SYDNEY - A cell transplant technique developed by Australian biotechnology firm Living Cell Technologies Ltd to help Type 1 diabetes sufferers may become commercially available as soon as the last quarter of 2011.

The company said on Friday a trial of the technique, which involves extracting insulin-producing cells from a pig and injecting it into the sufferer, had reduced the daily need for insulin in a 48-year-old male diabetes patient by 30 percent.

Medical Director Bob Elliott told Reuters in an interview that the technique involves extracting live cells from the pancreas of a baby pig, coating the cells with a material and injecting them into the abdominal cavity of patients.

"The trick we have is to coat the foreign cells with material that makes them invisible to the patient's immune system, so the patient doesn't even recognise they're there," he said.

"This coating allows the insulin out but the immune system is ignorant of the cells being there."

Type 1 diabetes occurs when the pancreas does not produce enough insulin.

More than 20 million people worldwide suffer from the disease, according to the World Health Organization.

Sufferers must inject themselves with insulin several times a day to treat the disease.

Insulin derived from pigs is considered most alike that produced by humans.

It will be at least another year before the company may be granted approval to test in the U.S., where it has an application in with the Food and Drug Administration (FDA), Elliott said.

The trial was conducted in New Zealand, with the company currently blocked from undertaking human trials in Australia by the government on the grounds that humans could pick up infectious diseases from the pig cells.

Elliott expects the ban will be lifted by the end of the year, when it is due for review.

Living Cell uses a controlled pig herd that should allay any concerns, he said.

A further seven patients will take part in the New Zealand trial.

Living Cell is also in the animal trial stage of using pig cells as a treatment for Parkinson's Disease, Elliott said.

Living Cell shares, which have risen by more than a third so far this year, closed 1.8 percent higher at A$0.275 on Friday in a broader market down 1.5 percent.