The results also showed there was no sign of the effect waning, signalling the potential for it to continue to drop past the 12-week mark.
Carson said the results were "as promising as you get".
Analysis of the effect of the drug on weight in the latest trial was not yet finished but that too was "promising", he said.
The next step was comparing the 0.9mg dose with a 1.8mg dose to see which was more effective. Patients were already being recruited for the trial around New Zealand.
Carson said the findings were significant because type 2 diabetes was "a huge burden in New Zealand".
"About 300,000 people have type 2 diabetes and 100,000 haven't been diagnosed yet," he said.
With such a high prevalence of diabetes, and the latest figures suggesting almost a third of New Zealanders were obese with a further 35 per cent overweight, more treatment options were needed.
Christchurch-based truck driver Jacquie Moore, 51, took part in the first phase two study which began shortly after she was diagnosed with diabetes.
She was glad to hear the results had been positive and said she had also seen a reduction in her weight and glucose levels although she was unsure if that was a result of the drugs or the lifestyle changes she had made after her diagnosis.
Moore said she had lost about 8kg but had put some back on since the start of winter because the cold weather made it more difficult to get out and exercise.
She was hopeful the drug might one day be available to everyone with type 2 diabetes and encouraged people to sign up for the trial.
"At least it could help someone else down the track," she said.
Dr Richard Carroll, an endocrinologist in Wellington who was helping run the study in the area, said New Zealand's "treatment armoury" was limited compared to much of the rest of the world and many drugs which helped people with diabetes actually resulted in weight gain.
One of the cornerstones of diabetes management was a lifestyle change which included weight loss, Carroll said, but losing weight and keeping it off was incredibly hard for many people.
"We'd like to see that focus in early diabetes with weight loss through lifestyle changes and complementing that with medicine."
About the study
• Eleven clinics in Christchurch, Wellington, Auckland, Hamilton, Hawke's Bay and the Bay of Plenty taking part in phase two with another 12 clinics in Australia.
• Participants must have type 2 diabetes and not be using insulin.
• Participants must have a BMI of at least 30 and a blood sugar level of between 7 and 11 per cent.
• Go to www.diabetes2clinicaltrial.com to find the nearest clinic offering the trial and see if you are eligible.