Catco Reinsurance Opport... Share Discussion Threads

[bungles] 20/12/2004 10:42

Does anyone have any idea when we can expect to hear the outcome of the trial?

[bungles] 20/12/2004 10:40

Hi Matthu! Good to see you here. I put 10% into Vernalis at 58p, 10% into Alizyme at 121p, 10% into CAT at 482p and waited and waited for the big opportunity - 70% into Merck at an average price of $27.40!!

So far it's looking very healthy. I almost went into Merck at just over $30 but decided that I would only go in if it fell below $30. Fortunately my patience paid off. I didn't quite hit the bottom but not too bad.

I almost dived into Pfizer last Friday but decided against it as I'm too exposed to the US $ so I'm following AZ closely instead.

The one I missed was Phytopharm. I had been tracking them for a few months and nearly went in at around 150p. I bottled out because I didn't feel I understood their pipeline and business model well enough. Oh well, never mind!

What did you do with your funds?

[matthu] 20/12/2004 10:17

Hello, bungles! Where did you put your CCH funds?

[bungles] 20/12/2004 10:05

Fingers crossed everyone.
25 mins. to go!!

[matthu] 20/12/2004 09:51

I actually thought of attending the hearing ... had it been after Christmas, I might well have done!

[danny_boffin] 20/12/2004 09:46

Good luck.

[matthu] 20/12/2004 06:59

By Michael Jivkov

Also in the High Court today will be a ruling on the year-long dispute between Cambridge Antibody (CAT) and Abbott Laboratories over the rheumatoid arthritis treatment Humira. At stake are hundreds of millions of dollars of royalty payments, which CAT says it is entitled to under a licensing deal with Abbott for the drug.

Humira is expected to generate sales of more than $1bn (£515m) next year and CAT says it is entitled to 5.5 per cent under its agreement with Abbott. However, the US group is only prepared to pay CAT 2 per cent of the revenues.

For CAT the issue is of great importance. Analysts believe that success for the group in the High Court could send its shares skyward but equally, failure will see them plummet. To prevent excessive volatility in its shares in the run-up to the judgment, CAT has asked for its stock to be suspended today at 7.30am. A judgment is expected at 10.30am.

[matthu] 20/12/2004 06:57

CAT awaits High Court judgment
By David Firn
Published: December 20 2004 02:00 | Last updated: December 20 2004 02:00

Shares in Cambridge Antibody Technology will be suspended this morning until the High Court in London rules on a royalty dispute that could radically affect the fortunes of the biotechnology company.

Mr Justice Laddie is due to decide by 10.30am whether Abbott, the US healthcare group, should more than double the level of royalties it pays CAT on sales of Humira, a promising arthritis treatment, under a disputed licensing agreement.

Erica Whittaker, biotechnology analyst at Merrill Lynch, said lossmaking CAT could run out of money by the second half of 2007 if it lost the case. The shares, which closed up 1¼p at 632p Friday, could fall to £5 or less, but they could be worth £10, if CAT prevailed in the case, she said.

The CAT-Abbott case goes to the heart of the system under which biotechnology companies license drugs to big pharmaceutical companies.

The dispute revolves round what interpretation should be put on a royalty offset clause in a 1995 licensing agreement between CAT and Knoll, a German pharmaceuticals group that was subsequently acquired by Abbott. Merrill Lynch estimates Abbott's royalty stack on Humira could be 13 per cent of sales. Royalty stacking and offset clauses are common on biotechnology drug licences.

Ms Whittaker said a compromise ruling was unlikely. "The judge will decide the meaning of the disputed contract, that's all. He cannot rewrite the contract, he can only interpret its intent. So it is a binary decision. The outcome will be either a2 per cent royalty on Humira or a 5 per cent royalty, and nothing in between," she said.

Humira had sales of $280m (£144m) last year. The figure is expected to exceed $1bn next year and reach more than $2.5bn-a-year by 2009.

FT Comment

* Analysts are agreed that CAT's shares will eithersink or swim when they resume trading today. However, an appeal by the loser is also seen as inevitable, suggesting the shares will remain volatile whichever way they move today. Nevertheless, a win today for CAT would strengthen its hand in the hunt to license-in new products. Its drug development pipeline has been looking decidedly thin since Trabio failed in clinical trials last month. But a £75m drug-discovery deal with AstraZeneca means it has a strong enough balance sheet to go shopping for a replacement.

