Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Cambridge Antibody Technology Group -- Ignore unavailable to you. Want to Upgrade?

To: keokalani'nui who wrote (415)	10/15/2003 7:01:14 AM
From: nigel bates	Read Replies (2) \| Respond to of 625

Comment from the FT. (What are the royalty numbers ? Every time I see an estimate, it's slightly different) Cambridge Antibody Technology threatened Abbott Laboratories with legal action on Tuesday, over the level of royalties the US healthcare company has paid on its recently-launched arthritis treatment Humira. The first royalty check is normally a cause for celebration at a biotechnology company, but John Aston, CAT's chief financial officer, said Abbott had used loopholes in the 1995 licensing agreement to cut its payment by about 70 per cent. The news sent CAT shares down 21p to 505p. The dispute centres on whether royalties that Abbottpays to other companies for the right to make Humira should be offset against the 3.5 per cent sales royalty CAT was due to receive for the arthritis drug. Abbott is thought to have paid only 1 per cent, a cut that could cost CAT up to $25m-a-year in lost revenues. Analysts say Humira could be a billion-dollar product, with sales expected to hit $250m this year. "If you compute the difference this makes to CAT it is significant numbers," Mr Aston said. CAT and Abbott have agreed to go to arbitration over the payments, but Mr Aston said the dispute could end up in court if they failed to reach an agreement. Karl Keegan, analyst at Canaccord, said the cut in royalties was equivalent to about 400p-a-share, but that it had been widely expected. "This gives you a lower valuation and the dispute is not likely to be resolved soon, but on the positive side it removes uncertainty [over the payments] and it is not a life or death issue for CAT," he said...