Catco Reinsurance Opport... Share Discussion Threads

[matthu] 20/12/2004 12:49

Update from

... Justice Laddie said Abbott should have paid Cambridge Antibody a royalty rate of "just over 5 percent" of net sales, instead of the 2 percent it received.

"It's very good for (Cambridge Antibody) because it will enhance its cash flow and it will be less dependent on the market to raise cash," said Reijer Lenstra, managing director of Biopharma Fund, which manages about $150 million in biotechnology investments. "It really changes the perspective for the company in a big way."

Cambridge Antibody's case was "overwhelming," Justice Laddie wrote in his ruling. Laddie said the more he considered arguments submitted by Lord Grabiner QC, Abbott's lawyer, "the more difficult his client's position appears to be."

Cambridge Antibody shares were suspended in London today. The company has a market value of 258.1 million pounds ($502 million), based on Friday's closing price.

[matthu] 20/12/2004 12:39

365,000 shares traded, currently trading 792-800.
Click on Trades and then download the trading history to your PC.

[danny_boffin] 20/12/2004 12:37

Oop forget that I am now!

[danny_boffin] 20/12/2004 12:36

I'm seeing the offer prices but I'm not seeing any trades showing...

[matthu] 20/12/2004 12:34

800p to buy on Barclays

[jonno1] 20/12/2004 12:31

looks like its still suspended then

[danny_boffin] 20/12/2004 12:29

Strange though, I can't trade yet online - anyone know if any trades are going through yet at all?

[matthu] 20/12/2004 12:28

bid 800, offer 750 (!) on ADVFN delayed ...

[danny_boffin] 20/12/2004 12:27

I'm showing 8p at the moment.

[jonno1] 20/12/2004 12:20

sorry comdirect are not, what is the price now please?

[danny_boffin] 20/12/2004 12:17

Think they just have!

[jonno1] 20/12/2004 12:15

when do the shares start re trading?

[matthu] 20/12/2004 12:00

Yes, Abbott will have to pay royalties back to the start date.

This judgement will also affect other products covered by the same agreement that will potentially come to the market.

Useful background article here:

[matthu] 20/12/2004 11:54

Company Announcement

RNS Number:6142G
Cambridge Antibody Tech Group PLC
20 December 2004


FOR IMMEDIATE RELEASE
20 December 2004

For further information contact: Weber Shandwick Square Mile
(Europe)
Cambridge Antibody Technology Tel: [phone]
Tel: [phone] Sarah MacLeod
Peter Chambre, Chief Executive Officer
John Aston, Chief Financial Officer
Rowena Gardner, Director of Corporate
Communications
BMC Communications/The Trout Group
(USA)
Tel: [phone]
Brad Miles, ext 17 (media)
Brandon Lewis, ext 15 (investors)

CAMBRIDGE ANTIBODY TECHNOLOGY PREVAILS IN PROCEEDINGS IN HIGH COURT RE: HUMIRA

Cambridge, UK... Cambridge Antibody Technology (LSE: CAT; NASDAQ: CATG) reports
that in the trial against Abbott in the High Court in London, the trial judge,
Mr Justice Laddie announced this morning that he finds in favour of CAT. A full
written judgement has been released. Set out below in full is the shorter
statement provided by the judge in court.

"This morning I am handing down my judgment in this action. Because of its
commercial sensitivity, and with the agreement of counsel, I have not adopted
the normal procedure of making a draft available in advance.

The judgment, which will be available for collection in a moment, is of some
length. It is appropriate that I indicate the conclusion I have come to. What I
say now is not to be taken as altering, expanding or in any way qualifying what
is set out in the full judgment.

The parties, Cambridge Antibody Technology (CAT) on one side and Abbott on the
other, are parties to an agreement, originally entered into in 1993 and then
replaced by another to substantially the same effect in 1995. Under it CAT has
licensed Abbott to make use of its ground breaking technology, referred to as
library and phage display technology, for the purpose of enabling Abbott to
develop, make and sell a genetically engineered human antibody to be used in the
treatment of rheumatoid arthritis. The program to develop and make this antibody
is lengthy and involves some of the most modern techniques of genetic
engineering. CAT's technology is used at an early stage in the program.

The program has been successful. Abbott has put upon the market a product
containing the antibody. It is called HUMIRA. In a short time, its sales have
been substantial.

Under the agreements, Abbott is contractually bound to pay royalties to CAT at a
rate of just over 5% of the Net Sales of HUMIRA. That royalty obligation is
subject to an offset or royalty sharing provision. It allows Abbott to deduct
from the royalties due to CAT half of the royalties paid by it for licences from
third parties for certain categories of technology. There is a minimum royalty
provision of 2%.

