AstraZeneca and Bristol-Myers Squibb have suffered a setback after regulators rejected their new diabetes drug dapagliflozin and asked for more data.

The US Food and Drug Administration has issued a complete response letter regarding the New Drug Application for dapagliflozin. In October, the agency pushed back the Prescription Drug User Fee Act (PDUFA) goal date to study data from recently-completed and ongoing Phase III clinical trials, which constituted a major amendment to the original NDA.

However it appears the information provided was not enough. The CRL requests additional data from ongoing studies and, more worryingly for AstraZeneca and B-MS, the FDSA "may require information from new clinical trials".

The rejection of dapagliflozin, the first drug in the class of sodium-glucose co-transporter 2 (SGLT2) inhibitors, is no great surprise. Last July, the FDA's Endocrinologic and Metabolic Drugs Advisory Committee voted 9-6 against recommending approval, noting the concerns of FDA staffers about possible liver damage and the potential link with breast and bladder cancer.

The companies said they will work closely with the FDA to determine the appropriate next steps for dapagliflozin. They are also in ongoing discussions with health authorities in Europe and other countries as part of the application procedures.

AstraZeneca and B-MS insisted they remain committed to dapagliflozin on the back of a development programme that has seen more than 5,000 patients treated with dapagliflozin in 19 trials. Investors are a bit concerned however, and at 9.40am (UK time), the Anglo-Swedish drugmaker's shares had slipped 1% to £30.78.