Herbert Smith lands major biotech client

Deal of the week – Cambridge Antibody Technology v Abbott

Herbert Smith has been instructed for the first time by leading biotech public company Cambridge Antibody Technology (CAT) in a major litigation after beating off rivals in a beauty parade.

Mayer Brown Rowe & Maw previously advised the company on corporate law in the UK, but CAT has never instructed it on any significant litigation in England. It is unclear why CAT did not instruct Mayer Brown in its current action against pharmaceutical giant Abbott. The firm’s partners and spokesman did not comment.

The dispute centres on claims by CAT that Abbott, represented by Slaughter and May intellectual property partner Susie Middlemiss, has underpaid the royalties it owes to CAT for developing a so-called potential blockbuster rheumatoid arthritis drug called Humira. Abbott paid for the drug’s development.

Andrew Rich, the Herbert Smith partner handling the case along with litigation head David Gold, said he successfully pitched for the work, but he declined to comment on who else pitched.

Gold put the win down to two things: first, Gold had been recommended by CAT chief executive Peter Chambre, who knew Gold when Chambre was chief executive of drugs supply company Bespak; second, CAT group lawyer Diana Mellett was keen to instruct Rich after seeing him act in another case. Rich said: “I knew Diana when I appeared against CAT for Japanese company Chagai… They looked at us on the other side and liked us.”

In the forthcoming litigation, Abbott denies owing the higher amount in royalties because of a contractual arrangement stating that, under certain conditions, Abbott can deduct royalty payments to CAT in order to pay third parties which license Humira. CAT denies such conditions apply in this instance.

Humira could become the first potential blockbuster drug to come out of the UK biotechnology industry if, as is expected by industry commentators, its sales exceed $1bn (£589m) annually.

The parties have failed to resolve the dispute by mediation and the litigation is due to be heard before the High Court in around 12 months.