The primary objective of this clinical study is to evaluate the effectiveness and safety of PH3 for patients with diabetic nephropathy.

The secondary objectives are to identify the optimal dosage for subsequent studies and to provide basis for the next confirmatory study in study design, endpoints, and study methodologies.

Inclusion Criteria:

1. Males and Females between 18 and 70 years of age with type 1 or type 2 diabetes
2. Sitting blood pressure of <=140/90 mm Hg
3. Serum creatinine <=2.0 mg/dL
4. Urinary albumin: creatinine ratio between 30 mg/g to 1000 mg/g creatinine (of the first urine sample of the day)
5. Hemoglobin A1c <=8%
6. Women of child-bearing potential must test negative in a pregnancy test and take contraception measures to prevent pregnancy and can not be breast-feeding
7. Voluntary written consent to participate in this study

Exclusion Criteria:

1. History of major cardiovascular or cerebrovascular events within 6 months prior to screening
2. History of cancer
3. Receiving chronic nonsteroidal anti-inflammatory therapy
4. History of diabetic ketoacidosis
5. Has clinically significant deviation from normal physical examination findings that, in the principal investigator's judgment, may interfere with the study evaluation or affect subject safety
6. Has participated in other investigational trials within 28 days prior to study enrollment
7. Has taken herbal medical treatment as prescription medication and/or over-the- counter medication, within 28 days prior to study enrollment.
8. Has known allergy to the study drug