Genentech's blockbuster cancer drug Avastin faces a big challenge from ImClone Systems's Erbitux in lung cancer, Morgan Stanley analysts said on Monday, citing unpublished data.
The brokerage said it had learnt from "a reliable public source" that ImClone's medicine had demonstrated an unexpected survival benefit in a second Phase III trial -- the so-called BMS-099 trial for first line metastatic lung cancer.
The revelation came as Genentech announced fresh findings from a clinical trial called Avail showing that Avastin improved progression-free survival in patients with non-small cell lung cancer (NSCLC) but did not prolong their overall survival.
The results mean Erbitux has two Phase III trials with proven survival benefit compared with only one for Avastin, increasing the chances that Erbitux could pose a serious threat to Avastin in the lung cancer treatment market in future.
Avastin, which is vital to the future prospects of both Genentech and its associate Roche Holding, is already approved in NSCLC in the United States and Europe.
Erbitux was initially developed for colon cancer but its sponsors now want to use it in a wider range of tumour types.
It is sold in Europe by Germany's Merck KGaA and in the United States by Bristol-Myers Squibb .
Morgan Stanley said the companies had declined to confirm the Erbitux clinical trial news, but shares in Germany's Merck KGaA were likely to rally strongly, ahead of the big ASCO cancer meeting at the end of May.
"An additional 400 million euros revenue for Erbitux in 2012 would translate into a 15 percent increase in our Merck KGaA EPS estimate," the brokerage said.
"We are maintaining our current forecast of 300 million euros in lung in 2012 unchanged until we see the FLEX and BMS-099 data."