Catco Reinsurance Opport... Share Discussion Threads

[danny_boffin] 22/11/2004 16:53

Are court cases like this open to the public?
In which case, should we be seeing the share price reflecting the way the trial is going on a daily basis?

[matthu] 22/11/2004 16:42

The fact that they have gone to court at all indicates that there is no clear cut outcome, IMHO.

Lehman Bros believes CAT has a 950p price target if the company's royalty rate returns to 5 per cent.

[dancer03] 22/11/2004 16:38

Interesting to see that AstraZeneca are willing to invest in the company before the outcome of the court case. Perhaps they have cast an eye over Humira contracts and are confident CAT have it in the bag.

Anyone know what a win would do to share price.....10%...20%...50% ?

[matthu] 22/11/2004 10:54

from
(see also RNS today)

AstraZeneca pays £75m for stake in CAT

Shares in Cambridge Antibody Technology were up 10.9 per cent at 625p in early trade on Monday after it said that AstraZeneca (LSE: AZN.L - news - msgs) , the Anglo-Swedish pharmaceutical company, would be taking a 20 per cent stake in the UK biotechnology group, worth £75m.

The alliance will see the companies undertake a five-year research programme during which the partners wil jointly start at least 25 new drug discovery programmes.

AstraZeneca will pay £75m, subscribing in cash for 10,217,983m CAT shares at a price of £7.34 per share.

This values the company at £377m.

The move appears to answer analyst's criticisms that CAT is great at technology but has little aptitutde for bringing drugs to market.

It will also give AstraZeneca a long-awaited break into licensing.

The joint research investment will be at least $175m during the five-year discovery phase which each party will fund 50:50.

CAT will contibute more resources during this phase and expects to commit between 100 and 150 scientists a year to the programme at its peak.

"Most, if not all of which will come from existing resources," it said.

Shares in AstraZeneca were down 0.5 per cent at 2133p.

[matthu] 21/11/2004 07:33

from Independent on Sunday
Investors in Cambridge Antibody Technology are in for a tense time. A key court case with Abbot Laboratories over royalty payments starts tomorrow, the same day as CAT's final results. The case could continue for some weeks, but the share price is likely to react sharply depending on the result. Operationally, investors will be keen to hear about new products after news that Trabio, a proposed glaucoma treatment, had underperformed in trials.

[matthu] 18/11/2004 16:34

LONDON, November 18 (newratings.com) - Analysts at Canaccord Capital maintain their "buy" rating on Cambridge Antibody Technology (CAT.ISE). The 12-month target price is set to 651p.

[grupo guitarlumber] 17/11/2004 13:33

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[grupo guitarlumber] 17/11/2004 13:27

17 Nov 2004

Diggerland proposes fourth UK site

The Diggerland adventure park company has announced proposals to develop a fourth UK park on the site of a former colliery in the Castleford area of West Yorkshire.

The adventure park would be located on the old Whitwood Colliery site. The local community will be consulted in the design and park planning stage in order to integrate the group with the Castleford community while meetings at venues will be announced soon.

Diggerland adventure parks give children as young as five years-old the chance to ride and drive real JCBs. The pilot Diggerland site opened in Kent in 2000 while there are currently two further parks in operation in Durham and Devon. Details:

[matthu] 17/11/2004 06:25

Broker's bold forecast on CAT
By Business Weekly, 16 November 2004

Broker Lehman Brothers has nailed its colours to Cambridge Antibody Technology's mast, predicting the company could almost double its share price despite a temporary setback.

CAT has shelved its lead proprietary product, Trabio, following its failure in its first pivotal European Phase II/III clinical trial.

CAT's shares fell 13.47 per cent, or 92.25p, to 592.75p within hours but then rallied.

The trial was designed to gauge whether the drug lowered pressure in the eye of 344 glaucoma patients a year after surgery: It did not to a statistically significant degree.

It is the first time in the company's 14 years of operations that it has suffered such a setback.

November is a watershed month for CAT. Its High Court case against US giant Abbott over royalties on Humira, a jointly developed rheumatoid arthritis treatment, is heard within the next few weeks.

A negative outcome could have dire consequences for the company and its share price. But a victory will send the shares soaring.

CAT stock had been strong before the Trabio setback on hopes that either a settlement with Abbott could be reached or CAT would win the day.

Lehman Bros believes CAT has a 950p price target if the company's royalty rate returns to 5 per cent.

