By Bradley J. Fikes U-T5:06 a.m.Aug. 20, 2014

ViaCyte of San Diego has received permission from the Food and Drug Administration to try its stem cell-based diabetes therapy.

The combination clinical trial phases 1 and 2 will aim to determine the safety level of the therapy and look for early signs of efficacy.

ViaCyte grows replacement insulin-producing cells from human embryonic stem cells, which are placed in a semipermeable pouch. The pouch will be implanted into patients, allowing insulin and other hormones to enter their bloodstream. The pouch and cells are together called VC-01.

The product has the potential to provide a virtual cure for Type 1 diabetes, ViaCyte officials said.

Clinical testing in animals has shown that the replacement cells successfully duplicate the function of insulin-producing beta cells. They secrete not only insulin, which lowers blood sugar, but hormones such as glucagon, which raises it. Providing a range of hormones as in the natural pancreas is expected to provide better control of blood sugar than with insulin alone.

The FDA green light is not only good news for privately held ViaCyte, but also for the states stem cell agency, the California Institute for Regenerative Medicine. The agency, which has granted ViaCyte more than $38 million to research and develop the treatment, has been under pressure in recent years to show that its $3 billion in bond funding is leading to therapies.

(The institute) was created to help develop stem cell treatments for diseases that are currently incurable with traditional approaches, C. Randal Mills, president and CEO of the agency, said in a statement. Anytime a product, particularly one as innovative as this one, progresses from the lab and into clinical trials, its very encouraging news.

Inadequate control of blood sugar increases the risk of heart disease, stroke, kidney failure and other complications from diabetes.

The ViaCyte product contains immature beta cells grown from embryonic stem cells. After implantation, the cells mature and begin to release the appropriate hormones in response to blood sugar levels.

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VIACYTE CLINICAL TRIAL OKD