This double-blind, double-dummy 3 arm study will evaluate the efficacy, safety and tolerability of taspoglutide versus pioglitazone in patients with type 2 diabetes mellitus inadequately controlled with sulfonylurea monotherapy or sulfonylurea plus metformin combination therapy. After an initial screening period, patients will be randomized to one of 3 groups, to receive a)taspoglutide 10mg sc weekly, b)taspoglutide 20mg sc weekly after 4 weeks of taspoglutide 10mg sc weekly or c)pioglitazone 45mg/day po after 4 weeks of pioglitazone 30mg/day po.The anticipated time on study treatment is 24 months, and the target sample size is 500+ individuals.

Inclusion Criteria:

• adult patients, 18-75 years of age;
• type 2 diabetes mellitus;
• treated with stable sulfonylurea monotherapy or metformin + sulfonylurea for >=12 weeks prior to screening;
• HbA1c >=7.0% and <=10% at screening;
• stable weight +/-5% for >=12 weeks prior to screening.

Exclusion Criteria:

• type 1 diabetes, diabetes resulting from pancreatic injury, or secondary forms of diabetes;
• clinically significant diabetic complications;
• clinically symptomatic gastrointestinal disease;
• >3 episodes of severe hypoglycemia within 6 months before screening.