The parties dispute the extent of this offset or royalty sharing provision. CAT
argues that, on its proper construction, the relevant provisions of the 1993 and
1995 Agreements mean that Abbott can only demand that CAT shares royalties in
respect of the third party rights covering CAT's library and phage display
technology. Abbott argues that it is entitled to require CAT to share 50/50 in
the royalty burden it has in respect of all technology it uses throughout the
development and production process up to and including the production of the
human antibody from host cells.

There are no relevant third party rights in respect of the library and phage
display part of the development and manufacturing program. For that reason CAT
says that it is entitled to the full royalty provided for under the agreement.
On the other hand there are a number of such rights in respect of the later
parts of the program down to the point at which the antibody is produced. Abbott
has paid or undertaken to pay royalties under the latter. Abbott says it can
take off half of the royalties it has so incurred. This has taken CAT's
entitlement down to the minimum guaranteed under the agreement, namely 2%.

In late 2003 Abbott began paying royalties to CAT under the 1995 Agreement. It
did so at the 2% level. CAT argues that it should have paid and should continue
to pay the full royalty due under the agreement without deduction. Hence this
action.

Besides arguing that its construction of both agreements is correct, CAT also
argues that, if it is wrong on that, the agreements do not reflect the true
intention of the parties. It says that such common intention was to limit CAT's
obligation to share royalties so that it only applied to royalties in respect of
third party rights covering the library and phage display technology which it
licensed to Abbott. It therefore asks for the court to order rectification so
that the words of the agreement accord with that common intention. Alternatively
it asks for the agreements to be rectified on the ground of unilateral mistake,
on the basis that Abbott has behaved unconscionably in advancing the argument it
does in this action.

For the reasons set out in my judgment, I have come to the conclusion that the
construction advanced by CAT is correct and that the construction advanced by
Abbott does violence to the language of the agreements, renders them obscure and
makes little or no commercial sense. For this reason CAT wins this action.

I have also considered the common mistake and rectification arguments. In
relation to them I was taken through a large number of the parties' documents
spread over some years and the evidence of a number of witnesses. For the
reasons set out in my judgment I have come to the conclusion that it is
overwhelmingly likely that CAT's case as to what was the mutual and real
intention and agreement of the parties is correct.

It follows that, had I not found in its favour in relation to the issue of
construction, I would have ordered rectification of the agreements to ensure
that they accorded with the true intention of the parties, namely that CAT's
royalty sharing obligations should extend only to third party rights which
covered its library and phage display technology and no further.

It follows that Abbott was in error when it made its first royalty payment to
CAT calculated on the basis that only 2% of the Net Sales was due. It should
have calculated on the basis of the full royalty of just over 5% and should have
paid and continued to pay CAT accordingly."

Abbott made an application this morning for permission to appeal, which will not
be heard before late January.

-ENDS-

Notes to Editors
Cambridge Antibody Technology (CAT):

* CAT is a biopharmaceutical company using its proprietary technologies
and capabilities in human monoclonal antibodies for drug discovery and drug
development. Based near Cambridge, England, CAT currently employs around 280
people
* CAT is a leader in the discovery and development of human therapeutic
antibodies and has an advanced proprietary technology for rapidly isolating
human monoclonal antibodies using phage display and ribosome display
systems. CAT has extensive phage antibody libraries, currently incorporating
more than 100 billion distinct antibodies. These libraries form the basis
for the Company's strategy to develop a portfolio of antibody-based drugs.
* Four CAT human therapeutic antibody products are now at various stages
of clinical development, with one further product candidate in pre-clinical
development.
* HUMIRA, the leading CAT-derived antibody, isolated and optimised in
collaboration with Abbott, has been approved for marketing as a treatment
for rheumatoid arthritis in 51 countries. Six further licensed CAT-derived
human therapeutic antibodies are in clinical development by licensees, with
four further licensed product candidates in pre-clinical development.
* CAT has alliances with a number of pharmaceutical and biotechnology
companies to discover, develop and commercialise human monoclonal
antibody-based products.
* On 22 November 2004, CAT announced a strategic alliance with AstraZeneca
to discover and develop human antibody therapeutics in inflammatory
disorders.
* CAT has a broad collaboration with Genzyme for the development and
commercialisation of antibodies directed against TGF, a family of proteins
associated with fibrosis and scarring. This collaboration has so far given
rise to one antibody product candidate at clinical development stage, and
one at pre-clinical development stage.
* CAT has also licensed its proprietary technologies to several companies.
CAT's licensees include: Abbott, Amgen, Chugai, Genzyme, Human Genome
Sciences, Merck & Co, Pfizer and Wyeth Research.
* CAT is listed on the London Stock Exchange and on NASDAQ. CAT raised
#41m in its IPO in March 1997 and #93m in a secondary offering in March
2000.

