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Keep and eye on BMY and AZN for their diabetes drug Dapagliflozin.

|Includes:AstraZeneca Group plc (AZN), MRK

In a six-month trial, the drug was able to lower HbA1c levels -- a measure of long-term glucose levels -- better than placebo.

Dapagliflozin is in a new class of diabetes medications that inhibits the kidneys from moving glucose back into the bloodstream, and thereby lowers the glucose levels in diabetics.

If dapagliflozin has another successful clinical trial and wins approval, it'll enter a pretty crowded market. But I think there's room, especially if it can be used as an add-on therapy with a popular drug such as MRK's Januvia. The companies could also be bold and combine the new drug with their recently approved diabetes drug, Onglyza, which might help the latecomer compete against Januvia.


Disclaimer: MD Capital Management does not one MRK or AZN

Stocks: AZN, MRK