CAMBRIDGE, England and ABBOTT PARK, Ill., Oct. 26 – LAWFUEL – The Law News Network – Cambridge Antibody Technology (Nasdaq: CATG; LSE:
CAT) and Abbott (NYSE: ABT) today announce that they have reached an agreement
regarding royalties payable to CAT under a licence agreement between the
parties. Accordingly, the hearing scheduled to start this week in the Court of
Appeal will not take place.
Paul Nicholson MD, Chairman, CAT, commented: “We are very pleased to have
reached resolution of this issue with Abbott. We can now concentrate fully on
CAT’s business going forward. CAT is already benefiting from Abbott’s
successful development and marketing of HUMIRA(R) and we are hopeful of future
success with ABT-874.”
Jeffrey M Leiden MD PhD, president, Abbott Pharmaceutical Products Group,
said: “We are pleased to find a solution that benefits both companies and
resolves our differences.”
Under the terms of the settlement agreement:
— Abbott will pay CAT the sum of US$255 million, which CAT will pay to
its licensors, the Medical Research Council (MRC), Scripps Institute
and Stratagene, in lieu of their entitlement to royalties arising on
sales of HUMIRA from 1 January 2005 onwards.
— Abbott will also pay to CAT five annual payments of US$9.375 million
commencing in January 2006, contingent on the continued sale of HUMIRA.
US$2 million from each of these payments will be payable to CAT’s
— Abbott will pay CAT a reduced royalty of 2.688% from approximately 5.1%
on sales of HUMIRA from 1 January 2005. CAT will retain all of these
royalties. CAT will also retain royalties received from Abbott in
respect of sales of HUMIRA up to 31 December 2004, net of approximately
7.6 million pounds sterling which will be paid to its licensors. CAT
will refund to Abbott approximately 9.2 million pounds for royalties
paid from 1 January 2005 through 30 June 2005.
— Abbott will also pay CAT a reduced royalty of 4.75% on any future sales
of ABT-874, from which CAT will pay a portion to the MRC and other
licensors (according to CAT’s 1997 agreement with the MRC).
— Abbott will capitalise and amortise the upfront payment, net of the
refund, and annual payments to CAT through the term of the agreement.
When this amortisation is combined with the revised royalty rate of
2.688%, the blended effective royalty rate is reduced from the
approximate 5.1% as previously instructed by the Court.
Application of the Safe Harbor of the Private Securities Litigation Reform
Act of 1995: This press release contains statements about Cambridge Antibody
Technology Group plc (“CAT”) that are forward looking statements. All
statements other than statements of historical facts included in this press
release may be forward looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934. These forward looking statements are
based on numerous assumptions regarding the company’s present and future
business strategies and the environment in which the company will operate in
the future. Certain factors that could cause the company’s actual results,
performance or achievements to differ materially from those in the forward
looking statements include: market conditions, CAT’s ability to enter into and
maintain collaborative arrangements, success of product candidates in clinical
trials, regulatory developments and competition. We caution investors not to
place undue reliance on the forward looking statements contained in this press
release. These statements speak only as of the date of this press release, and
we undertake no obligation to update or revise the statements.