Abbott Laboratories (ABT) reached an agreement with Biotest AG
(BBTAY, BIO.XE) to develop and commercialize the Germany-based
company's treatment for rheumatoid arthritis and psoriasis.
Under the agreement, Abbott will pay an upfront fee of $85
million to Biotest, which specializes in haematology and immunology
products. The agreement also includes potential milestone payments
of up to $395 million.
The companies will co-promote the treatment in Germany, France,
the U.K., Italy and Spain. Abbott will have exclusive rights
outside those five markets.
Abbott's diversified business lineup has cushioned it from some
problems facing other large drug makers, such as patent expirations
and generic competition. It has made a series of acquisitions in
recent years to help reduce its dependence for sales growth on the
anti-inflammatory drug Humira, which may face heightened
competition in coming years.
Biotest's treatment, which aims to improve the body's immune
system response to the diseases, is in phase II clinical trials.
Preclinical studies are under way to assess potential use in other
immune-system related diseases.
"This novel compound will strengthen Abbott's immunology
pipeline and we look forward to continuing to build on our
expertise in exploring multiple mechanisms and approaches to treat
inflammatory diseases," said John Leonard, senior vice president of
global research and development at Abbott.
Abbott in April reported a 14% decline in first-quarter earnings
on costs associated with acquisitions and employee layoffs, while
newly acquired drugs in foreign markets contributed to a 17%
increase in revenue.
Abbott shares were up 8 cents at $52.10 in early trading.
Biotest's American depositary shares rose 8 cents to $30.56.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com