CAT royalty dispute threatens future drugs

Cambridge Antibody Technology, the biotech group which is trying to recover royalties on its only launched drug, says a High Court battle that begins today could have implications for several licensing agreements it has signed.

CAT is suing Abbott, the US pharmaceutical giant which developed and markets Humira, a blockbuster arthritis drug which was discovered by the UK company. Abbott says clauses in the original licensing contract allowed it to offset other costs against the royalties paid to CAT. If Abbott's view prevails, CAT will lose out on an estimated £100m over the life of the drug.

Peter Chambré, the chief executive of CAT, said the legal clauses in dispute had been used in other licensing deals on drugs still in development by partners. The admission suggests today's court battle - with a judgment expected in the new year - could be even more important in the long term to CAT's goal of establishing a sustainably profitable drug company.

But Mr Chambré said the royalties on Humira remained the most significant immediate issue. "There is no other agreement with the same combination of language and financial exposure," he said. "While there is similar language in other agreements, the maximum offset is smaller."