FDA approves new diabetes drug Onglyza

Federal health regulators on Friday approved a potential blockbuster diabetes drug from Bristol-Myers Squibb Co. and partner Astrazeneca PLC.

The Food and Drug Administration said it approved the companies' drug Onglyza to reduce blood sugar levels in patients with type 2 diabetes, which affects 24 million people in the U.S.

The drug is part of a new wave of medications taking aim at the U.S. diabetes market, which has grown to more than $5 billion as the disease becomes more prevalent.

Onglyza's chemical makeup is similar to Merck's Januvia, which had blockbuster sales of $1.4 billion last year.

Analyst estimates of Onglyza's market potential vary, given its …