Statement I is correct: In 1983, the American pharmaceutical company Eli Lilly successfully prepared two distinct DNA sequences. These sequences matched the A and B chains of human insulin. They placed these DNA sequences into plasmids of the bacterium E. coli to start production.

Statement II is correct: By inserting these human insulin genes into the bacteria, the E. coli became genetically modified. These altered bacteria then successfully produced the individual human insulin chains, which were later extracted and combined to make mature human insulin (Humulin).