Inclusion Criteria:

• Male or female (post-menopausal and/or surgically sterile)
• Aged 18 to 70 years
• Diagnosed with type 2 diabetes mellitus of eight years or less in duration
• Being treated with OAD at stable maximum doses [defined as at least 10 mg/day glibenclamide (preferred), or 20 mg/day glipizide, with or without at least 1,500 mg/day metformin] for at least three months prior to screening
• Having fasting plasma glucose levels of 150-270 mg/dL and HbA1c levels of 7.5-11.0%

Exclusion Criteria:

• Greater than 3 severe hypoglycemic episodes within six months of screen
• Pregnant, breastfeeding, or intends to become pregnant
• Clinical signs or symptoms of liver disease, acute, or chronic hepatitis, or ALT greater than the upper limit of normal
• Positive hepatitis B surface antigen, hepatitis C antibody, or HIV test
• Patients with history of renal transplantation or renal dialysis or microalbuminuria defined as urine albumin > 200 mg/day
• History of insulin use within three months of screen
• History of diabetic ketoacidosis
• Treatment with any thiazolidinedione (e.g., rosiglitazone) within three months of screen
• History of lactic acidosis while on metformin therapy
• Complications of diabetes (e.g., neuropathy, nephropathy, and retinopathy)
• Clinically significant and currently active diseases
• Clinical significant abnormalities in medical history, physical examination, or laboratory examination