STOCKS NEWS EUROPE-Merck KGaA hit by rival drug fears

Shares in Merck KgaA (MRCG.DE) fall 3.5 percent, making them the top decliner among German large caps .GDAXI, as brokers highlight the looming risk to sales of its cancer drug Erbitux from Amgen's (AMGN.O) rival product Vectibix.

Banc of America-Merrill Lynch downgrades its stance on the chemicals and drugs company to "neutral" from "buy", arguing that competitive data on Vectibix in colon cancer, expected in the third quarter, represents an asymmetric downside risk.

At the same time, Bernstein upgrades Amgen to "outperform" from "market perform", based in part on expectations Vectibix will prove comparable to Erbitux and could have a superior label.

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