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news.Cambridge Antibody Technology and Abbott have reached an agreement regarding royalties payable to CAT under a license agreement for arthritis drug Humira.
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Under the terms of the settlement agreement, Abbott will pay CAT $255 million, which CAT will pay to its licensors, the Medical Research Council (MRC), Scripps Institute and Stratagene, in lieu of their entitlement to royalties arising on sales of Humira from January 1, 2005 onwards.
Abbott will also pay CAT five annual payments of $9.375 million commencing in January 2006, contingent on the continued sale of Humira. $2 million from each of these payments will be payable to CAT’s licensors.
Abbott will pay CAT a reduced royalty of almost 2.7% from approximately 5.1% on sales of Humira from January 1, 2005 and CAT will retain all of these royalties. CAT will also retain around GBP7.6 million worth of royalties received from Abbott for sales of Humira up to December 31, 2004.
However, CAT will refund to Abbott approximately GBP9.2 million for royalties paid from January 1, 2005 through June 30, 2005.
Finally, Abbott will also pay CAT a reduced royalty of 4.75% on any future sales of autoimmune disorders treatment candidate ABT-874, from which CAT will pay a portion to the MRC and other licensors.
“We are very pleased to have reached resolution of this issue with Abbott,” said CAT chairman Dr Paul Nicholson. “We can now concentrate fully on CAT’s business going forward. CAT is already benefiting from Abbott’s successful development and marketing of Humira and we are hopeful of future success with ABT-874.”