Cebix will recruit around 30-60 patients in the trial.
Earlier, in preclinical trials, Ersatta has demonstrated improved nerve function in a rat diabetic neuropathy model.
The company intends to commence Phase 2/3 pivotal trial in diabetic peripheral neuropathy in the first half of 2012.
Cebix chief scientific officer John Wahren said they have successfully created a long-acting form of C-peptide to improve the drug profile for patients and physicians and have initiated their first clinical trial with Ersatta in patients with type 1 diabetes.