Eli Lilly and Co. said its experimental diabetes drug dulaglutide lowered blood sugar better than three existing diabetes drugs in three Phase 3 clinical trials.

The announcement, made early Monday, sent stock in Indianapolis-based Lilly up as much as 2.1 percent, to $53.99 per share, before cooling off later in the morning.

Patients receiving once-weekly injections of dulaglutide saw their levels of hemoglobin A1C—a key measure of blood sugar—go down more than patients in the trials taking metformin, Byetta or Januvia.

Lilly said the greater effect of dulaglutide was statistically significant in the trials, which included more than 2,600 patients, but the company did not disclose detailed results from the trials.

Lilly said it would present more data about dulaglutide during medical conferences in 2013 and 2014. Lilly plans to file for regulatory approval of dulaglutide next year.

Analysts expect the drug to hit the market in 2014 or 2015 and become a blockbuster.

Chris Schott, an analyst at JP Morgan Chase, expects dulaglutide to rack up $1.1 billion in sales by 2020. Jami Rubin, a pharmaceutical analyst at Goldman Sachs Group, thinks dulaglutide could hit $1 billion in sales as soon as 2017.

Dulaglutide is known as a glucagon-like peptide, or GLP-1. In 2005, Lilly helped launch the first GLP medicine, Byetta, in partnership with California-based Amylin Pharmaceuticals Inc. The two companies also launched a once-weekly version of Byetta, called Bydureon, last year.

But after a dispute between the two companies last year, Lilly agreed to sell its rights to Byetta and Byrdureon for a $250 million break-up fee and royalties up to $1.2 billion over the life of Byetta. Instead, Lilly decided to bet on dulaglutide.

"We're very encouraged by the results to date from our Phase III dulaglutide trials and are pleased to be one step closer to offering a new GLP-1 treatment option for type 2 diabetes," said Enrique Conterno, president of Lilly’s diabetes division, in a prepared statement.

If approved, dulaglutide would also have to compete with another GLP-1 drug, Victoza, which is made by Denmark-based Novo Nordisk A/S and has proved superior to Byetta.

It would also compete against Januvia, made by New Jersey-based Merck & Co. Inc., which is a popular oral drug that lowers diabetics’ blood sugar. Last year, Lilly launched its own oral diabetes medicine, called Tradjenta, in partnership with Germany-based Boehringer Ingelheim GmbH. Sales of the drug have so far been modest.