Merck KGaA's Erbitux Data May Be Upstaged By Rival Vectibix

German pharmaceutical company Merck KGaA's (MRK.XE) Merck Serono division will learn key survival rate data for its drug Erbitux among metastatic colon cancer patients from an independent study at an oncology conference starting this weekend in Berlin.

But analysts say Merck's data may be upstaged at the same conference by Amgen Inc.(AMGN), which is expected to reveal the efficacy of its rival drug Vectibix as a primary and secondary treatment with chemotherapy for the same type of colon cancer patients.

Erbitux, a monoclonal antibody whose active ingredient is called cetuximab, is already approved as a primary treatment in combination with chemotherapy for colon cancer.

Amgen's Vectibix, which contains the active ingredient panitumumab, has been approved to treat colon cancer after chemotherapy fails. If Amgen's data is good, analysts say Merck stands to lose substantial market share.

"The market expectations are high for Vectibix and its study data," wrote UniCredit analyst Markus Mayer in a note. "Good results would be a negative trigger for the Merck share price."

The results are to be presented at the European Society for Medical Oncology congress running between Sept. 20 and Sept. 24 in Berlin.

Both drugs are approved in the U.S. and Europe and are seen as blockbusters, with the potential to earn the companies peak annual sales of at least EUR1 billion. Erbitux is also approved to treat head and neck cancer and is sold in the U.S. by Eli Lilly & Co. (LLY) and Bristol-Myers Squibb Co.(BMY).

Both are vying for the same group of colon cancer patients who carry a normal form of a gene called KRAS. Studies show patients who have a mutated form of the gene - about a third of all colon cancer patients - do not respond to Vectibix and Erbitux. In July, the U.S. Food and Drug Administration revised the labels on the drugs to recommend that they not be used to treat patients with the genetic mutation.

In August, Amgen said the PRIME study met its goals, meaning patients taking Vectibix showed significant improvement compared with those on standard chemotherapy alone. Full results will be presented at the congress.

JPMorgan said in a note that Vectibix could snare as much as half of Erbitux's market share in colon cancer treatment. However, the brokerage added that positive Erbitux survival data could blunt some of the blow.

Either way, JPMorgan said the data "should have a significant impact on Erbitux's market share going forward."

Exane BNP Paribas analysts said in a note that they expect comparable efficacy data from the studies and estimate the drugs will each capture 30% market share in 2013.

A Merck spokeswoman declined to comment about the Erbitux data, noting it comes from an independent study.

Survival data from the Erbitux study are expected to be presented on Sept. 23. Amgen is scheduled to present data for Vectibix as a secondary treatment on Sept. 22 and as a primary treatment on Sept. 24.

Company Web sites: www.merck.de/; www.amgen.com/

-By Allison Connolly, Frankfurt Bureau; [phone], [e-mail]