BioWorld International Correspondent

LONDON - Cambridge Antibody Technology Group plc is yet to reach agreement on the royalty rate Abbott Laboratories will have to pay on the rheumatoid arthritis (RA) treatment Humira, just a month before the first payment is due, and said it is not expecting to resolve the issue in the near future.

John Aston, CAT's chief financial officer, told BioWorld International, "We are having discussions, but the pace is slow, so we won't see a resolution in the short term."

CAT's shares fell 25 pence to £5.45 when the company made the announcement last week.

The dispute arose because Abbott said in March that it wants to invoke a clause in the agreement with CAT allowing it to offset royalties due to third parties against royalties due to CAT. CAT is arguing that the offset provisions do not apply.

Whatever the outcome, CAT is entitled to a royalty rate of only low single figures for Humira, its first antibody to reach the market. However, sales of the antibody have taken off since its U.S. launch at the beginning of the year, and Abbott is forecasting 2003 sales of $250 million.

The product also is on the verge of becoming the first monoclonal antibody to be approved for treating RA in the European Union, and is in Phase III trials in psoriatic arthritis, juvenile RA and Crohn's disease, and Phase II in chronic plaque psoriasis, pointing to significantly higher sales in years to come.

Cambridge-based CAT also announced a cross-licensing deal with Enzon Pharmaceuticals Inc., of Bridgewater, N.J., that will see the two withdraw from legal action on their respective European patents in the area of diabodies.

Under the deal, Enzon and its German collaborator, Micromet AG, of Munich, will get access to CAT's phage display technology for antibody discovery. In return, CAT gets rights to Enzon and Micromet's joint patents in the field of single-chain antibodies.

The move means CAT now has resolved its principal intellectual property disputes. By eschewing litigation in favor of licensing agreements, the company has gained a stake in future human antibody products discovered using its phage display technology.

In another deal announced last week, CAT gave Xerion Pharmaceutical AG, of Martinsried, Germany, options to license and develop antibodies derived from its phage display libraries, against targets discovered by Xerion. That extends a license agreement made in June 2001.