WASHINGTON (AP) – Federal health regulators on Friday approved a potential blockbuster diabetes drug from Bristol-Myers Squibb Co. and partner Astrazeneca PLC.

The Food and Drug Administration said it approved the companies’ drug Onglyza to reduce blood sugar levels in patients with type 2 diabetes, which affects 24 million people in the U.S.

The drug is part of a new wave of medications taking aim at the U.S. diabetes market, which has grown to more than $5 billion in annual sales for drugmakers as the disease becomes more prevalent.

Onglyza’s chemical makeup is similar to Merck’s Januvia, which had blockbuster sales of $1.4 billion last year.

Analyst estimates of Onglyza’s market potential vary, given its similarity to a more established drug. Sales estimates range from $300 million per year to more than $1 billion.

The drug is the first to gain approval since the agency issued new testing guidelines for diabetes treatments last year. Concerns about heightened risks of heart attack with GlaxoSmithKline’s pill Avandia created a storm of controversy around the FDA and its safety standards for popular diabetes treatments.

Data from eight clinical trials conducted by New York-based Bristol-Myers and Anglo-Swedish AstraZeneca did not show evidence of higher rates of heart attack, stroke and other problems. Despite such evidence, the FDA said it will require the companies to conduct a follow-up study examining those problems in high-risk patients, including the elderly and those with existing heart conditions.

WBB Securities analyst Steve Brozak said he expects the drug’s annual sales to surpass $1 billion, due to aggressive marketing and growing need for diabetes treatments.

“One of the reasons the large drug companies have focused on this area is that it is an endemic health care problem in the U.S. and globally,” Brozak said. “And all things being equal, the FDA will give them greater leeway on negative side effects, because to do nothing is no longer an acceptable option.”

People with the disease have trouble breaking down carbohydrates, because their bodies have become resistant to the protein insulin. They are at higher risk for heart attacks, kidney problems, blindness and other serious complications.