Cambridge Antibody Technology and Abbott reach royalties settlement

By Angela McDaniels

Seattle, Oct. 26 - Cambridge Antibody Technology and Abbott Laboratories said they have resolved their dispute over royalties payable to Cambridge Antibody under a license agreement.

As a result, the appeals hearing scheduled to start this week will now not take place.

Under the terms of the settlement, Abbott will pay Cambridge Antibody:

* A lump sum of $255 million, which Cambridge Antibody will then pay to its licensors in lieu of their entitlement to royalties arising on sales of Humira from Jan. 1, 2005 onwards;

* Five annual payments of $9.375 million starting January 2006, $2 million of which will be payable to Cambridge Antibody's patent licensors: Stratagene Corp, the Medical Research Council and the Scripps Research Institute;

* A royalty reduced to 2.688% from 5.1% on sales of Humira from Jan. 1, 2005. Cambridge Antibody will retain these royalties; and

* A reduced royalty of 4.75% on any future sales of ABT-874, from which Cambridge Antibody will pay a portion to its licensors.

After paying the refund and annual payment, Abbott will capitalize and amortize the remainder of the upfront payment.

Stratagene says it expects to receive a net $23.6 million from the settlement in the fourth quarter of 2005 and $0.8 million during the years 2006 to 2010 if commercial sales of Humira continue.

Cambridge Antibody is biopharmaceutical company based in Cambridge, England, that develops human monoclonal antibody therapeutics.

Abbott is based in Abbott Park, Ill., and develops pharmaceuticals, nutritionals and diagnostic products.

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