Islet Sciences, a biotechnology company specializing in transplantation therapy for patients with diabetes, will acquire Charlottesville, Va.-based biopharmaceutical company DiaKine Therapeutics, which commercializes novel immune modulators for the treatment of diabetes and related complications.

A primary focus of DiaKine's R&D is its next generation of orally bioavailable immune modulators, which have an improved spectrum of action to Lisofylline—its most clinically advanced drug. Several lead compounds have been identified for further development and are examples of the extensive library of analogs and new structures in its patent portfolio that await discovery for future indications.

"DiaKine's drugs have the potential to reshape the diabetes market by stopping the progression of diabetes and reversing damage already caused by the disease,” said John Steel, chairman and CEO of Islet Sciences. “Because of their unique immune modulating and anti-inflammatory properties, these therapies may potentially benefit people with type 1 and type 2 diabetes, which we believe has a total addressable market of approximately $13 billion. We believe this acquisition will position us to capitalize on the exciting opportunities emerging in our industry."

Islet Sciences agreed to issue DiaKine shareholders an aggregate of 200,000 shares of its newly designated shares of Series C preferred stock in exchange for all issued and outstanding shares of DiaKine.