Roche Holding AG (ROG.VX) said Thursday its experimental diabetes drug taspoglutide worked better than a rival drug sold by Eli Lilly & Co. (LLY) in lowering blood sugar, according to the results of a late stage study.

The study marks a small step on the way to possible approval of the drug, for which Roche has seven additional trials underway.

Roche, based in Basel, acquired the worldwide marketing rights, excluding Japan and France, to taspoglutide from French drugmaker Ipsen SA (IPN.FR) in 2006, in a deal that allows Ipsen to retain co-marketing rights for France if it so wishes.

Roche will present details of the trial, including how much better taspoglutide worked and details on side effects, at an upcoming international scientific meeting, the company said.

After 24 weeks of treatment, patients who had been given taspoglutide experienced a bigger decline in their blood sugar than those who had been given Byetta, a drug sold jointly by Eli Lilly and Amylin Pharmaceutical Inc. (AMLN), Roche said. The most frequently reported side effect from both drugs were nausea and vomiting.

Roche shares were unchanged at CHF164.10 in early trading Thursday.

Company Web Site: www.roche.com

-By Anita Greil, Dow Jones Newswires; +41 43 443 8044 ; anita.greil@dowjones.com