It’s a buyer’s market for type 2 diabetes drugs, and you can thank FDA for that. At least, that is the sentiment of business development executives from Big Pharma. Transaction data in 2008 back up that view. Deals continue, but the money is gone (less than $50 million total in six transactions so far).

The change in the climate for diabetes deals didn’t happen overnight: you can go back to Bristol-Myers Squibb Co.’s disaster with Pargluva three years ago if you want to find a starting point for concerns that regulatory hurdles were fundamentally changing the economics of the class. But the new consensus seems to have solidified only this year—and may still not have filtered out to everyone pursuing type 2 diabetes projects.

Any change in the deal-making climate for one of Big Pharma’s biggest categories is an important event. But industry’s new aversion to diabetes deals is also a compelling case study in how regulatory changes translate into business development practices—and how some companies may gain advantage by reading the tea leaves better than others.