CAT's chief executive, Peter Chambre told Business Weekly: "The Trabio trial results represented disappointing news but we have a broad and expanding portfolio with nine drugs in clinical trials.

"The most recent to enter trials was CAT354 for the treatment of severe asthma."

Data from a second pivotal Trabio trial will be available in early 2005, but Chambre said he expected the same result.

As a result, he revealed that spending on Trabio would be "minimised" in the short term and cut altogether after the second pivotal trial.

He added: "Resources will be now be redirected across our portfolio and we remain confident of our ability to achieve our long-term objectives.

[graemereid] 16/11/2004 19:02

Or is it just to make me feel doubly nervous? The trial was expected to last 2-3 weeks, I think. I guess an out-of-court settlement is still possible.

[matthu] 16/11/2004 13:02

Is it purely a coincidence that CAT's Preliminary Results announcement on 22 November 2004 is the first day of the scheduled court hearing over Humira?

[mzj71852] 11/11/2004 13:55

The first of two crucial factors overhanging the company went the wrong way for Cambridge Antibody yesterday, says the Times.

Trabio, a treatment to prevent the build-up of scar tissue in patients who have undergone eye surgery, failed crucial tests.

Meanwhile, the second issue, a bitter licensing dispute with Abbott Laboratories over royalty payments on Humira, a treatment for arthritis sufferers, is still ongoing. A win could see the shares jump to 900p on revised earnings forecasts; a loss could see the stock fall to 400p. Take profits.

[calleva] 10/11/2004 11:27

New warnings for Humira
Abbott Laboratories has added new warnings to the label of its anti-TNF inhibitor, Humira (adalimumab), to caution against its use in combination with Amgen's interleukin-1 antagonist, Kineret (anakinra), and warn of the possibility of hypersensitivity reactions and haematological events. The new additions to the Warnings section, which bring Humira into line with its competitor products, are explained to physicians in a Dear Healthcare Professional letter.

Regarding the use of Kineret plus Humira, the label says that "another TNF-blocking agent" has shown no additional benefit in combination with Kineret and that using Humira plus Kineret is not recommended because of the possibility of increased toxicities. This probably refers to a trial combining Kineret with Amgen/Wyeth's anti-TNF agent, Enbrel (etanercept), in which patients on the combination had an increased risk of serious infections but did not have higher ACR response rates.

. . . hypersensitivity

Abbott says anaphylactic reactions following Humira administration have been seen rarely in post-marketing experience. Patients developing such reactions should discontinue Humira and receive appropriate therapy for the reaction, the warning states. In clinical trials, allergic reactions including allergic rash, anaphylactoid reactions, fixed drug reactions, non-specified drug reaction and urticaria occurred in approximately 1% of patients.

The new information on haematological events says that rare reports of pancytopenia, including aplastic anaemia, have been seen with TNF-blocking agents. With Humira adverse haematological events including medically significant cytopenia have been infrequently reported and the causal relationship to Humira is unclear, the label says.

Furthermore, patients with signs and symptoms suggestive of blood dyscrasias or infection should seek medical advice and should discontinue Humira treatment when significant haematological abnormalities are confirmed, it says.

Full title: SCRIP - World Pharmaceutical News - www.scrippharma.com

[calleva] 10/11/2004 11:08

The above all seems pot-half-empty. Trabio has simply failed to show a signicant benefit vs placebo in trials which are still underway. All the same, well on its way to 500 now.

[matthu] 10/11/2004 10:48

from TimesOnline
CAT shares fall as eye drug fails
By Richard Irving

CAMBRIDGE Antibody Technology (CAT) has effectively pulled the plug on a new treatment for glaucoma, after the drug failed its first crucial test.
Peter Chambre, chief executive, said that it was "very unlikely" that CAT would proceed with development of Trabio after tests on 334 patients showed that the treatment did not help to reduce a build-up of scar tissue after eye surgery.

The results of a second trial are due in the first quarter of next year, although Mr Chambre admitted that there was little chance that the results would be markedly different.

He said that the results were not strong enough to support a regulatory filing, adding that the top priority was now to reduce CAT's financial exposure to the treatment.

Shares in CAT, which specialises in developing drugs from human antibodies, fell 14 per cent to 595p on the news. Analysts had suggested that Trabio could generate sales of up to $100 million (£54 million) a year by 2010. Mr Chambre said that he would update shareholders on the financial impact of Trabio's failure on November 22, when the company is due to file results.

CAT is also suing Abbott Laboratories for additional royalties on its successful Humira treatment for arthritis.

