LONDON, Jan 19 (Reuters) – U.S. drug regulators need further clinical data, possibly including new clinical studies, before approving a new diabetes drug from AstraZeneca and Bristol-Myers Squibb.

The two companies said on Thursday they had received a so-called “complete response letter” from the Food and Drug Administration (FDA) for dapagliflozin as a treatment for type 2 diabetes in adults.

The news is a setback for both drugmakers, compounding other recent pipeline disappointments in cancer for Bristol, and both cancer and depression for AstraZeneca.

The two partners said they remained committed to dapagliflozin and its development but the FDA decision further dims prospects for the once-a-day drug, which is seeking to compete in an already well-supplied diabetes market.

“The drug has had little support from diabetes experts and the diabetes field is already crowded with a host of different therapeutic options, many of which are now available generically,” Bernstein analyst Tim Anderson said in a research note.

Hopes for dapagliflozin have dimmed since July, when an FDA panel of outside experts voted against recommending approval over concerns about liver injury and cancer risks. The panel said at the time it did not think clinical data provided enough certainty about the drug’s safety.

FDA staff have been pondering dapagliflozin’s future since then. Regulators have become more cautious about new diabetes drugs following a past controversy over GlaxoSmithKline’s Avandia, which was linked to heart risks.