Sanofi's candidate drug Lyxumia or lixisenatide, added to basal insulin, significantly reduced blood sugar levels in type 2 diabetes patients and also led to a loss in weight, data published on Tuesday showed.

Lixisenatide belongs to the GLP-1 class of drugs that stimulate insulin release when glucose levels become too high.

The French drugmaker licensed lixisenatide from Zealand Pharma and the so-called GLP-1 treatment is seen as a possible blockbuster which could help Sanofi reach its goal of becoming the world's top diabetes treatment company.

While the results of the end-stage clinical study were in line with previous outcomes in Asia, analysts highlighted the fact that type 2 diabetes patients, who tend to have the disease because they are overweight, also lost weight.

"Importantly, in our view, this trial did demonstrate significant weight loss," Jefferies analysts wrote in a research note. They said that although the Asia trial showed a small tendency to weight loss, Asian patients "are typically very lean".

Zealand Pharma shares were up nearly 3 per cent at 70 euros ($100.80) and Sanofi shares were up 1.1 per cent at 54.70 euros by 0747 GMT.

Sanofi aims to position the drug with its insulin Lantus, which last year was the company's best-selling treatment with revenues of 3.5 billion euros.

"Sanofi should ensure blockbuster commercial success, largely driven by a Lantus combination," the Jeffries note said.

Sanofi said the blood sugar levels of patients taking Lyxumia combined with basal insulin fell significantly without significantly increasing their risk of hypoglycemia against patients who were on placebo or dummy treatment.

Hypoglycemia is usually a side effect of diabetes drugs and happens when blood sugar drops to below normal levels. Symptoms include hunger, sweating or shakiness.

If Lyxumia, part of a trial with more than 4,300 patients, wins marketing approval it will compete with Novo Nordisk's Victoza and Amylin and Eli Lilly's Byetta.

The most commonly reported adverse event was nausea and not many patients had to abandon the trial, Sanofi said.

The full study results are expected to be presented at a medical congress, Sanofi said. The American Diabetes Association (ADA) will meet from June 24 to 28 and the European Association for the Study of Diabetes (EASD) is held from Sept. 12 to 16. – Reuters