CATCo Regulatory News (CAT)

26 Oct 2005 07:01

Cambridge Antibody Tech Group PLC26 October 2005 05/CAT/16 FOR IMMEDIATE RELEASE 07.00 BST, 02.00 EST Wednesday 26 October 2005 For Further Information Contact:Cambridge Antibody Technology Weber Shandwick Square Mile (Europe) Tel: +44 (0) 20 7067 0700Tel: +44 (0) 1223 471 471 Kevin SmithPeter Chambre, Chief Executive Officer Yvonne AlexanderJohn Aston, Chief Financial Officer Rachel TaylorRowena Gardner, Director of CorporateCommunications BMC Communications/The TroutAbbott Group (USA)Jennifer M Smoter Tel: 001 212 477 9007Tel: 001 847 935 8865 Brad Miles, ext 17 (media)Mob: 001 847 772 4631 Brandon Lewis, ext.15 (investors) CAMBRIDGE ANTIBODY TECHNOLOGY AND ABBOTT AGREE REGARDING ROYALTIES Cambridge, UK and Abbott Park, IL - Cambridge Antibody Technology (LSE: CAT;NASDAQ: CATG) and Abbott (NYSE: ABT) today announce that they have reached anagreement regarding royalties payable to CAT under a licence agreement betweenthe parties. Accordingly, the hearing scheduled to start this week in the Courtof Appeal will not take place. Paul Nicholson MD, Chairman, CAT, commented: We are very pleased to have reachedresolution of this issue with Abbott. We can now concentrate fully on CATsbusiness going forward. CAT is already benefiting from Abbotts successfuldevelopment and marketing of HUMIRA (R) and we are hopeful of future successwith ABT-874. Jeffrey M Leiden MD PhD, president, Abbott Pharmaceutical Products Group, said:We are pleased to find a solution that benefits both companies and resolves ourdifferences. Under the terms of the settlement agreement: - Abbott will pay CAT the sum of US$255 million, which CAT will pay to itslicensors, the Medical Research Council (MRC), Scripps Institute and Stratagene,in lieu of their entitlement to royalties arising on sales of HUMIRA from 1January 2005 onwards. - Abbott will also pay to CAT five annual payments of US$9.375 millioncommencing in January 2006, contingent on the continued sale of HUMIRA. US$2million from each of these payments will be payable to CATs licensors. - Abbott will pay CAT a reduced royalty of 2.688 per cent from approximately 5.1per cent on sales of HUMIRA from 1 January 2005. CAT will retain all of theseroyalties. CAT will also retain royalties received from Abbott in respect ofsales of HUMIRA up to 31 December 2004, net of approximately £7.6 million whichwill be paid to its licensors. CAT will refund to Abbott approximately £9.2million for royalties paid from 1 January 2005 through 30 June 2005. - Abbott will also pay CAT a reduced royalty of 4.75 per cent on any futuresales of ABT-874, from which CAT will pay a portion to the MRC and otherlicensors (according to CATs 1997 agreement with the MRC). - Abbott will capitalise and amortise the upfront payment, net of the refund,and annual payments to CAT through the term of the agreement. When thisamortisation is combined with the revised royalty rate of 2.688 per cent, theblended effective royalty rate is reduced from the approximate 5.1 per cent aspreviously instructed by the Court. - ENDS - Application of the Safe Harbor of the Private Securities Litigation Reform Actof 1995: This press release contains statements about Cambridge AntibodyTechnology Group plc (CAT) that are forward looking statements. All statementsother than statements of historical facts included in this press release may beforward looking statements within the meaning of Section 21E of the SecuritiesExchange Act of 1934. These forward looking statements are based on numerousassumptions regarding the companyOs present and future business strategies andthe environment in which the company will operate in the future. Certain factorsthat could cause the companys actual results, performance or achievements todiffer materially from those in the forward looking statements include: marketconditions, CATs ability to enter into and maintain collaborative arrangements,success of product candidates in clinical trials, regulatory developments andcompetition. We caution investors not to place undue reliance on the forwardlooking statements contained in this press release. These statements speak onlyas of the date of this press release, and we undertake no obligation to updateor revise the statements. This information is provided by RNS The company news service from the London Stock Exchange