If at first you don't succeed, try, try again. We've heard that old saw many times, but it's good advice. It's also advice that two big pharmaceutical companies are heeding.

AstraZeneca (AZN 0.38%) and Bristol-Myers Squibb (BMY -0.04%) announced last week that they are making another attempt at U.S. regulatory approval for diabetes drug Forxiga. Will the two drugmakers be successful this time around? Here are two keys for Forxiga to emerge as a winner.

1. The data must deliver.
The Food and Drug Administration rejected approval of Forxiga in January 2012. Concerns about the drug's benefit-risk profile prompted the agency to request additional clinical data. This decision wasn't a major surprise at the time, considering that an advisory panel had previously recommended against approval of Forxiga because of safety concerns, including possible increased risk of breast and bladder cancers.

AstraZeneca and Bristol-Myers Squibb provided lots of new data with the resubmission. The companies announced that data was given to the FDA for several new clinical studies plus additional long-term data for up to a four-year period from studies submitted in the earlier application. This additional data increased the number of patient-years exposure to Forxiga by 50%.

A decision date for Forxiga has been set for Jan. 11, 2014. FDA approval now hinges on how convincing this new data actually is.

2. The market must make room.
Even if the FDA grants approval for Forxiga, another hurdle remains for ultimate success. The market could become crowded relatively quickly with diabetes drugs that use similar mechanisms of action.

Johnson & Johnson (JNJ -0.62%) obtained FDA approval in March for Invokana. Like Forxiga, the drug is a sodium glucose co-transporter 2, or SGLT2 inhibitor. SGLT2 inhibitors work by increasing the amount of glucose expelled in urine.

While J&J scored first with U.S. approval, the company is still seeking regulatory approval in Europe. AstraZeneca and Bristol already obtained European marketing authorization for Forxiga last November. It could be only a matter of time before Forxiga and Invokana go head-to-head in both markets, but they will probably face other competitors not too far down the road.

Eli Lilly (LLY -1.64%) and Boehringer Ingelheim submitted a New Drug Application, or NDA, for empagliflozin in March. This head start should enable the two companies to beat AstraZeneca and Bristol to the American market. Lilly and Boehringer also filed for regulatory approval in Europe. 

Pfizer and Merck (MRK 0.30%) are working together on development of SGL2 inhibitor ertugliflozin. The drug should begin late-stage trials in the near future. The companies are pursuing use of ertugliflozin as a stand-alone treatment and in combination with Merck's other diabetes drugs, particularly Januvia. 

Chances are...
My take is that AstraZeneca and Bristol-Myers probably have a good shot at winning FDA approval this time around. The FDA approved Invokana, which isn't too terribly different from Forxiga. Reams of new data should help swing the pendulum the other way compared to the first attempt at approval.

Despite what seems like a soon-to-be crowded market for SGLT2 inhibitors, I think there's still plenty of room for all. Analysts project near-blockbuster status for all of the drugs, with some seeing even higher potential.

AstraZeneca and Bristol-Myers Squibb need a success story with Forxiga, because the patent cliff has taken its toll in recent years. Both companies' revenue totals in 2012 dropped 17% compared to 2011.

The problem is that even if Forxiga gains FDA approval and competes effectively in the marketplace, it won't be enough on its own to reverse the downward trend for AstraZeneca and Bristol. Both companies have other pipeline opportunities, but they each need more keys for success than just one or two new drugs.