BioWorld International Correspondent

LONDON - Cambridge Antibody Technology (CAT) Group plc received about £13.4 million (US$25 million) from Abbott Laboratories after the pharmaceutical company wasn't able to appeal a High Court judgment in CAT's favor and ordered to pay royalty arrears on sales of the blockbuster rheumatoid arthritis drug Humira.

Abbott also agreed to make an interim payment of about £2.9 million toward CAT's legal costs, after Justice Laddie announced his decision on matters arising from his judgment on Dec. 20 in which he said Abbott should raise the royalty rate it was paying on net sales of Humira, from 2 percent to 5 percent.

Although not granted the right to appeal by the trial judge, Abbott can apply directly to the Court of Appeal for permission.

Peter Chambré, CAT CEO, told BioWorld International, "This is of great significance for CAT. Assuming the ruling stands, what it provides us with is a significant, stable and hopefully growing royalty income."

The decision is good news also for the UK Medical Research Council, which licensed the phage display technology at the heart of the royalties fight to CAT. CAT will earn royalties on a sliding scale of 5 percent to 6 percent depending on sales, of which the MRC is entitled to about 2 percent.

Last week Abbott reported that sales of Humira reached $852 million in 2004, and upped the forecast for 2005 to $1.3 billion. It also is developing the anti-TNF alpha monoclonal antibody in six further indications including Crohn's disease, psoriatic arthritis and ankylosing spondylitis, which the Abbott Park, Ill.-based company said could add a further $1 billion annually.

The payment by Abbott to CAT comprised $23.7 million representing royalty arrears and $1.3 million for interest and loss on the dollar/pound exchange rate. Chambré said that covers all the arrears CAT is owed.

Abbott was obliged to make the payments, and doing so does not prejudice the company's right to appeal.

CAT and Abbott have another licensing agreement for ABT-874 for treating autoimmune diseases that targets the cytokine interleukin-12, which is in Phase II. Chambré said that project will not be affected by the legal fight over Humira. "Both collaborations were within discovery and at the end of that process the candidate was handed back to Abbott. There is no current scientific collaboration."

In November, CAT agreed to a five-year deal with AstraZeneca plc, of London, in which the two agreed to a joint investment of $175 million to fund 25 antibody discovery programs and AstraZeneca invested $139 million for 19.9 percent of CAT. Chambré said that agreement, coupled with the cash flow from Humira royalties, would give CAT much greater flexibility.

"It gives us the opportunity of building a major product pipeline," he said.

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