CATCo Regulatory News (CAT)

14 Feb 2005 14:15

Cambridge Antibody Tech Group PLC14 February 2005 05/CAT/07 FOR IMMEDIATE RELEASE 14.15 GMT, 9.15 EST Monday 14 February 2005For further information contact: Cambridge Antibody Technology Weber Shandwick Square Mile (Europe) Tel: +44 (0) 1223 471 471 Tel: +44 (0) 20 7067 0700 Peter Chambre, Chief Executive Officer Kevin Smith John Aston, Chief Financial Officer Yvonne Alexander Rowena Gardner, Director of CorporateCommunications BMC Communications/The Trout Group (USA) Tel: +1 212 477 9007 Brad Miles, ext 17 (media) Brandon Lewis, ext 15 (investors) CAMBRIDGE ANTIBODY TECHNOLOGY LEGAL ACTION WITH ABBOTT: ABBOTT APPLICATION FORPERMISSION TO APPEAL Cambridge, UK Cambridge Antibody Technology (LSE: CAT; NASDAQ: CATG) reportsthat on Friday 11 February 2005, Abbott made a written application to the Courtof Appeal for permission to appeal Mr Justice Laddies judgment of 20 December2004. Abbotts application follows Mr Justice Laddies refusal on 28 January togive permission to appeal. Abbotts application will be considered by one Court of Appeal judge. If theapplication is successful, Abbott will be allowed to proceed with the appeal. Ifunsuccessful, Abbott will be entitled to request a hearing. -ENDS- Notes to Editors Cambridge Antibody Technology (CAT): CAT is a biopharmaceutical company using its proprietary technologies andcapabilities in human monoclonal antibodies for drug discovery and drugdevelopment. Based near Cambridge, England, CAT currently employs around 280people. CAT is a leader in the discovery and development of human therapeutic antibodiesand has an advanced proprietary technology for rapidly isolating humanmonoclonal antibodies using phage display and ribosome display systems. CAT hasextensive phage antibody libraries, currently incorporating more than 100billion distinct antibodies. These libraries form the basis for the Companysstrategy to develop a portfolio of antibody-based drugs. Four CAT human therapeutic antibody products are now at various stages ofclinical development, with one further product candidate in pre-clinicaldevelopment. HUMIRA, the leading CAT-derived antibody, isolated and optimised incollaboration with Abbott, has been approved for marketing as a treatment forrheumatoid arthritis in 51 countries. Six further licensed CAT-derived human therapeutic antibodies are in clinicaldevelopment by licensees, with four further licensed product candidates inpre-clinical development. CAT has alliances with a number of pharmaceutical and biotechnology companies todiscover, develop and commercialise human monoclonal antibody-based products. On 22 November 2004, CAT announced a major strategic alliance with AstraZenecato discover and develop human antibody therapeutics in inflammatory disorders. CAT has a broad collaboration with Genzyme for the development andcommercialisation of antibodies directed against TGFbeta, a family of proteinsassociated with fibrosis and scarring. CAT has also licensed its proprietary technologies to several companies. CATslicensees 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 itsIPO in March 1997 and £93m in a secondary offering in March 2000. CAT and Abbott Litigation CATs entitlement to royalties in relation to sales of HUMIRA is governed by anagreement dated 1 April 1995 between Cambridge Antibody Technology Limited andKnoll Aktiengesellschaft. The agreement allows for offset, in certaincircumstances, of royalties due to third parties against royalties due to CAT,subject to a minimum royalty level. In March 2003, Abbott indicated to CAT its wish to initiate discussionsregarding the applicability of the royalty offset provisions for HUMIRA.Following unsuccessful efforts to resolve the matter with Abbott, CAT commencedlegal proceedings against Abbott Biotechnology Limited and Abbott GmbH. The trial, which took place at the High Court in London, began on 22 November2004 and lasted three weeks. On 20 December 2004, the judge, Mr Justice Laddie, ruled in CATs favour statingthat,Abbott was in error when it made its first royalty payment to CATcalculated on the basis that only 2% of the Net Sales was due. It should havecalculated on the basis of the full royalty of just over 5% and should have paidand continued to pay CAT accordingly. In January 2005, Abbott paid to CAT US$23.73 million, representing royaltyarrears due to CAT arising from the original judgment, and an additional sum ofUS$1.29 million, representing interest and compensation for currency loss onthis amount. Abbott also paid CAT £2.85 million representing an interim paymentof legal costs due. These amounts are not reflected in the first quarter resultsannounced on 7 February 2005. Were Abbott to receive permission to appeal and besuccessful on such appeal these amounts would be repayable. Pending resolution of Abbotts request for permission to appeal and any resultantappeal, the royalty arrears payment will not be recognised as revenue, thepayment on account of costs will not be recognised in the profit and lossaccount and revenue in respect of subsequent royalty receipts will only berecognised at the two per cent rate argued by Abbott. A proportion of CATsroyalty receipts, and of the royalty arrears payment, are payable to the MedicalResearch Council and other licensors. 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 companys 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. 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