The long-awaited hearing concerning royalties owed to UK biotechnology company Cambridge Antibody Technology for its licensed-out arthritis drug, Humira (adalimumab), will now not take place after CAT came to a settlement with its partner Abbott Laboratories.
The hearing in the Court of Appeal was scheduled to take place next week after a UK ruling last year that CAT should receive a hike in its percentage return on sales of Humira from 2% to 5% [[20/12/04c]].
The dispute stretches right back to March 2003 [[26/03/03a]], [[15/10/03a]] and relates to royalty provisions from a 1995 agreement with Knoll AG – which was acquired by Abbott. Under the terms of this deal, royalties could be shared with third parties should Abbott deem them applicable, but CAT said that these provisions did not apply. And so began
a protracted battle for CAT’s slice of the very lucrative pie that is Humira, with sales of the compound skyrocketing 57% during the third quarter alone to $356 million dollars [[20/10/05e]].
However, at the last minute, the firms have signed an out-of-court settlement that appears to satisfy both parties concerned. Jeffrey Leiden, President, Abbott Pharmaceutical Products Group, said: “We are pleased to find a solution that benefits both companies and resolves our
differences.”
Abbott will now pay CAT $255 million dollars, which in turn will be distributed to the UK firm’s licensors – the Medical Research Council, Scripps Institute and Stratagene – which are also entitled to royalties. In addition, five annual payments of $9.4 million will be paid to CAT,
beginning in January, of which $2 million must be issued to the licensors.
However, CAT has agreed to take cut in its royalties from the 5.1% decreed by the court last year to just under 2.7% from January this year: it will retain all of these funds itself, but will refund Abbott some £9.2 million. In addition, the royalties it received up to the end of December 2004 – amounting to some £7.6 million – will be paid to the licensors.
And the new deal does not just apply to Humira, but also CAT’s follow-up compound, ABT-874. Abbott will now pay CAT a reduced royalty of 4.75% on any future sales of the drug, from which CAT will pay a portion to the MRC and other licensors.
The news pleased investors in CAT this morning, with its share price seeing a welcome 5% boost on the London Stock Exchange.
