CAMBRIDGE ANTIBODY TECHNOLOGY PREVAILS IN PROCEEDINGS IN HIGH COURT RE: HUMIRA

Cambridge, UK... Cambridge Antibody Technology (LSE: CAT; NASDAQ: CATG) reports
that in the trial against Abbott in the High Court in London, the trial judge,
Mr Justice Laddie announced this morning that he finds in favour of CAT. A full
written judgement has been released. Set out below in full is the shorter
statement provided by the judge in court.

'This morning I am handing down my judgment in this action. Because of its
commercial sensitivity, and with the agreement of counsel, I have not adopted
the normal procedure of making a draft available in advance.

The judgment, which will be available for collection in a moment, is of some
length. It is appropriate that I indicate the conclusion I have come to. What I
say now is not to be taken as altering, expanding or in any way qualifying what
is set out in the full judgment.

The parties, Cambridge Antibody Technology (CAT) on one side and Abbott on the
other, are parties to an agreement, originally entered into in 1993 and then
replaced by another to substantially the same effect in 1995. Under it CAT has
licensed Abbott to make use of its ground breaking technology, referred to as
library and phage display technology, for the purpose of enabling Abbott to
develop, make and sell a genetically engineered human antibody to be used in the
treatment of rheumatoid arthritis. The program to develop and make this antibody
is lengthy and involves some of the most modern techniques of genetic
engineering. CAT's technology is used at an early stage in the program.

The program has been successful. Abbott has put upon the market a product
containing the antibody. It is called HUMIRA. In a short time, its sales have
been substantial.

Under the agreements, Abbott is contractually bound to pay royalties to CAT at a
rate of just over 5% of the Net Sales of HUMIRA. That royalty obligation is
subject to an offset or royalty sharing provision. It allows Abbott to deduct
from the royalties due to CAT half of the royalties paid by it for licences from
third parties for certain categories of technology. There is a minimum royalty
provision of 2%.

The parties dispute the extent of this offset or royalty sharing provision. CAT
argues that, on its proper construction, the relevant provisions of the 1993 and
1995 Agreements mean that Abbott can only demand that CAT shares royalties in
respect of the third party rights covering CAT's library and phage display
technology. Abbott argues that it is entitled to require CAT to share 50/50 in
the royalty burden it has in respect of all technology it uses throughout the
development and production process up to and including the production of the
human antibody from host cells.

There are no relevant third party rights in respect of the library and phage
display part of the development and manufacturing program. For that reason CAT
says that it is entitled to the full royalty provided for under the agreement.
On the other hand there are a number of such rights in respect of the later
parts of the program down to the point at which the antibody is produced. Abbott
has paid or undertaken to pay royalties under the latter. Abbott says it can
take off half of the royalties it has so incurred. This has taken CAT's
entitlement down to the minimum guaranteed under the agreement, namely 2%.

In late 2003 Abbott began paying royalties to CAT under the 1995 Agreement. It
did so at the 2% level. CAT argues that it should have paid and should continue
to pay the full royalty due under the agreement without deduction. Hence this
action.

Besides arguing that its construction of both agreements is correct, CAT also
argues that, if it is wrong on that, the agreements do not reflect the true
intention of the parties. It says that such common intention was to limit CAT's
obligation to share royalties so that it only applied to royalties in respect of
third party rights covering the library and phage display technology which it
licensed to Abbott. It therefore asks for the court to order rectification so
that the words of the agreement accord with that common intention. Alternatively
it asks for the agreements to be rectified on the ground of unilateral mistake,
on the basis that Abbott has behaved unconscionably in advancing the argument it
does in this action.

For the reasons set out in my judgment, I have come to the conclusion that the
construction advanced by CAT is correct and that the construction advanced by
Abbott does violence to the language of the agreements, renders them obscure and
makes little or no commercial sense. For this reason CAT wins this action.

I have also considered the common mistake and rectification arguments. In
relation to them I was taken through a large number of the parties' documents
spread over some years and the evidence of a number of witnesses. For the
reasons set out in my judgment I have come to the conclusion that it is
overwhelmingly likely that CAT's case as to what was the mutual and real
intention and agreement of the parties is correct.

It follows that, had I not found in its favour in relation to the issue of
construction, I would have ordered rectification of the agreements to ensure
that they accorded with the true intention of the parties, namely that CAT's
royalty sharing obligations should extend only to third party rights which
covered its library and phage display technology and no further.

It follows that Abbott was in error when it made its first royalty payment to
CAT calculated on the basis that only 2% of the Net Sales was due. It should
have calculated on the basis of the full royalty of just over 5% and should have
paid and continued to pay CAT accordingly.'

Abbott made an application this morning for permission to appeal, which will not
be heard before late January.

-ENDS-