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The 24-year-old Simoncelli had his helmet knocked off in the accident, which occurred when the Italian lowsided from his bike at Turn 11.
His bike veered across the track and straight into the path of Edwards and Rossi. The race was immediately red-flagged.
Simoncelli, who was motionless on the track after the impact, had been fourth at the end of lap one.
Edwards also fell but escaped serious injury, while Rossi, on a Ducati, was able to return to the pits.