The medicine was discovered using CAT's technology but developed by Abbott. The dispute surrounds the two sides' interpretations of a 1995 licence agreement between CAT and Knoll, a company later bought by Abbott. CAT is seeking royalties equivalent to 5 per cent of sales, while Abbott is holding payments at 2 per cent, citing a controversial offset clause in the original agreement.

Humira is expected to generate peak sales of more than $2 billion a year.

The outcome of the case is central to CAT's financial fortunes. Analysts have suggested that the company's shares could jump to 900p if it wins the High Court action, but fall to about 400p if judges rule against its interpretation of the contract.

Lehman Brothers said yesterday that it would keep an "overweight" stance on CAT's shares on hopes that the outcome of the royalty case would fall in the drugmaker's favour. However, the bank reduced its price target from 820p to 787p, reflecting lower earnings forecasts.

[calleva] 10/11/2004 10:37

It may be that Trabio has greater long term benefit and we shall find out in 2005. In the meantime there is unlikely to be a significant rebound IMO.

[the_doctor] 09/11/2004 20:04

agreed Matthu

Out of interest, I based my sales figures on evo's $20m in year 5 estimate with 2007 launch. I ramped the first years up to this £20m, kept it at that for a few years and then down to $15m for the last two years. This is to try to give it the most real-life fit, given the only numbers I had.
I used the above for 10-years sales and discounted each at 10% to give the NPV.
Maybe the sales are expected to continue growing after year 5? The evo report does though state the decline in number of ops that Trabio would be used in.
Maybe sales are expected to continue for more than 10years?

How many years' sales is it standard to use for NPV calculations?

My intention was to be conservative to try to give some minimum fair value figures. That also allows for a bit of overrun due to poor sentiment.

Alternative uses for Trabio have been excluded as too early in the pipeline.

[matthu] 09/11/2004 18:11

MikeAtWork - agree with you entirely.

Avis-Europe (AVE) has news items belonging to Aventis listed, so it's not an isolated case. I too wish they could do better.

[matthu] 09/11/2004 18:09

No big argument with your numbers, doctor (assuming your Trabio sales figures are reasonable), except to note that you are adopting a very cautious position on Humira (plus the four other products affected by the same royalty clause).

I have yet to see any comment on the internet that supports Abbott's stance on this, whereas I have seen several viewpoints supporting CAT, so I personally attach more than 50% to the probability of a favourable outcome. Also, I like to hope that a favourable outcome will result in more than 3%.

All IMHO.

[mikeatwork22] 09/11/2004 17:35

why ? Why? WHY ? is there recent news for CATERPILLAR listed ?

surely ADFN should be able to differentiate between LSE:CAT and CAT from the US ? ??????????

[the_doctor] 09/11/2004 16:31

I read it as you did Matthu.

Using EVBG estimates of $20m year 5 sales, I get a NPV from Trabio in this indication to be $76m.
Given its in phase 3, apply 70% probability and spread over 38m shares this gives a value of $1.40 per share. This is roughly 76p per share.
Not all of this value was priced into the shares and an estimate of 76p should be attributed to Trabio.

610 would therefore be a fair price (if it was trading at a fair price beforehand).
Alternatively, value the shares without Trabio...
Humira at 1.2% = £1.80 add cash, £2.80 > £4.60. Previous estimate of the rest of the business = £1.17. Take out complete Trabio failure leaves 47p.
Giving... 507p for 1.2% humira royalties

Any comments on the above would be welcomed

The same case for 3% humira royalties gives £7.87
Humira could get up to 5% so 3% is a reasonable compromise. But factor in a 50% chance of winning the 3% royalties and 620p seems a very fair price.

My personal view is that the shock reaction will lead to CAT being way oversold. This'll mean a great buying opportunity to maximise the upside from Humira trial success or minimise the loss from only 1.2% royalties.

[matthu] 09/11/2004 15:45

"The preliminary analysis by itself does not support the filing of a Biologics
Licence Application (BLA) in 2005. Data from a second pivotal ('International'
Phase III) clinical trial of Trabio are expected in early 2005."

This suggests (to me) that there is nothing untoward (otherwise they would be stopping the second trial) but they have not demonstrated a significant benefit (from a statistical viewpoint).

I read something into the two words "by itself" and take this to mean that there may yet be a different interpretation placed on the numbers when the two trials are combined. It is harder to prove significance the smaller your sample.

What do others read into this?