Abstract: Controlling the autoimmune inflammation in type 1 diabetes (T1D) has proven difficult. Currently there are clinical trials to attempt controlling T1D that are having only marginal impact. Desired primary outcomes include increasing of C-peptide, as a marker for beta cell restoration, decrease insulin requirements, decreases in HbA1c, as a measure of systemic inflammation and maintenance of peripheral blood lymphocyte counts. Current therapies have slowed C-peptide loss marginally but not halted or reversed loss. None of the other primary goals have yet been achieved in any of the current clinical trials. We created a novel approach to control pathogenesis in T1D using a small peptide to modulate CD40 mediated inflammation. We completed pre-clinical studies in mice that include toxicology/pharmacodynamic/pharmacokinetic studies on a peptide that prevents diabetes onset in NOD mice and reverses hyperglycemia in 60% of diabetic NOD mice. We have begun a veterinary clinical trial generating data that show, unlike current clinical trial treatments, this approach increases C-peptide over time, reduces, by up to 90%, insulin requirements, reduces glycated fructosamine, the veterinary equivalent of HbA1c, and does not cause immune suppression or lymphocyte loss. We were granted a “Safe-to-Proceed” notice from the FDA to begin Phase 1a/1b clinical trials in humans using this drug. This grant application is to perform mechanism of action studies on this drug. We hypothesize that the drug, KGYY15 (OPT101 for FDA) binds to beta cell CD40 to prevent beta cell damage. We further hypothesize that KGYY15 binds to peripheral blood T cells (TH40 cells specifically defined by us), B cells and macrophages/dendritic cells to tolerize thus preventing further damage. We also will explore developing this drug approach for islet transplants. Successful completion of this grant will provide important information about how this drug works specifically during T1D.