initial clinical data are expected in the second half of 2027.
Like BetaNova’s SR-03 and Sana’s SC451, CNTY-813 represents the emerging second generation of the field: not merely replacing beta cells, but engineering the replacement cells around the immune system that destroyed them in the first place.
The Four Problems a Scalable Cure Has to Solve
Together, these programs show why the phrase “cure for type 1 diabetes” needs qualification.
Researchers increasingly use the term functional cure: restoring sufficient natural insulin production to achieve durable glucose control and potentially eliminate exogenous insulin, even though the underlying predisposition toward autoimmune disease may still exist.
The concept itself now has considerably more evidence behind it than it did only a few years ago.
What remains uncertain is whether it can become scalable.
Cell source. There must be enough high-quality insulin-producing cells to treat patients without relying on scarce donor pancreases.
Engraftment and durability. Those cells need an environment where they can receive a blood supply, sense glucose, and keep functioning for years.
Immune protection. The therapy must address both rejection of foreign cells and the autoimmune biology responsible for type 1 diabetes, ideally without requiring lifelong toxic immunosuppression.
Manufacturing. A commercial therapy ultimately must be reproducible, quality-controlled, and economical at a scale far larger than today’s transplantation programs.
Different companies are solving different portions of the equation.
Vertex has produced perhaps the strongest evidence yet that manufactured stem-cell-derived islets can restore insulin independence, but currently requires immunosuppression. Eledon’s results suggest immune modulation may make transplantation considerably more practical. Sana has shown early human evidence of immune-evasive islets functioning without immunosuppression. Century is building immune protection directly into a scalable iPSC-derived product. NewcelX is pairing stem-derived islets with Eledon’s immune-modulation approach.
And with the creation of BetaNova, Sernova and Seraxis are attempting to combine the cells, manufacturing, implantation environment, and immune strategy within a single company.
A Cure Is Not Here Yet — But the Question Has Changed
There are still substantial risks.
Several of the most ambitious programs remain preclinical or have only limited human data. Cell manufacturing is complex. Gene editing can introduce additional safety considerations. Immune-evasion technologies must demonstrate that modified cells remain safe and controllable over long periods. Devices must overcome issues including vascularization and fibrosis. And any therapy intended for otherwise healthy people living successfully with modern insulin technology will face a very high safety bar.
The field has already produced reminders of those challenges. Vertex discontinued development of its VX-264 encapsulated islet program in 2025 after the device approach failed to produce sufficient C-peptide responses, even though it was generally well tolerated.
That result illustrates how difficult it is to solve all of the biological problems at once.
But the larger trajectory is becoming harder to dismiss.
Donor islets have demonstrated that replacing the missing cells can eliminate insulin dependence. Stem-cell-derived islets have now demonstrated the ability to restore physiological insulin function in humans. Improved immunomodulation has produced insulin independence in a growing transplantation cohort. Immune-engineered islets have also survived in a human patient for more than a year without immunosuppressive drugs.
Meanwhile, multiple companies are preparing to move next-generation, scalable cell products into human trials over the coming year.
The question surrounding islet cell therapy is therefore shifting.
It is no longer simply whether transplanted cells can restore insulin production in type 1 diabetes.
Increasingly, the question is whether biotechnology can combine a renewable cell supply, reliable engraftment, and durable immune protection into a therapy that can be produced safely for thousands and eventually perhaps millions of patients. Today’s formation of BetaNova is another bet that the answer could ultimately be yes.
