Bristol-Myers Squibb (NYSE:BMY) and AstraZeneca's (NYSE:AZN) diabetes treatment Onglyza is already under review at both the Food and Drug Administration and the European Medicines Agency, but investors have recently gotten a better look at its chances for approval. The companies presented data from three studies of Onglyza at the European Association for the Study of Diabetes meeting over the last two days. For the companies and investors both, it looks promising.

In the crowded diabetes market that includes drugs from Amylin Pharmaceuticals (NASDAQ:AMLN), Eli Lilly (NYSE:LLY), and Novo Nordisk (NYSE:NVO), among many others, one relatively easy way to get a drug into the doctor's tool bag -- and thus generate sales -- is to show that the drug can lower glucose levels in combination with other approved drugs. That's just the strategy that Bristol-Myers and AstraZeneca are taking to get Onglyza approved for use in patients at different stages of disease progression.

One of the studies tested Onglyza in combination with the common front-line treatment metformin in subjects that hadn't been on any medication. The drug combination was able to lower glucose levels better than either of the drugs alone.

The other two studies tested patients who were already on medication but weren't able to get their blood glucose levels down far enough. In combination with their current medication -- generic glyburide, Takeda's Actos or GlaxoSmithKline's (NYSE:GSK) Avandia -- the drug was able to lower glucose levels more than in patients who just stayed on their current medication and added a placebo pill.

The proposed safety changes at the FDA to make stricter requirements for diabetes drugs might come into play for Onglyza's U.S. approval, but the companies will probably be able to scoot by. They have tested the drug at concentrations up to 80 times the proposed dose for short periods of time and at twice the proposed dose for up to two years, which should give the agency reassurance that the drug is fairly safe.

Eventually the companies are going to have to differentiate Onglyza from the other diabetes drugs in head-to-head trials -- in fact, they have one test pitting Onglyza against Merck's (NYSE:MRK) Januvia right now -- but this data should be enough to get the drug onto the market.

After that, the company can worry about swinging for the fences.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.