A new diabetes drug in the same class as Avandia has entered the final stage of its clinical trial, bringing it one step closer to government scrutiny in an effort to grab a chunk of the marketplace.

The final stage of testing for balaglitazone, known as the Phase III program, will comprise five to six studies involving different combination therapies for patients with Type 2 diabetes, as well as a long-term safety study, according to www.tmcnet.com. Philip Larsen, CEO of Rheoscience, which has partnered with Dr. Reddy's Laboratories Ltd. to develop the drug, said there are no plans to submit a new drug application until after 2009. They also don't have a commercial partner for the product. "We'd really like to see what potential the drug has before we enter a deal," he said.

But it's never too soon to envision to revenue. "I would be a wimp if I said we would only get five percent of the market," he said.