[danny_boffin] 17/12/2004 15:29

Excellent.
Monday it is then!

[matthu] 17/12/2004 14:28

Cambridge, UK Cambridge Antibody Technology (LSE: CAT; NASDAQ: CATG) announces
that, following the completion on Friday 10 December 2004 of the hearing in the
High Court in London of its legal action in relation to HUMIRA royalties with
Abbott, it has received notification from the judge that he will give his
judgement in open court at 10.30 GMT on Monday 20 December 2004.

In order to ensure protection of investors under paragraph 1.15 of the Listing
Rules, it has been agreed with the UK Listing Authority that CATs ordinary
shares will be suspended from trading on the London Stock Exchanges market for listed securities from 07.30 GMT on Monday 20 December until after the Company has issued a news release in relation to the judgement. This news release will be issued as soon as possible after the judgement is handed down.

[matthu] 15/12/2004 17:44

635.5 p - up another 1% today.
My belief that CAT's argument will ultimately prevail also remains steadfast.

I am encouraged by the Judge who appears to suggest that it won't take him as long to formulate his judgement as had originally been allowed for. To my mind, that means he sides with CAT that the issue is not about anything more complex than interpreting a contract.

Part of CAT's argument is that both parties to the original negotiation had communicated freely and amicably, and that if Knoll had really thought, intended or understood that the cost of any manufacturing or other downstream patent was to be shared with CAT, Knoll would have raised this possibility with CAT. Such a possibility had never been discussed.

To my mind, by the manner of his questioning of Abbott's witnesses during the hearing, the Judge demonstrated that he was persuaded by this argument.

[dancer03] 15/12/2004 17:10

CAMBRIDGE ANTIBODY 619.5 18.5 3.0

Lehman Brothers reiterates at overweight, with 778p price target. Points out that Humira judgment may be issued by end of week, saying it continues to believe that CAT has stronger argument. (EXB)



Lets hope they're right.

[matthu] 14/12/2004 16:38

Nice close today at 628 p - although the volume was insignificant.

[dancer03] 13/12/2004 19:05

D day fast approaching then, it doesn't appear that there will be any compromise then, a straight 2% or 5-6% then.

An awful ammount at stake for CAT esp as Abbott is developing Humira for other diseases such as Crohns. A win would see the share price CATapulted upwards very sharply.

Good luck everyone.

[matthu] 13/12/2004 17:06

Good spot.

CAT argues it is entitled to payment of between 5% and 6% on a sliding scale, depending on sales. So safe to assume it will hit 6% at some stage.

[danny_boffin] 13/12/2004 14:28

That was of course a metaphorical fat judge lady ;)

[matthu] 13/12/2004 14:13

I hope she's not reading this thread - you could be up on contempt!

[danny_boffin] 13/12/2004 14:13

It's definitely not 607.5... I just did a dummy buy and I was offered 619.5p

[danny_boffin] 13/12/2004 14:08

My theory: I'd imagine that the price has been slightly depressed of late purely from uncertainty over the trial. Quite possibly some of that uncertainty has been alleviated now that it's clear that there have been no unpleasant surprises and that it's all now in the judge's hands.

Of course most of the uncertainty will still be there until the fat judge lady sings!

[matthu] 13/12/2004 14:06

Interesting also that

(1) the volume is exceptionally low today (only 37000 shares traded)
(2) the monitor shows CAT's price being about 607.5, whereas shares have most recently been trading at almost 620p

Can't quite explain that.

[matthu] 13/12/2004 13:50

Which is strange - because I haven't been able to find any news on the court case ... yet! Maybe this is as a result of people having read the closing submission of CAT's legal team.

[danny_boffin] 13/12/2004 13:44

Well the price is certainly doing something good today.

[matthu] 10/12/2004 16:44

I think they had anticipated the judge to delay until early January. But, on the other hand if the case is as uncomplicated as CAT maintains, then it may be earlier?

I have not had it confirmed that Abbott has finished with it's submission, but have no reason to expect otherwise.