Insulinova partners San Raffaele to test encapsulated beta cells
Insulinova, the joint venture between Avaí Bio and Austrianova, has signed a Research and Option Agreement with Ospedale San Raffaele (OSR) in Milan to evaluate encapsulated stem cell-derived beta cells as a potential treatment for Type 1 and insulin-dependent Type 2 diabetes. The deal, announced on 12 August 2026, positions Insulinova to fund and supply the programme while OSR contributes its scientific and clinical expertise.
The collaboration brings together three distinct capabilities. OSR's Diabetes Research Institute, led by Professor Lorenzo Piemonti and Dr. Valeria Sordi, will provide stem cell differentiation know-how and laboratory infrastructure. Austrianova contributes its Cell-in-a-Box encapsulation technology, which is designed to shield transplanted cells from immune attack. Insulinova's role is to fund the research, supply proprietary encapsulation equipment and materials, and advance any resulting innovation towards commercialisation.
The science
The central hypothesis is that encapsulating stem cell-derived beta cells could protect them from immune-mediated destruction after transplantation, potentially reducing or eliminating the need for lifelong systemic immunosuppression. That dependency on immunosuppression is one of the principal barriers to wider clinical adoption of islet transplantation, which has shown proof of concept in selected patient populations but remains limited by donor availability, graft survival, and immunological risk.
Dr. Valeria Sordi, Head of the Beta Cell Differentiation Unit at OSR, described the immune-protection challenge as "a major challenge" for the field and said the collaboration will investigate whether Cell-in-a-Box "can provide a suitable environment for stem cell-derived beta cells while preserving their viability and function."
Market context and competitive landscape
Beta cell replacement for diabetes sits within a crowded and well-capitalised segment of the cell and gene therapy market. Vertex Pharmaceuticals, through its acquisition of ViaCyte, has advanced encapsulated and non-encapsulated stem cell-derived islet programmes into clinical evaluation, with its VX-880 and VX-264 candidates attracting significant investor attention. Sernova and Procyon are among other companies pursuing immune-protective devices for islet transplantation. The Insulinova programme is at an earlier stage than several of these rivals, and the Research and Option Agreement structure suggests OSR retains the right to licence or renegotiate terms as data emerge, a common arrangement for academic-industry collaborations at the preclinical stage.
Avaí Bio is listed on the OTCQB, a lower-tier US market typically associated with early-stage companies with limited trading liquidity. Austrianova, based in Singapore, brings published encapsulation science and GMP-grade cell product experience, and the Cell-in-a-Box platform has previously been explored in oncology applications. Its translation to an endocrine cell therapy context is a newer direction.
The agreement does not disclose financial terms, a timeline for preclinical readouts, or any indication of when IND-enabling studies might begin. Investors and clinical observers will look for the first functional data showing whether encapsulated stem cell-derived beta cells maintain glucose-responsive insulin secretion under the Cell-in-a-Box conditions, as that remains the threshold question for the approach.