The Danish diabetes specialist

Novo Nordisk

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says its experimental drug liraglutide does a better job of controlling blood sugar and reducing weight than a type of insulin made by a competitor.

Although Novo Nordisk is the world's largest producer of insulin products, it is a small player in noninsulin drugs. Liraglutide, which is injected once a day, is its best chance to boost its noninsulin offerings. "We are very pleased with these first results," Mads Thomsen, the company's chief science officer, said Thursday.

In a late-stage clinical trial, Novo Nordisk compared liraglutide with


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insulin glargine, finding "statistically significant" differences in weight loss and blood-sugar control.

Novo Nordisk is conducting five late-stage clinical trials. It will announce other clinical-trial data during the second half of 2007 and first quarter of 2008. Thomsen told

his company expects to file approval applications in the U.S. and the European Union by mid-2008 and in Japan by late next year. If all goes well, the drug could reach the U.S. in 2009.

"From an efficacy standpoint, these results look good," says Julie Stralow, of the independent research firm Morningstar, in a research note. The drug "was well-tolerated in terms of gastrointestinal side effects, particularly nausea, which could be a point of differentiation versus Byetta if approved."

Byetta is made by

Eli Lilly

(LLY) - Get Report


Amylin Pharmaceuticals


. Byetta, derived from the saliva of the Gila Monster, is injected twice a day.

"Byetta sales are growing quickly and could reach blockbuster status within the next year or two," Stralow said. "If liraglutide can piggyback on that growth or even surpass Byetta after a potential 2009 launch, Novo Nordisk could have a monster hit on its hands."