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.

[bungles] 20/12/2004 11:53

Does Abbott have to back date the royalty payments?

[matthu] 20/12/2004 11:41

from
Biotech Pioneer Wins Royalties Battle
By Mike Taylor, PA

Pioneering biotech company Cambridge Antibody Technology (CAT) today won its multi-million pound High Court battle to more than double the royalties it is paid on the massive sales of the arthritis drug Humira.

A judge in London ruled that US-based pharmaceuticals giant Abbott Laboratories, which was licensed to use CAT's ground-breaking technology in developing the drug, should be paying royalties at the rate of just over 5% of net sales instead of the 2% it has been paying for the past year.

Mr Justice Laddie said Abbott's interpretation of its licensing agreements with CAT "does violence to the language of the agreements, renders them obscure and makes little or no commercial sense."

[matthu] 20/12/2004 11:40

Onle after a company announcement from CAT, which is presumably being prepared as we chat.

I expect Abbott will want to appeal, though it would be nice to hear a little contrition from their side. Remember how the initial decision to cut CAT's royalty blew their chances of taking over Oxford Glycosciences ...

Abbott must have their hands full at the moment simply trying to restore their reputation as a good partner to be doing deals with, so it will be interesting to see whether they appeal and how they couch their response to the verdict today.

[bungles] 20/12/2004 11:34

Does anyone know when the suspension of CAT share trading is likely to cease?

[matthu] 20/12/2004 11:19

Cambridge Antibody Wins Lawsuit Against Abbott Labs (Update1)
Dec. 20 (Bloomberg) -- Cambridge Antibody Technology Group Plc won a court ruling awarding it higher royalties from U.S. partner Abbott Laboratories for helping develop one of the biggest drugs from the U.K.'s biotechnology industry.

Cambridge Antibody claimed Abbott unfairly cut its royalties to pay other companies holding patents for techniques used to make Humira, a rheumatoid arthritis treatment. Abbott said it was entitled to slash the payments in order to pay royalties to Genentech Inc., which also helped develop Humira, and rejected allegations it has behaved dishonestly.

"The construction advanced by CAT is correct," Justice Hugh Laddie told the High Court in London today. "The construction advanced by Abbott does violence to the language of the agreement, renders them obscure and makes little or no commercial sense."

The case pitted century-old Abbott, which has a market value of $73.2 billion, against an unprofitable company founded in 1989 with the help of scientists from Cambridge University and the British Medical Research Council.

Cambridge Antibody shares were suspended in London today. The company has a market value of 258.1 million pounds ($502 million), based on Friday's closing price.

Fastest-Growing

Sales of Humira, the drugmaker's fastest-growing medicine, are expected to hit $1.2 billion next year, Abbott says. The Abbott Park, Illinois-based company said Dec. 17 that it had asked the U.S. Food and Drug Administration to approve Humira's use to treat psoriatic arthritis.

Abbott gained Humira in 2001 when it bought BASF AG's Knoll drug business, which had an agreement with Cambridge Antibody for the therapy at the time.

Cambridge Antibody's suit against Abbott opened 13 days after the Cambridge, England-based company said that Trabio, its most advanced drug in development, failed in trials. AstraZeneca Plc, Europe's third-largest drugmaker, on Nov. 22 bought a 19.9 percent stake in Cambridge Antibody to form a research alliance.

Abbott was founded in 1888 by Wallace C. Abbott, in his apartment based above his pharmacy.

The case is HC03CO3963, Cambridge Antibody Technology Ltd. v Abbott Biotechnology Ltd. Lord Grabiner QC, Simon Thorley QC and Freshfields Bruckhaus Deringer, which replaced Slaughter & May, are acting for Abbott, while Geoffrey Vos QC, David Kitchin QC and Herbert Smith are representing Cambridge Antibody.

[dancer03] 20/12/2004 11:08

Justice is served......Happy Christmas everyone.

[matthu] 20/12/2004 11:05

Way to go CAT!

[danny_boffin] 20/12/2004 11:00

Good stuff!
So how high is it gonna go today when they resume?

[bungles] 20/12/2004 10:52

Yippeeee!!!

Congratulations to the CAT management team and lawyers for having the bottle to stand up and fight big pharma. The biotech industry has been shafted by big pharma too many times over recent years.

Well done guys.

[matthu] 20/12/2004 10:51

At the moment I'm only buying the UK market - probably a mistake I know. I recently topped up with more CAT and also with Skyepharma.

Been looking at Bioprogress which is today again being subject to shorting, and also at MICAP which has an interesting mix of pharma and non-pharma applications, and a sizeable investment from SKP.