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Germany's Merck sees long-term growth in cancer drug Erbitux

DARMSTADT, Germany (Reuters) - German healthcare company Merck KGaA expects to get a long-term boost from study results in June that showed its main cancer drug Erbitux has an edge over rival product Avastin.

Erbitux, which accounted for roughly 8 percent of Merck's 10.7 billion euros ($14.6 billion) in sales last year, in June was shown to be more effective at prolonging the lives of colorectal cancer patients than Roche's Avastin.

Only patients whose tumors contain the non-mutated version of a gene called KRAS took part in the trial. Erbitux is only approved in this patient subgroup, which accounts for about 60 percent of colorectal cancer cases.

"We still have room to grow in colorectal cancer due to our personalized KRAS-approach," Belen Garijo, the head of Merck's prescription drugs division, told Reuters.

She said the study results would help her marketing teams argue the case for Erbitux, which unlike Avastin, requires doctors to perform a genetic test on the cancer tissue before starting therapy.

Depending on the country, the testing can delay treatment by anything from a few days to one and a half weeks, making it a priority for Merck to provide support for faster testing and lab procedures, Garijo said.

Merck has the marketing and development rights to Erbitux outside North America, while Bristol-Myers Squibb sells the product in North America with Eli Lilly receiving royalties.

Garijo's projections for long-term growth are at odds with analysts polled by Thomson Reuters Pharma, who on average expect Merck's Erbitux sales to peak at $1.25 billion in 2014, slipping to $1.1 billion by 2018.

One concern is that rivals will be free to launch their own versions of the biotech drug, so-called biosimilars, in Europe from 2015.

Amgen Inc, for instance, said in February it expects biosimilars to be a multibillion-dollar opportunity and that it would develop generic versions of six established biotech drugs including Erbitux.

Garijo, however, said that biosimilars were not a concern, saying that years of data on safety and efficacy on Erbitux would provide an edge over newcomers.

"We do not expect to see a biosimilar for Erbitux for quite a few years," she said.

Both Erbitux and Avastin are approved and are in use as initial treatments of metastatic bowel cancer in combination with chemotherapy.

Merck had 887 million euros ($1.21 billion) in Erbitux sales last year, from head and neck as well as bowel cancer, while Bristol-Myers Squibb generated $702 million in sales from the drug.

Roche had 5.76 billion Swiss francs ($6.00 billion) in Avastin sales last year.

Merck, based in Darmstadt near Frankfurt, is in chemicals as well as pharmaceuticals and is the world's largest maker of liquid crystals for flat screen displays.

(Reporting by Ludwig Burger and Frank Siebelt; Editing by Jane Merriman)

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