* Competitive process to find partner for anti-PD-L1 drug
* Experimental drug in hot new area for cancer research
* Merck plans increased investment in biosimilar drugs
* Pharma head Oschmann appointed deputy CEO (Adds details on drug, wraps in management changes)
FRANKFURT, Sept 18 (Reuters) - German drugs and chemicalsmaker Merck KGaA is in advanced talks with potentialpartners interested in its experimental cancer immunotherapydrug and expects to clinch a partnership deal before the end ofthe year.
Its medicine is a so-called anti-PD-L1 agent, one of anumber of new drugs from rival companies within the hot researcharea of immuno-oncology that are designed to make tumour cellsmore vulnerable to attack by the body's immune system.
U.S.-based Merck & Co, Bristol-Myers Squibb,Roche and AstraZeneca are viewed as the mainplayers in this new field, which analysts believe could developinto a market worth tens of billions of dollars in annual sales.
As a mid-sized competitor, Merck KGaA has decided to seek apartner for its product, which has already been given to morethan 500 patients in early-stage Phase I tests and is seen as apotential treatment in lung, ovarian and Merkel cell skincancer.
"We have initiated a competitive process to select the bestpartner for the global co-development and co-commercialisationof our anti-PD-L1 compound," Stefan Oschmann, the head of itspharma business, said in a statement on Thursday.
"We are currently in advanced discussions with majoroncology players and aim to reach an agreement by year-end."
Merck added that it planned to invest an additional 130 to150 million euros ($168 to $192 million) next year in its unitdeveloping cheaper copies of biotech drugs, known asbiosimilars, on top of 100 million euros this year, depending onthe outcome of ongoing clinical studies.
It said it would expand existing partnerships with India'sDr Reddy's and Brazil's Bionovis with another, as yetundisclosed in-licensing agreement for a late-stage biosimilar,initially for smaller emerging markets.
The Darmstadt-based company also announced it had appointedthe head of its pharma business, Stefan Oschmann, as deputychief executive.
Oschmann, 57, will share strategic management functions andrepresentation of the company with CEO Karl-Ludwig Kley as ofJan. 1, 2015, putting him in the frame to possibly succeed Kley,whose contract runs until September 2016.
Belen Garijo, 54, will take over leadership of the entirepharma business. Garijo is already CEO of Merck'sbiopharmaceutical division, Merck Serono, to which she will addconsumer health, allergy treatments and biosimilars.(1 US dollar = 0.7759 euro) (Reporting by Georgina Prodhan and Ben Hirschler; Editing byDavid Holmes)