Merck KGaA has taken its relationship with ImClone Systems and Bristol-Myers Squibb a stage further and signed a deal with its US partners to jointly develop and commercialise the oncology drug Erbitux.

Initially, the three firms have agreed to develop and, following regulatory approval, market Erbitux in Japan for the treatment of epidermal growth factor receptor-expressing metastatic colorectal cancer, as well as for any other indications the parties agree to pursue. B-MS and Merck KGaA will use their respective sales forces to shift the product and the latter’s Merck Serono Japan unit will distribute the product.

Under the financial terms of the agreement, Merck will receive 50% of the profits from sales in Japan, and ImClone and B-MS will each receive 25% and in addition to this, ImClone will get a royalty from the German-headquartered firm equal to 4.75% of total net sales in Japan. The three firms submitted an application in Japan earlier this year based on results from studies conducted in North America, Europe and Japan and Erbitux is the first monoclonal antibody that inhibits EGFR to be submitted for marketing authorisation in that country.

Merck noted that the incidence of colorectal cancer in Japan has increased markedly during the last 50 years and in terms of mortality, it ranks third after lung and stomach cancer. An approval there would be a great boost especially as Erbitux sales have actually slowed in the USA of late, though ImClone and B-MS are exploring further commercial opportunities in North America for the drug. Merck has the European licence for the drug.