ImClone Systems Incorporated announced that it has achieved a milestone in its license agreement with Merck KGaA for development of Erbitux outside of North America. The milestone relates to the approval in Switzerland of Erbitux for the treatment of patients with colorectal cancer who no longer respond to standard chemotherapy treatment with irinotecan. The achievement of the milestone triggered a $5 million equity milestone payment. Upon payment, ImClone Systems issued 127,199 shares of ImClone Systems' common stock to Merck KGaA, representing the sale of these shares at a ten per cent premium to market value as provided in the license agreement.
"This milestone payment represents the first achievement in our licensing agreements connected with the marketing approval of Erbitux," said Daniel Lynch, acting CEO of ImClone Systems. "This regulatory milestone is significant because it represents an important accomplishment for the company, but more importantly for patients with colorectal cancer."
Merck KGaA of Darmstadt, Germany, received the approval for Erbitux from Swissmedic based on the company's European clinical trial that included more than 300 patients. In December 1998, Merck KGaA licensed from ImClone Systems the right to develop Erbitux outside of the US and Canada and the co-exclusive right to develop Erbitux in Japan.
Erbitux is an investigational IgG1 monoclonal antibody designed to exclusively target and block the Epidermal Growth Factor Receptor (EGFR), which is expressed on the surface of certain cancer cells in multiple tumour types. Erbitux is designed to bind to and internalize EGFR and prevent natural ligands called growth factors from binding to the receptor and activating signaling to the tumour. Erbitux is also being studied in earlier stages of colorectal cancer, as well as in other types of cancer that express the EGF receptor, including lung, pancreatic, ovarian and head and neck cancers. The most common adverse events reported in clinical trials of Erbitux have been an acne-like rash, asthenia, diarrhea, nausea, abdominal pain and vomiting. Severe, potentially fatal hypersensitivity reactions were observed in a small percentage of patients.