Diabetes powerhouse Novo Nordisk A/S (ADR) (NYSE:NVO) recently presented impressive data on its type 2 diabetes drug candidate IDegLira.

IDegLira is an investigational once-daily injection that combines the ultra-long-acting insulin degludec with Victoza, a GLP-1 analogue. At the American Diabetes Association annual meeting, Novo reported phase 3b results from a 26-week study that showed the drug produced a trifecta of terrific results when compared to patients who only used the insulin glargine during the same period. Let's dig in. 

First, patients who used IDegLira experienced a 1.8% reduction in their HbA1c, which is a blood test that gives a rough average of a patient's blood sugar levels over the previous 3 months. During the trial period, patients dropped their average result from 8.4% to 6.6%,  which is an excellent result. The American Diabetes Association suggests patients get below 7% HbA1c in order to maintain good health. 

Second, patients who used the drug lost about 3 pounds on average during the study period, while the control group showed a weight gain of 4 pounds. That's a huge 7-pound difference observed over 26 weeks; as type 2 diabetes is highly correlated with obesity, this is a wonderful result.

Finally, patients who used IDegLira experienced a 57% reduction in the rate of hypoglycemia, or low blood sugar, when compared to patients who were in the control group. Hypoglycemia is one of the primary side effects of taking insulin, so a significant reduction versus the control group is another great result.

Any of these outcomes on their own would be a good study result, but when you get all of them from a single once-daily injectable drug, you get a potential game changer with massive market potential.

These results probably sent a chill down the spine of Sanofi investors, as the company's blockbuster insulin Lantus rang up more than $7 billion in sales in 2014 and was responsible for 18.8% of the company's total revenue.

IDegLira has already been approved in Europe under the brand name Xultophy, and is available in the U.K., Switzerland, and Germany, with more European countries on the way later this year. 

Here's the problem
However, while the future looks bright for IDegLira in Europe, the situation is much less clear in the U.S. Since, as previously mentioned, IDegLira is a combination of Victoza and degludec, the Food and Drug Administration requires that both components be approved prior to any regulatory submission. While Victoza is approved and available for sale in the U.S., degludec, which is sold in Europe under the brand name Tresiba, is not.

The FDA previously rejected Novo's attempt to gain approval for this insulin in the U.S., as the agency wanted longer-term data on the cardiovascular risks related to the drug's use. Novo resubmitted degludec to the FDA in April, but a decision is not expected until later in the year. Until then, at least, IDegLira will have to wait its turn. 

Huge opportunity
Approval and setbacks aside, if Novo can successfully navigate IDegLira through the FDA, the drug's potential looks huge. Analysts predict peak sales for IDegLira of roughly $1 billion per year, but that number is likely to move wildly based on the drug's regulatory approval status in the U.S. Nailing down a sales target is simply too difficult right now as there are so many variables surrounding the drug's future in this market.

However, when you consider that diabetes currently affects 29 million people in the U.S. alone, with as many as 86 million also at risk of developing the disease, it seems quite possible that the drug could exceed the $1 billion mark over time.

Novo rang up more than $13 billion in overall sales in 2014, so adding another $1 billion in revenue would certainly be meaningful to the company's financial performance. Much has to go right between now and an IDegLira approval before Novo's investors would benefit, but based on these clinical results, they should certainly be excited about this drug's potential.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.