Phase II Safety and Efficacy Study of Oral ORMD-0801 in Patients With Type 2 Diabetes Mellitus

Inclusion Criteria: * HbA1c ≥7.5% if naïve to antidiabetic therapy; ≥6.5% and ≤10% if on metformin ≥1,500 mg daily; ≥6.5% and ≤9.5% if on monotherapy with an antidiabetic drug other than metformin; ≥ 6.5% and ≤9.5% if on metformin and one other antidiabetic drug; ≥ 7.0% if on metformin \<1,500 mg daily. * At time of randomization, patients will be treated for their diabetes by diet, exercise, and metformin (≥1500 mg/day; any type and regimen). Patients will have been on a stable regimen of metformin (defined as the same metformin dose and type) for at least two weeks prior to entering the single-blind placebo run-in period. * Other antidiabetic agents will not be used for the two weeks prior to entering the placebo run-in period. * Patients in whom the maximum tolerated dose (MTD) of metformin is 1,000 mg will be allowed to enter the study. * At Day -7 (Visit 3), all patients will have HbA1c ≥ 6.5% and ≤10%. * Body Mass Index between 25 and 40 kg/m2, inclusive. * Fasting blood glucose ≥ 126 mg/dL (8.3 mmol/L) prior to randomization at Day -7 (Visit 3). For patients in whom the Day -7 (Visit 3) fasting blood glucose is \<126 mg/dL and ≥ 115 mg/dL, and the Day -7 (Visit 3) HbA1C is ≥ 7% and ≤ 10%, a minimum of 5 daily self- monitored fasting blood glucose checks recorded in the patient diary can be averaged. If the average value is ≥ 126 mg/dL, the patient may continue in the trial. * Females of childbearing potential must have a negative urine pregnancy test result at screening. A negative urine pregnancy test must be obtained during Visit 2 and at Visit 4 (prior to randomization). * Males and females of childbearing potential must use two methods of contraception (double barrier method), one of which must be an acceptable barrier method from the time of screening to the last study visit (Day 43). * Patient has \>80% compliance with placebo during run in prior to randomization. * Patient has ≥ 80% of the glucose readings on at least two 24 hour periods (6AM - 6AM) during the seven day CGM period. * Patient has performed ≥ 10/14 of the self monitored glucose level measurements during placebo run-in, prior to randomization. Exclusion Criteria: \- Patients who meet any of the following criteria are not eligible for this study. * Presence of any clinically significant endocrine disease according to the Investigator (euthyroid patients on replacement therapy will be included if the dosage of thyroxine is stable for at least six weeks prior to Screening Visit). * Clinical diagnosis of Type 1 diabetes. * Fasting blood glucose \>260 mg/dL at the end of Day -7/Visit 3. For patient in whom the Day 07 (Visit 3) fasting blood glucose is \> 260 mg/dL and \< 300 mg/dL, and the Day -7 (Visit 3) HbA1C is ≥ 7% and ≤ 10%, a minimum of 5 self-monitored fasting blood glucose checks recorded in the patient diary can be averaged. If the average value is ≤ 260 mg/dL, the patient may continue in the trial. * Presence or history of cancer within the past five years with the exception of adequately-treated localized basal cell skin cancer or in situ uterine cervical cancer. * Laboratory abnormalities at screening including: 1. C-peptide \< 1.0 ng/mL. 2. Positive pregnancy test in females of childbearing potential (at screening and start of run-in period). 3. Abnormal serum thyrotropin (TSH) levels \>1.5 times the upper limit of normal. 4. Positive test for hepatitis B surface antigen and/or hepatitis C antibody. 5. Positive test for HIV. 6. Serum Cr \>1.4mg/dl in males, \>1.3mg/dl in females. 7. Any relevant abnormality interfering with the efficacy or the safety assessments during study drug administration. * Use of the following medications: 1. History of use of insulin for greater than one week in the last six months and any use of insulin in the last six weeks prior to randomization. 2. Administration of anti-diabetic drugs other than metformin within four weeks prior to randomization visit. Administration of thyroid preparations or thyroxine within six weeks prior to screening visit. (Patients on stable thyroid replacement therapy for greater than 6 weeks may enter the study.) * Administration of systemic long-acting corticosteroids within two months or prolonged use (more than one week) of other systemic corticosteroids or inhaled corticosteroids within 30 days prior to screening visit. * Use of medications known to modify glucose metabolism or to decrease the ability to recover from hypoglycemia such as oral, parenteral, and inhaled steroids (as discussed above), beta blockers (with the exception of beta blocker ophthalmic solutions for glaucoma or ocular hypertension), and immunosuppressive or immunomodulating agents. * History of tobacco or nicotine use in excess of two packs/day within ten weeks prior to screening. * Patient is on a weight loss program and is not in the maintenance phase, or patient that started any approved or non approved weight loss medication within eight weeks prior to screening. * Pregnancy or breast-feeding. * Patient has a screening visit systolic blood pressure of ≥160 mm Hg or diastolic blood pressure of ≥100 mm Hg Patients will be allowed to take BP medication as long as they have been on a stable dose for a period of four weeks prior to the screening visit. * Patient is, at the time of signing informed consent, a user of recreational or illicit drugs or has had a recent history (within the last year) of drug or alcohol abuse or dependence. (Note: Alcohol abuse includes heavy alcohol intake as defined by \>3 drinks per day or \>14 drinks per week, or binge drinking). * Elevated liver enzymes (alanine transaminase (ALT), alanine aminotransferase (AST), alkaline phosphatase) greater than two times the upper limit of normal at screening. * Very high triglyceride level (\>500 mg/dL) at screening. * Any clinically significant electrocardiogram (ECG) abnormality at screening or cardiovascular disease. Clinically significant cardiovascular disease will include: 1. History of stroke, transient ischemic attack, or myocardial infarction within six months prior to screening, 2. History of or currently have New York Heart Associate Class II-IV heart failure prior to screening, or 3. Uncontrolled hypertension defined as blood pressure ≥160 mmHg (systolic) or ≥100 mmHg (diastolic) at screening.