Biotechs Beware: Royalty Offset Clauses Can Seriously Damage Your Health
Executive Summary
Cambridge Antibody's royalty dispute with partner Abbott over potential blockbuster Humira sends a sobering message to biotechs: beware poorly-constructed royalty offset clauses. The argument won't help Abbott's partnering image, either.
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KuDOS/Novacea: Pooling Biotech Resources
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Cambridge Antibody: Time to Transform
Critics charge that Cambridge Antibody's lack of involvement to date in the clinical fate of its antibodies has caused it to stagnate and opened up a significant gap in the firm's pipeline. The recent renegotiation of its anti-TGF-beta deal with Genzyme, however, demonstrates CAT's willingness to take increased risks, and that it recognizes the need to take a greater stake in the development of its own product candidates. Once CAT begins to buy in the products necessary to invigorate its pipeline it will be easier to look past the firm's lackluster dealmaking and a royalty dispute with Abbott over Humira. After all, CAT has an industry-leading technology platform and an ample cash-pile, and there have been recent signs of life in the antibody licensing market.