As a general rule, the most successful man in life is the man who has the best information.

The foods you eat are broken down into a simple sugar called glucose. In response to a rise in glucose after eating, your pancreas secretes insulin. Insulin moves the glucose from your blood stream into the cells where it can be utilized for energy.

Diabetes is a chronic disease that's caused by the pancreas not producing enough insulin, or when the body cannot effectively use the insulin the pancreas produces.

Diabetes is a condition in which normal blood sugar levels are too high.

A Type 1 diabetes diagnosis means your pancreatic beta cells that secrete insulin have been damaged or destroyed - glucose cannot move from the bloodstream into the cells.

A Type 2 (insulin resistance) diabetes diagnosis is a far more common verdict for people than Type 1. Insulin resistance happens because of chronically elevated blood sugar and insulin. These elevated levels of sugar and insulin have the effect of "numbing" the cellular processes which moves the sugar from the blood stream to the cells - the body cannot respond to the insulin "requests" to move blood sugar into the cells. Roughly 27% of the people who start out as Type 2 diabetics, will, in the future, require insulin injections similar to Type 1 diabetics.

Complications of Diabetes:

• Diabetic adults are 2 to 4 times more likely to die from heart disease than adults without diabetes
• Diabetics are 2 to 4 times more likely to suffer a stroke
• Diabetes is the leading cause for new blindness in adults 20-74 years of age.
• Diabetes is the leading cause for kidney failure
• Approximately 60% to 70% of diabetics have some form of nerve damage
• Over 60% of non-traumatic lower-limb amputations occur in diabetics
• Dental disease is more common in diabetics

In 1985, there were an estimated 30 million people with diabetes worldwide. Today there are more than 300 million people with diabetes. Within 20 years it is estimated the number of people with diabetes will reach close to 500 million.

An estimated 3.8 million people worldwide died from diabetes related causes in 2007. Global health expenditures to treat and prevent diabetes and its complications total at least US$232 billion in 2007. By 2025, this number will exceed US$302 billion.

The Standard of Care for patients with reduced or missing critical hormones or proteins, such as insulin, is often monitoring and injecting these proteins multiple times a day. Today's cell transplant technology (an eight billion dollar a year market) promises to provide a solution to the problem of these biochemical deficiencies and a relief from multiple daily injections but, maintaining the transplanted cell population in the recipient has been the major problem.

At this time there is no approved device to house and protect transplanted therapeutic cells in the body. But for people suffering biochemical deficiencies such a device might soon become a reality and for diabetics in particular, the first example of Sernova's Cell Pouch System™, an artificial pancreas - a potential natural insulin pump with the added benefit of fine-tuned glucose control - will be in human trials this year.

Sernova Corp. TSX.V - SVA

Sernova's Cell Pouch System™ is a proprietary medical device, implanted below the skin, that provides a natural "organ-like" environment for therapeutic cells - such as insulin producing islets for diabetics. The natural environment established by the Cell Pouch System™ is expected to conserve cell number and promote natural function thereby increasing cell survival and potentially reducing the serious long-term side effects of diabetes.

The Edmonton Protocol is a method of implantation of pancreatic islets into the portal vein of the recipient's liver with life-long anti rejection drugs. Since the year 2000 close to 1,000 people have received islet transplants - but by five years after the procedure, fewer than 10% of all patients are free of daily insulin supplementation. What happens, despite the massive use of expensive drugs, is many of the infused cells are thought to die from an instant blood-mediated inflammatory reaction (IBMIR), or from clotting in the microvessels of the liver. The rest of the cells die over time to other causes such as the anti-rejection drugs themselves. Current cell therapy is limited to expensive procedures, poor cell survival and inappropriate delivery.

Sernova strongly believes that its proprietary Cell Pouch™ technology offers a quantum leap forward over the Edmonton Protocol.

The limitations of the Edmonton Protocol are well understood:

• Potential damage to the patient's liver
• Significant loss of islets following transplantation
• The often need for multiple donors for one recipient
• The inability to image the graft to assess its health
• The inability to remove the graft if it becomes necessary
• Severe immune and inflammatory responses to the transplanted islets
• The permanent need for the patient to take toxic and expensive anti-rejection drugs

The Cell Pouch System™ would potentially overcome all of the Edmonton Protocol limitations in a simpler, less invasive, safer and less expensive way. The advantages are:

• Placed in a simple outpatient procedure
• No damage to the liver
• Possibly better islet survival placed in a more natural environment
• No inflammatory response expected (IBMIR)
• Potential islet sparing effect allowing one or more recipients to a single donor
• The ability to easily image the health of the graft
• The ability to remove the graft if necessary
• With Sernova's Sertoli technology the potential to eliminate antirejection drugs

The Cell Pouch System™ will be used initially for treatment of insulin-dependent diabetes with human donor cells and is expected to eventually use insulin producing stem cells which could treat millions of patients a year.

People with diabetes have an average life expectancy 15 years less than those without diabetes. People diagnosed with diabetes have medical costs approximately 2.3 times higher than those without diabetes.

It is estimated that the costs of diabetes complications account for between 5% and 10% of total healthcare spending in the world

Worldwide expenditures on insulin are estimated to be $15 billion annually and growing - a patient track record of missing dosages and serious side effects results in US $150 billion a year hospital costs for diabetes alone.

At present there is no cure for diabetes.

Sernova has conducted efficacy studies in small and large animal models of diabetes and has shown the device - with insulin-producing islets - can control blood glucose levels long-term without the need for daily insulin injections.

Sernova's Cell Pouch System™ is expected to be in human trials this year - patients are going to receive donor islets in 2011.

Conclusion

For patients with reduced or missing critical hormones or proteins the Standard of Care is often monitoring and injecting these proteins multiple times a day. Cell transplant technology promises to provide a solution to these biochemical deficiencies - but maintaining the transplanted cell population in the recipient is a major obstacle. The natural, "organ-like" environment for transplanted therapeutic cells, which is established by Sernova's Cell Pouch System™ is expected to conserve cell number and promote natural function thereby increasing cell survival.

Sernova's commercialization strategy is to establish collaborative relationships with companies working in the cell therapy field. Sernova's Cell Pouch™ has the potential for use in additional (other than diabetes) cell transplantation therapies including haemophilia, spinal cord injury, Parkinson's disease and other chronic debilitating diseases.

"Now that we have demonstrated strong efficacy in diabetes with the Cell Pouch(TM) we are hoping to establish one or more collaborations to demonstrate the expanded utility of the Cell Pouch System(TM) for other therapeutic cells during 2011." Dr. Toleikis, Sernova CEO

At this time there is no approved device to house and protect transplanted therapeutic cells in the body. Such a device might soon become a reality.

Is Sernova's Cell Pouch System™ on your radar screen?

If not, maybe it should be.

Richard Mills owns shares of Sernova Corp. TSX.V - SVA
Sernova Corp. TSX.V - SVA is an advertiser on Richard's website www.aheadoftheherd.com.

If you're interested in learning more about junior bio-techs and the junior resource market please come and visit us at www.aheadoftheherd.com. Membership is free, no credit card or personal information is asked for.