Type 1 diabetes, also known as insulin-dependent diabetes, is a chronic disease in which the pancreas produces insufficient insulin to properly regulate blood sugar levels. Hypoglycemia, low blood sugar, and hyperglycemia, high blood sugar, can lead to significant complications in people with type 1 diabetes. Intensive insulin therapy has been shown to reduce the risk of chronic complications in people who achieve near normalization of glycemia. However, this therapy is labor intensive, difficult to implement, and associated with an increased frequency of severe hypoglycemia. Transplantation of islets from a healthy pancreas has been successful in restoring normal blood sugar levels and has led to initial insulin independence in people with type 1 diabetes. Rejection of these islets by the recipient's immune system, however, makes the treatment ineffective within a couple of years. Immunosuppressant drugs may be an effective way to maintain islet function post-transplant. The purpose of this study is to assess the safety and efficacy of an immunosuppressive regimen that includes DSG on post-transplant islet function in people with type 1 diabetes who have not responded to intensive insulin therapy. The study will also seek to improve the understanding of determinants of success and failure of islet transplants for type 1 diabetes.

Following screening procedures and 2 days prior to islet transplant, participants will be randomly assigned to either this Phase 2 trial or a multicenter Phase 3 trial. Participants in this study will receive up to three separate islet transplants. They will begin receiving antithymocyte globulin (ATG) and sirolimus 2 days prior to the first islet transplant. ATG will continue to be given until Day 2 post-transplant. Participants will continue taking sirolimus for the duration of the study. On the day of transplant, participants will receive DSG and etanercept, in addition to ATG and sirolimus. The DSG infusion will be administered over 3 hours and will immediately precede the islet transplant. Participants will continue receiving daily 3-hour infusions of DSG through Day 6 post-transplant. Etanercept will also be administered on Days 3, 7, and 10 post-transplant. Tacrolimus will be administered on Day 1 post-transplant and continued throughout the study.

Transplantations will involve an inpatient hospital stay and infusion of islets into a branch of the portal vein. Participants who do not achieve or maintain insulin independence by Day 75 post-transplant will be considered for a second islet transplant. Participants who remain dependent on insulin for longer than 1 month after the second transplant and who show partial graft function will be considered for a third transplant. Daclizumab or basiliximab will be used in place of ATG for the second and third transplants, if they are necessary. Participants who do not meet the criteria for a subsequent transplant and do not have a functioning graft will enter a reduced follow-up period.

There will be up to 21 study visits following each transplant. A physical exam, review of adverse events, blood collection, urine tests, and measures of immunosuppression levels will occur at most visits. An abdominal ultrasound and glomerular filtration rate testing will occur at some study visits. Participants will also self-test their glucose levels at least five times per day throughout the study. A 12-month follow-up period will take place after the participant's last transplant.