AstraZeneca and Bristol-Myers Squibb Co. announced today that they are expanding their collaboration to include the development and commercialization of a diabetes drug in Japan.

Dapagliflozin, which regulates the reabsorption of glucose in the kidney, is one of two investigational drugs under joint development by the companies. It is in Phase III clinical trials in several countries, including the United States, as a once-daily treatment for Type 2 diabetes. It is in Phase II clinical trials in Japan.

London-based AstraZeneca, which has U.S. operations near Wilmington, and Bristol-Myers, headquartered in New York with operations around Princeton, had announced in January 2007 that they would collaborate on two new diabetes compounds.

AstraZeneca would pay development and regulatory costs for dapagliflozin, with Bristol-Myers Squibb making and drug and booking sales. They two companies would share marketing costs and profits.

"Last year, the cost of treating and preventing type 2 diabetes and its complications in Japan was more than USD 18.4 billion, which is a significant cost to Japanese society," said Bruno Angelici, AstraZeneca's executive vice president of international sales and marketing organization.

The two companies also are collaborating on saxagliptin, which they would market as Onglyza. It a DPP-4 inhibitor being studied in clinical trials as a once-daily therapy.

The companies submitted a new-drug application to the Food and Drug Administration on June 30, and a marketing authorization application to the European Medicines Agency on July 1 for saxagliptin.

AstraZeneca shares were trading at $40.22, up $1.37 (3.53 percent) in late morning trading; Bristol-Myers shares were priced at $22.01, up 78 cents (3.67 percent).