Dose-Ranging Study In Subjects With Type 2 Diabetes Mellitus Who Are Treatment-Naive

Inclusion Criteria:

- Subjects with a documented diagnosis of T2DM and HbA1c ≥7.0% and ≤9.5% measured by the
central laboratory at Visit 1.

- Note: Subjects with HbA1c <7.5% must have a fasting fingerstick glucose ≥7 mmol/L
(126 mg/dL) at Week 0, prior to randomization.

- Note: The proportion of subjects who are randomized with an HbA1c <7.5% will be
limited to be no more than 20% (approximately 51 subjects)

- Subjects who are treatment-naïve, and have not taken insulin, or any oral or
injectable anti-diabetic medication in the past 3 months and have not taken a glucose
lowering agent for ≥4 weeks at any time in the past, or subjects who are newly
diagnosed and treated with diet and exercise for a minimum of 6 weeks

- Subjects who are 18 to 70 years of age inclusive at the time of Screening.

- Females of childbearing and non-childbearing and potential are eligible to participate
as follows:

- Women of childbearing potential must be willing to use one of the following
contraception methods: intrauterine device, condom or occlusive cap (diaphragm or
cervical/vault caps) plus spermicidal agent for at least 30 days prior to the
start of study medication, throughout the study and the follow-up visit. Note:
use of oral contraceptives is not permitted.

- Women of non-child bearing potential are defined as follows: females regardless
of age, with functioning ovaries who have a current documented tubal ligation, or
who are surgically sterile (i.e. documented total hysterectomy or bilateral
oophorectomy), or females who are post-menopausal.

All females must have a negative urine pregnancy test on the day of, and prior to
randomization.

- Informed Consent: a signed and dated written consent must be obtained from the subject
before any procedures are performed.

Exclusion Criteria:

- Metabolic Disease

- Diagnosis of Type 1 diabetes mellitus

- History of ketoacidosis which has required hospitalization

- Thyroid disorder

- TSH <0.4 MIU/L (<0.4 MCIU/mL) or >5.5 mIU/L (>5.5 MCIU/mL) at Screening

- BMI of <22 kg/m2 or >43 kg/m2

- Significant weight gain or loss (as defined as >5% of total body weight) in the 3
months prior to Screening

- Diabetic Medication

- Has taken insulin, or any oral or injectable anti-diabetic medication within 3
months of screening

- Has taken insulin or any oral or injectable anti-diabetic medication ≥4 weeks at
any time in the past

- Cardiovascular Disease

Recent history or presence of clinically significant acute cardiovascular disease
including:

- Documented myocardial infarction in the 6 months prior to Screening.

- Coronary revascularization including percutaneous transluminal coronary angioplasty
(PTCA) or coronary artery bypass graft (CABG) surgery either planned and/or occurred
in the 6 months prior to Screening.

- Unstable angina in the 6 months prior to Screening.

- Clinically significant supraventricular arrhythmias requiring medical therapy, or
history of nonsustained or sustained ventricular tachycardia. Symptomatic valvular
heart disease or valvular heart disease requiring therapy other than endocarditis
prophylaxis.

- Congestive heart failure (CHF, New York Heart Association (NYHA) Class II to IV)
requiring pharmacologic treatment or the NYHA Class criteria in accordance with the
local prescribing information for pioglitazone.

- Blood pressure (BP) >150/100mmHg. If a subject is receiving permitted antihypertensive
therapy, then they must be on stable dose(s) of therapy for at least 4 weeks prior to
Screening.

- Based on local readings, the subject has an initial QTc interval (Bazett's)≥450msec at
Screening, and after two additional ECGs taken 5 minutes apart, the average of the QTC
interval from the three ECGs is ≥450msec.

- Other clinically significant ECG abnormalities which, in the opinion of the
Investigator, may affect the interpretation of efficacy or safety data, or which
otherwise contraindicates participation in a clinical trial with a new chemical
entity.

