The purpose of the study is to evaluate the efficacy, tolerability and short-term safety of LIK066 to support dose selection for phase 3.

Inclusion Criteria:

1. Confirmed diagnosis of T2DM by standard criteria
2. Drug-naïve patients, defined as patients not having received any anti-diabetic medication previously,
3. Currently untreated patients , who, after the diagnosis of T2DM, have received anti-diabetic medication for not more than 12 consecutive weeks, and have not received any anti-diabetic treatment within 12 weeks prior to Visit 1
4. Patients being treated with mono-therapy for at least 8 consecutive weeks prior to Visit 1 with the following OADs: metformin, dipeptidyl peptidase-4 inhibitors (DPP-4i), SU, glinide, alpha-glucosidase inhibitor (AGI)
5. HbA1c ≥ 7 to ≤ 10.5% at Visit 1 for drug-naïve/currently untreated patients
6. HbA1c ≥ 7 to ≤ 9.5% at Visit 1 for patients treated with OAD monotherapy
7. HbA1c ≥ 7 to ≤ 10.5% at Visit 199 for ALL patients
8. Age: ≥18 and ≤ 75 years old at Visit 1
9. BMI ≥22 to ≤45 kg/m2 at Visit 1

Exclusion Criteria:

1. FPG ≥270 mg/dl (15 mmol/L) for drug-naïve/currently untreated patients or ≥240 mg/dl (13.3 mmol/L) for patients on OAD monotherapy at Visit 1
2. Insulin treatment >4 consecutive weeks in the last 6 months, corticosteroid use >7 days in the last 8 weeks, use of growth hormones in the last 6 months, or use of weight control products > 4 weeks in the last 6 months
3. History of acute metabolic complications, CV disease, type 1 diabetes mellitus, hepatic disorders, pancreatitis, chronic diarrhea
4. Significant lab abnormalities such as TSH outside of normal range, UACR>300 mg/g creatinine, eGFR <60 ml/min/1.73m2, hemoglobin <12 g/L in men and <11 g/L in women, hematuria
5. ECG abnormalities including AV block, long QT syndrome or QTc>450 msec for men and >470 msec for women
6. History of malignancy
7. Women of child-bearing potential not using effective methods of contraception Other protocol-defined inclusion/exclusion criteria may apply