UPDATE 2-Genmab wants partner for cancer drug zalutumumab

* CEO says essential to find partner for U.S. market

* Could seek European approval based on Phase III trials

* U.S. application requires further study

* Shares gain as much as 5.7 pct

(Recasts with CEO quotes, details; updates share price)

By Shida Chayesteh

COPENHAGEN, Oct 18 (Reuters) - Danish biotech firm Genmab GEN.CO aims to find a partner for further testing and development of its cancer drug zalutumumab to help get it onto the U.S. market, Genmab's chief executive said on Monday.

Genmab said earlier that it had received encouraging feedback on zalutumumab in preliminary, non-binding discussions with a number of national European regulatory authorities and the U.S. Food and Drug Administration.

Genmab said that phase III trials with zalutumumab could form the basis for applying for marketing approval in Europe, although more studies would be needed before submitting an application in the United States.

The announcement lifted Genmab shares as much as 5.7 percent. They traded up 3.6 percent at 74.05 crowns at 1245 GMT, outperforming a 0.5 percent rise in the MSCI European pharma, biotech and life sciences index .MIEU0PB00PEU.

“The crucial thing now is to find a partner in the U.S. so that we can go further with this process,” Chief Executive Jan van de Winkel told Reuters.

Genmab has partnered with GlaxoSmithKline GSK.L in developing leukemia drug ofamamutab, sold as Arzerra.

Zalutumumab needs to be tested on a bigger group of patients, and that would cost hundreds of millions of dollars, van de Winkel said.

He added that the chance of finding a partner had improved by the encouraging feedback from regulators.

The company has conducted a Phase III study with zalutumumab in patients with recurrent or metastatic squamous cell carcinoma of the head and neck who failed standard platinum-based therapy. The findings were reported earlier this year.

“Based on overall feedback from regulatory authorities in Europe, Genmab believes a marketing authorisation application (in Europe) for zalutumumab could be pursued based on the data from the Phase III study,” Genmab said in a statement.

Additional clinical study data would, however, be required before submitting a regulatory application in the United States, it added.

“Our discussions with the regulatory authorities have been very productive and we are encouraged by the overall feedback we have received,” van de Winkel said in the statement.

Van de Winkel told Reuters he expected zalutumumab to be approved by authorities in Europe faster than in the United States, but he said demand was potentially bigger in Europe because a rival drug, Erbitux, is already on the U.S. market.

Erbitux from Merck MRCG.DE, Eli Lilly LLY.N and Bristol-Myers Squibb BMY.N is approved for bowel and head and neck cancer. Sales last year were $1.7 billion.

“It will take longer to get marketing permission in the United States than in Europe, but I am sure that we will get it once we have carried out the clinical studies,” the CEO said.

He said he had “significant” expectations for zalutumumab as it is part of a market that has potential for annual sales of more more than $2.5 billion.

“The potential market is really big once we have carried out the clinical tests,” he said. (Additional reporting and writing by John Acher; Editing by David Holmes and Michael Shields)