- Fasting triglycerides ≥400mg/dL (4.56mmol/L) at Screening. If a subject is receiving
permitted lipid-lowering therapy, then they must be on a stable dose(s) of therapy for
at least 6 weeks prior to Screening. Niacin and bile acid sequestrants are prohibited.

- Hepatic Disease

Has a diagnosis of active hepatitis (hepatitis B surface antigen or hepatitis C antibody),
or clinically significant hepatic enzyme elevation including:

Any one of the following enzymes greater than 2 times the upper limit of the reference
range (ULRR) value at Screening.

- alanine aminotransferase (ALT)

- aspartate aminotransferase (AST)

- alkaline phosphatase (AP) Has a total bilirubin level that is >1.5 times the ULRR at
Screening with the exception of suspected or confirmed Gilbert's disease.

- Pancreatic Disease

- Secondary causes of diabetes:

- history of chronic or acute pancreatitis

- Renal Disease

Significant renal disease at Screening as manifested by:

- Glomerular filtration rate (GFR) <60mL/min (as calculated by Quest at Visit using the
Modification of Diet in Renal Disease (MDRD) equation

•≥1+ protein on urine dipstick

- Trace or ≥1+ leukocyte esterase on urine dipstick

- Trace or ≥1+ blood on urine dipstick

- Positive nitrite on urine dipstick

- Recurrent genitourinary tract infections defined as ≥2 episodes of complicated or
uncomplicated cystitis or pyelonephritis in the 6 months prior to Screening.

- Concurrent Disease

- Has any concurrent condition or any clinically significant abnormality identified on
the screening physical examination, laboratory tests (including blood electrolytes),
ECG, including pulmonary, neurological or inflammatory diseases, which, in the opinion
of the investigator, may affect the interpretation of efficacy and safety data, or
which otherwise contraindicates participation in a clinical trial with a new chemical
entity.

- History of significant co-morbid diseases active in the 6 months prior to Screening
(e.g., cholecystitis, acute pancreatitis, gastrointestinal disease, chronic diarrhea,
etc.).

- History of malignancy within the past 5 years other than superficial squamous cell
carcinoma (non-invasive on pathology) or basal cell carcinoma (successfully treated
with local excision).

- History of cervical cancer in situ treated definitively at least 6 months prior to
Screening.

- Concurrent Medication

Is currently taking or has taken any of the following medications in the 8 weeks prior to
Screening:

- Digoxin

- Warfarin and other oral anticoagulants (aspirin and non-steroidal anti-inflammatory
drugs are permitted)

- Bile acid sequestrants

- Niacin (excluding routine vitamin supplementation)

- Antiobesity agents (including fat absorption blocking agents)

- Oral or injectable corticosteroids (inhaled, topical and intranasal corticosteroids
are permitted)

- Loop diuretics

- Monoamine oxidase inhibitors and tricyclic amines

- Antiretroviral drugs

- St John's Wort

- Oral chromium 9.Breast Feeding 10.Other

- Current smoker who is unable to abstain from smoking while in the clinic at each visit

- Has a history of alcohol or substance abuse within the past year at Screening or
alcohol or substance abuse during treatment, as determined by the investigator:

- Unwilling to refrain from the use of illicit drugs and adhere to other protocol-stated
restrictions while participating in the study

- Has an average weekly intake of alcohol of >21 units or an average daily intake of >3
units (males) or an average weekly intake of >14 units or an average daily intake of
>2 units (females). One unit is equivalent to a half pint of beer or 1 measure of
spirits or 1 glass of wine

- Has participated in any study with an investigational or marketed drug in the 3 months
prior to Screening.

- In the opinion of the investigator has a risk of non-compliance with study procedures,
or cannot read, understand, or complete study related materials, particularly the
informed consent.

- Known allergy to any of the tablet or capsule excipients, or history of drug or other
allergy, which, in the opinion of the responsible study physician, contraindicates
participation.