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PARIS (Reuters) - Exenatide, an experimental diabetes drug derived from lizard saliva, not only controls patients' blood sugar levels but also cuts their weight, its developers said on Monday.

Amylin Pharmaceuticals Inc and Eli Lilly and Co released new study findings on the efficacy of exenatide at the 18th Congress of the International Diabetes Federation in Paris.

The drug, derived from the saliva of a lizard known as the Gila monster, is the first in a new class of therapies for type 2, or adult-onset, diabetes and is on track to be submitted for approval by regulators in 2004. Analysts forecast annual sales could top $500 million after three years.

The Gila monster lizard lives in the Arizona desert, only eating about four times a year. Its salivary secretions help prevent a sudden surge in blood sugar levels in response to these infrequent but large meals.

The latest exenatide test involved 155 patients who had failed to reach target glucose levels on established diabetes drugs metformin and sulfonylurea, or a combination of the two.

When researchers added injections of exenatide, 44 percent of patients who completed 24 weeks of treatment achieved glucose level averages within the target range, the companies said.

Patients also lost on average 7.5 pounds.

Amylin CEO, Dan Bradbury, told Reuters that being able to control the blood sugar levels of so many patients who had previously failed therapy was a "pretty exciting result."

The most frequently reported side effect in the study was mild to moderate nausea, which decreased with continued treatment.

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