(Corrects paragraph 4 to clarify that the 21 pct reduction referred to number of patients, not the number of blood sugar-low events)
* U300 shows improvement over insulin Lantus
* Sanofi plans to price U300 close to Lantus
PARIS, June 22 (Reuters) - An improved version of Sanofi's blockbuster insulin Lantus is better than the older drug at controlling blood sugar lows at night, a common side effect in diabetics treated with insulin, according two late-stage tests published on Saturday.
The results for the next-generation treatment, known as U300, could strengthen Sanofi's position as it defends its no. 2 spot in the $43 billion diabetes market from rival drugs.
Lantus, a synthetic insulin developed in the 1990s, is currently Sanofi's top-selling product. Last year it grew almost 20 percent to generate 5 billion euros ($6.6 billion) in sales - but is set to lose patent protection in 2015.
The new version has shown that significantly fewer patients, or 21 percent, experienced night-time blood sugar lows compared with those using Lantus, without any additional side effects.
Headline data from a second study of people taking high doses of insulin as well as diabetes pills confirmed the findings of the first study.
Full data from the two studies, which were presented at the American Diabetes Association meeting in Chicago, are expected by the end of 2013. This means Sanofi could potentially launch U300 in 2014, analysts say.
Pierre Chancel, who heads Sanofi's diabetes unit, said it was too early to give a timeline for a potential launch or provide specific sales forecasts, but said the company would aim to switch patients currently using Lantus over to the new product.
"Will it be a blockbuster? Probably yes," he told Reuters during a telephone interview.
A consensus compiled by Thomson Reuters Pharma has forecast annual sales of $974 million for U300 by 2018.
"The price would be comparable to Lantus or slightly higher, depending on the geography, but not like the pricing approach of Novo Nordisk," Chancel added.
The Danish drugmaker, the world's biggest insulin producer, has opted to sell its main drug hope, long-acting insulin Tresiba, at a considerable premium over Lantus in Europe as it is believed to hold some advantages over Sanofi's product.
Tresiba has already been approved in Europe and Japan, but is unlikely to be launched in the U.S. before 2018 while Novo Nordisk conducts more tests to satisfy regulators.
The setback for Tresiba has been good news for rival makers of insulin medicines such as Sanofi.
In addition to U300, the French group has also stepped up the development of a fixed combination of diabetes treatments Lantus and Lyxumia to sidestep an earlier setback with a similar pen device and take advantage of the delayed U.S. launch of Tresiba.
Sanofi shares - which have gained 8.4 percent since January, in line with the sector index, up 8.9 percent, but outperforming the bluechip CAC40 index, up 0.5 percent - closed at 77.41 euros on Friday. (Reporting by Elena Berton and Noelle Mennella; Editing by Toby Chopra)