WASHINGTON (CNNMoney.com) - An experimental drug from Novartis can reduce blood-sugar levels in diabetics when combined with the Takeda drug Actos, according to late-stage studies released Tuesday.

Galvus, or vildagliptin, an experimental once-daily pill from the Swiss drug maker Novartis (Research), reduces blood-sugar levels of 1.9 percent on average in diabetics when combined with Actos, according to a Novartis-funded study.

The results were stronger when the Galvus-Actos combination was used in diabetics with excessively high levels of blood sugar. Those diabetics experienced an average reduction of 2.8 percent, according to the study. In addition, diabetics at least 65 years of age had, on average, blood-sugar reductions of 2.3 percent with the combination.

Dr. Ameet Nathwani of Novartis said Galvus resulted in a nearly fivefold increase in the function of beta cells, which make insulin. This is an important detail, because it could help the drug gain a competitive edge in the diabetes market by helping early-stage diabetics postpone the need to begin taking insulin.

Also, Galvus showed no weight gain in one comparison study, while obese diabetics lost a slight amount of weight in another. This is important in the treatment of diabetics, who often gain weight from the use of insulin. Obesity is one of the factors that leads to the onset of type 2 diabetes, and diabetics are constantly being told by their doctors to lose weight, thus the industry term "diabesity."

The blood-sugar results were effective, but less impressive, in diabetics who took Galvus alone, or in combination with the generic treatment metformin. Those patients reduced their blood-sugar levels by 1.1 percent, on average.

The study was announced at the annual conference of the American Diabetes Association and focused on diabetics with type 2, the most common type of the disease. Diabetics typically suffer from high blood-sugar levels that, if left untreated, can lead to nerve and organ damage, according to the Mayo Clinic.

Galvus is a member of a new class of drugs called DPP-4 inhibitors. Merck is also working on an experimental DPP-4 inhibitor called Januvia, or sitagliptin phosphate.

Merck (Research), the No. 2 U.S. drug manufacturer, and Novartis could soon be vying for control of the $12 billion-plus diabetes drug market. Both of their experimental diabetes drugs are pills that are taken orally once a day, both are in the same class of drugs, and both have been filed with the FDA.

Merck filed its Januvia application to the FDA in February, ahead of Novartis' Galvus filing in March, so it's expected to enter the market first, assuming regulatory approval. Merck expects the FDA to make its decision on Januvia by mid-October.

Merck was expected to release data on Januvia at 9 a.m. ET, and this will paint a better picture of the competitive atmosphere between the two potential products.

Prior to the release of Tuesday's studies, analyst sales projections for Galvus were higher than Januvia, but both are expected to be blockbusters, with annual sales exceeding $1 billion.

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