LOS ANGELES (Reuters) - A mid-stage clinical trial of the experimental drug Qnexa showed that it lowered blood sugar and led to weight loss in patients with type 2 diabetes, drug developer Vivus Inc said Tuesday.

In the 28-week trial involving 206 subjects, the patients on Qnexa achieved a 1.2 percent reduction in hemoglobin A1c -- a key measure of blood sugar -- compared with a drop of just 0.6 percent for those treated with placebo.

Participants treated with Qnexa, which is also being developed for obesity, lost 8 percent of their starting body weight, compared with weight loss of 1.2 percent for the placebo group, Vivus said.

Qnexa is a combination of phentermine -- part of the notorious "fen-phen" diet pill -- and epilepsy drug Topamax, known generically as topiramate.

Vivus said Qnexa patients also had significant improvement in cardiovascular risk factors including blood pressure, triglyceride levels and waist circumference.

"We are exploring the possibility of proceeding into phase 3 for a diabetes indication," Vivus President and Chief Executive Leland Wilson said in a statement.

Vivus said 41 percent of trial patients treated with Qnexa were able to achieve the American Diabetes Association recommended HbAlc goal of 7 percent or lower, versus 26 percent of patients in the placebo group.

The incidence of hypoglycemia, or low blood sugar, was 6 percent for the Qnexa group and 5 percent for the placebo group.

Side effects were not serious, with the most common ones being nausea, constipation, dry mouth and dizziness, the company said.