Cambridge Antibody Technology and Abbott settle royalties dispute

Cambridge Antibody Technology (CAT) and Abbott have settled their dispute over royalties payable to CAT under a licence agreement.

The complex settlement means Abbott will pay CAT large sums in royalties for sales of Humira, but royalties from 1 January 2005 and on future sales of ABT-874 have been reduced.

Paul Nicholson, chairman of CAT, said: '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 and we are hopeful of future success with ABT-874.'

Jeffrey Leiden, president of Abbott Pharmaceutical Products Group, said he was pleased with the outcome, which is of benefit to both companies.

Humira, is a CAT-derived antibody, isolated and optimised in collaboration with Abbott, and approved for marketing as a treatment for rheumatoid arthritis in 51 countries.

CAT's entitlement to royalties in relation to sales of the antibody was governed by an agreement set up in April 1995 between CAT and Knoll Ag. The agreement allows for offset, in certain circumstances, of royalties due to third parties against royalties due to CAT, subject to a minimum royalty level.

In March 2003, Abbott indicated to CAT its wish to apply the royalty offset provisions. Following unsuccessful efforts to resolve the matter with Abbott, CAT initiated legal proceedings. The resulting trial at the High Court in London, in November 2004, ruled in CAT's favour.