Cambridge Antibody Technology Group PLC (CAT), a British biotechnology company headquartered in Cambridge, England, and Illinois-based Abbott Laboratories have reached an agreement regarding royalties payable to CAT for Humira® (adalimumab), the tumor necrosis factor-alpha (TNF-α) inhibitor approved to treat rheumatoid arthritis and psoriatic arthritis.
Under the terms of the 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 royalties arising from sales of Humira as of January 2005. Abbott will pay CAT a reduced royalty rate of 2.688% from approximately 5.1% on sales of Humira from January 2005. Beginning in January 2006, Abbott will make five annual payments to CAT of $9.375 million, $2 million from each payment to be paid to the licensors.
Abbott will also pay CAT a reduced royalty of 4.75% on any future sales of ABT-874 (a fully human anti-interleukin-12 monoclonal antibody in phase II development for multiple sclerosis and Crohn's disease), from which CAT will pay a portion to the MRC and other licensors.
Abbott acquired Humira in 2001 following its $6.9 billion purchase of Knoll Pharmaceuticals, which had an agreement with CAT for the drug at that time. A British court ruled late last year that Abbott should pay CAT a royalty rate of just over 5% of net sales, instead of the 2% it had been paying. Abbott appealed, and a hearing on the case had been scheduled to start last week in the Court of Appeal.
Humira® is expected to generate more than $1.3 billion in total sales for Abbott. The first commercial sales of the drug began in 2003.
—A. Techman