Nuvilex said today it acquired exclusive worldwide rights to use SG Austria’s cellulose-based live-cell encapsulation technology to develop treatments for diabetes.

Nuvilex will use $1 million of a total $1.5 million raised through a restricted stock sale toward the acquisition, following promising results from proof-of-principle studies in which the encapsulated cells were transplanted into diabetic animals.

Those results showed blood glucose levels became normalized and remained stable for the duration of a six-month study—an indication, says the company, that the encapsulated cells produced insulin in response to their higher than normal blood glucose levels. The cellulose-based capsules also appeared to have prevented the encapsulated cells from being attacked by the diabetic animals’ immune systems, even in the absence of immunosuppressive drugs, the company added.

The diabetic animals had much higher than normal levels of glucose in their bloodstream and had a difficult time controlling their glucose levels, just as humans with diabetes do. Therefore, the encapsulated cells appear to have acted as an artificial or replacement pancreas.

“We have now secured rights to technology that has the potential to change the manner in which diabetes will be treated in the future,” Patricia Gruden, Nuvilex’s chairman and CFO, said in a statement.

“Nuvilex’s plan is to become the world-wide leader in this market,” Gruden said, citing a Transparency Market Research report projecting the global diabetes market for therapeutic devices and drugs will reach $114.3 billion by 2018.

Nuvilex said it envisions the encapsulation technology as a platform not only for future treatments for diabetes, but for several types of cancer, including advanced, inoperable pancreatic cancer. The company also disclosed that it will spend the $500,000 remainder of the $1.5 million for ongoing preparations for its Phase III clinical trials in pancreatic cancer.

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