Stem Cell Sciences (SCS), the pioneering Edinburgh University spin-out, has signed a research agreement with a "major pharmaceutical company" to help develop drugs to treat diabetes.
The pharmaceutical company was not named, but a spokesman for SCS said the new partnership will provide a "tool kit" for the drugs company that will be used to test and screen novel treatments for the increasingly common disorder.
The spokesman added the pharmaceutical firm was a "major company that already produces diabetes drugs" and that research programmes would be conducted at SCS's Cambridge production facility.
The financial terms of the new agreement were not disclosed.
The Scottish company added that it plans to seek similar agreements in the future with biopharmaceutical companies to include treatment for many other diseases as the field of stem cell-based therapeutics expands.
Stem cells are the building blocks of other cells which, researchers believe, can be coaxed and grown into any type of cell found in the human body.
SCS ultimately aims to create the technology for stem cells to be implanted directly into the body in order to repair the damage caused by a number of degenerative disorders.
This technology will eventually play a major role in curing conditions such as diabetes, Aids, multiple sclerosis, and Parkinson's and Alzheimer's diseases, as well as helping patients who have suffered strokes and spinal cord injuries.
Besides providing contract production services, SCS - which has facilities in the US, Australia and Japan - will also offer an option for an exclusive license for the use of its Rho kinase inhibitor technology in the field of human embryonic stem production of cells for diabetes research.
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