Merck KGaA of Germany has lost a legal battle to secure rights to a follow-up to its cancer drug Erbitux outside North America.

The lawsuit, with Erbitux (cetuximab) developer ImClone Systems, centred on rights to IMC-11F8, an inhibitor of the epidermal growth factor (EGF) receptor. While Erbitux is a humanised antibody, IMC-11F8 is fully human, meaning that it should be safer and less prone to cause allergic side effects than its predecessor.

Erbitux is the brightest star in Merck’s portfolio, bringing in $258 million in 2005 in its first indication, colorectal cancer, and growth is expected to ramp up quickly this year following European approval in head and neck cancer last month. But Erbitux is facing competition from Amgen’s fully-human EGF receptor inhibitor panitumumab, which could be approved in late 2006.

IMC-11F8 would have been a valuable franchise extension for Merck, but the legal verdict, which is binding and cannot be appealed, leaves the exclusive rights to develop and commercialize IMC-11F8 outside the USA and Canada to ImClone. Commercial rights to this antibody in the USA, Canada and Japan fall within the scope of ImClone's commercial agreement with Bristol-Myers Squibb regarding Erbitux.

IMC-11F8, currently in Phase I testing in Europe, and the preliminary results of that study will be reported at the American Society of Clinical Oncology 2006 annual meeting. Disease-directed developmental trials of IMC-11F8 are expected to begin in the second half of 2006.