AbstractNeuropathy is a major cause of morbidity and mortality in individuals with diabetes, with no effective therapy to alter the inevitable progression of nerve damage. We hypothesized that mesenchymal stroma cell‐like populations, that are characterized as immune modulators also have the potential of inducing angiogenesis and neurite outgrowth, might be useful in treating diabetic peripheral neuropathy (DPN). The aims of this study were to investigate the efficacy and safety of mesenchymal stem cell‐like product (PDA‐002) in treating DPN. A phase‐2 randomized placebo‐controlled trial was conducted in 26 patients with DPN. Treatment consisted of three rounds of intramuscular injections in one lower limb using one of the three randomized treatment arms PDA‐002 (low‐dose 3 × 106 cells), PDA‐002 (high‐dose 30 × 106 cells), or placebo. Three treatments per patient occurred on days 1, 29, and 57. Study endpoints included efficacy and safety of PDA‐002 in treating DPN in both lower extremities following unilateral local injection. Outcome measures included intra‐epidermal nerve fiber density (IENFD) up to 1 year from the day of treatment with 6‐month as the primary outcome measurement. In this phase 2 study of DPN, PDA‐002 was well tolerated in both doses. No significant changes were noted in IENFD in both the treated and untreated leg in the NIS‐LL, NTSS‐6, or UENS. Mesenchymal stem cells represent a novel mechanism for treating diabetic neuropathy and are well tolerated. Preliminary results highlight the need of further investigation of PDA‐001 as a disease modifying agent for treatment of DPN.