Peptech settles Abbott dispute amicably

The market responded favourably today to news that Peptech has reached an in principle agreement with Abbott to resolve its dispute over royalties for Abbott's anti-TNF alpha arthritis drug HUMIRA.

The share price opened up 20 per cent at AUD$1.68, trading as high as $1.85 on heavy volumes.

CEO Mel Bridges said he expected the resolution to be finalised by the two companies in a matter of weeks.

"We're very confident this will go through smoothly. There is a clear expectation that we will have it done by Christmas," he said.

Bridges said that the willingness of the two companies to find common ground had been critical to the successful resolution, as was the recognition by Abbott of Peptech's IP position.

"Both companies held their ground as to their respective positions, but there was acknowledgment from both parties of the need to retain their alliance," he said.

The news of the agreement comes the day after Cambridge Antibody Technologies, who developed HUMIRA, said that their dispute with Abbott had not been satisfactorily resolved by mediation and would go to the courts -- a lengthy and expensive process.

Peptech remains in arbitration with Johnson & Johnson over Remicade, another anti-TNF alpha arthritis drug developed by J&J subsidiary Centocor. A decision is not expected on that dispute until mid-2004, Bridges said.

"I would rather be in that process, than in a court dispute with Abbott," he said.