UPDATE 1-Sanofi signs $335 mln exclusive diabetes deal

* Diabetes candidate yet to begin Phase I clinical trial

* Sanofi could pay CureMD as much as $335 mln

* Shares slip 0.4 percent

(Adds shares, background)

PARIS, April 8 (Reuters) - Sanofi-Aventis SASY.PA has signed an exclusive agreement on a possible new diabetes treatment with U.S biotech CureDM as part of the French drugmaker's aim to become a leader in the spreading disease.

Sanofi could pay CureDM as much as $335 million on the drug candidate that is expected to begin an early-stage Phase I clinical trial this year.

The worldwide license agreement is on a new human peptide, Pancreate, which could restore a patient’s ability to produce insulin and other pancreatic hormones in type 1 and type 2 diabetes, Sanofi said on Thursday.

“Once fully developed, Pancreate has the potential to become the first regenerative treatment of type 1 and type 2 diabetes and to address the challenges that the growing diabetes epidemic poses on patients and healthcare systems,” research and development head Marc Cluzel said in a statement.

Sanofi shares were little changed, down 0.4 percent at 55.09 euros by 0859 GMT while the health index .SXDP fell nearly 1 percent.

The most common form of diabetes, type 2, is spreading across the globe as more and more people are becoming obese and overweight which leads to a resistance of insulin, a hormone that helps the body use glucose to regulate their energy.

The world's biggest maker of insulin, Novo Nordisk NOVOb.CO has said that rising rates of diabetes point to growth of about 20 percent a year in demand for insulin in emerging markets. (Editing by Jon Loades-Carter)