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This Small Business Innovation Research (SBIR) Phase I Project will develop the technology to inhibit and / or to prevent the fibrosis of peritoneal hydrogel implants. BioHybrid Technologies' microreactors are hydrogel-based sustained-release devices containing living cells that manufacture and secrete therapeutic substances. By encapsulating the appropriate cells derived from primary isolates, cell lines or stem cells; BioHybrid's microreactors can be geared to the treatment of a large variety of diseases. These microreactors have been shown to protect the cells from cellular and humoral immunity. However, the current design is still prone to cellular overgrowth, resulting in suffocation of cells within the microreactor and ultimately leading to microreactor failure. The objectives of this project are to determine (1) if anti-fibrotic agents included in the microreactors or those used systemically can inhibit fibrosis of microreactors, and (2) if geometric changes made to the microreactors will render them less fibrogenic. The ability to control or to eliminate the host fibrotic reaction to such microreactors would represent a major advance in this promising technology . This is likely to be the last hurdle that must be overcome to finally bring BioHybrid's microreactor technology into the clinic. The commercial applications of this project are expected to be immediate and significant. The final refinement in BioHybrid Technologies' microreactor technology is likely to lead to substantial improvements in treatment for a large number of human diseases including diabetes, Alzheimer's, liver failure, chronic pain, hemophilia, dwarfism, anemia, hypocalcemia, ALS, Parkinson's, epilepsy, Huntington's, spinal cord injuries, strokes, kidney failure, immunodeficiencies, and several others. The commercial market for these diseases is huge, measuring in billions of dollars in the U.S. alone. The therapeutic improvements that would result from this technology will lower healthcare costs and enable other technologies that can take advantage of the advances in therapeutic substance delivery.