Nabi to receive $2.2 million in settlement from Inhibitex

Under the terms of the settlement, Inhibitex agreed to pay Nabi a total of $2.2 million, $1.7 million in connection with the execution of settlement and $0.5 million by October 15, 2008 with 5% interest from August 1, 2008.

In 2006, Nabi recorded $4.5 million of other biopharmaceutical revenue for contract manufacturing, consisting of $1.2 million for product manufactured under a manufacturing agreement with Inhibitex and $3.3 million for penalties recorded in conjunction with the termination of the agreement. Inhibitex disputed the amounts due. Nabi arbitrated this dispute and, in early 2007, received a favorable ruling from the arbitrator awarding the full $4.5 million.

Subsequently, Nabi moved to confirm the award in the Supreme Court of New York and Inhibitex moved to vacate the award. In late 2007, the court issued a decision denying Nabi’s petition with respect to $3.3 million in cancellation fees, but affirmed the arbitrator’s award in the amount of $1.2 million which was received in January 2008.

Nabi filed an appeal in February 2008 with respect to the portion of the decision vacating the $3.3 million portion of the award. This settlement effectively terminates the appeal process.

Raafat Fahim, president and CEO of Nabi Biopharmaceuticals, said: “We are pleased to reach this settlement which will result in the payment to Nabi of most of the disputed amount and the end of future costs associated with our appeal.”