Re Alliance

RNS Number:4702F
Cambridge Antibody Tech Group PLC
22 November 2004

04/CAT/14

FOR IMMEDIATE RELEASE
07.00 GMT, 02.00 EST 22 November 2004

For further information contact:

Cambridge Antibody Technology Weber Shandwick Square Mile (Europe)
Tel: +44 (0) 1223 471 471 Tel: +44 (0) 20 7067 0700
Peter Chambre, Chief Executive Officer Kevin Smith
John Aston, Chief Financial Officer Sarah Maclead
Rowena Gardner, Director of Corporate
Communications

AstraZeneca BMC Communications/The Trout Group (USA)
Media Enquiries: Tel: +1 212 477 9007
Edel McCaffrey, Tel: +44 (0) 207 304 5034 Brad Miles, ext 17 (media)
Steve Brown, Tel: +44 (0) 207 304 5033 Brandon Lewis, ext 15 (investors)

Investor Enquiries:
Mina Blair, Tel: +44 (0) 207 304 5084
Jonathan Hunt, Tel: +44 (0) 207 304 5087

CAMBRIDGE ANTIBODY TECHNOLOGY AND ASTRAZENECA ANNOUNCE MAJOR STRATEGIC ALLIANCE
TO DISCOVER AND DEVELOP HUMAN ANTIBODY THERAPEUTICS IN INFLAMMATORY DISORDERS

ASTRAZENECA TO TAKE 19.9% EQUITY STAKE IN CAMBRIDGE ANTIBODY TECHNOLOGY

Cambridge, UK Cambridge Antibody Technology (LSE: CAT; NASDAQ: CATG) and
AstraZeneca (LSE: AZN, NASDAQ: AZN) announced today a major strategic alliance
for the joint discovery and development of human monoclonal antibody
therapeutics, principally in the field of inflammatory disorders, including
respiratory diseases. The innovative partnership structure of the alliance
reflects each companys leading position in its respective field and the growing
importance of antibodies as therapeutics. The alliance will be co-funded and
co-managed by the partners.

The principal terms of the collaboration agreement between the two parties are
summarised below:

The alliance will include a five-year discovery initiation phase during which
the partners will jointly initiate a minimum of 25 discovery programmes. The
committed joint research investment will be a minimum of $175m during this phase
which the parties will fund 50:50. CAT will contribute the greater part of the
resource in this discovery phase and expects to commit between 100 and 150
scientists per year to the programme at its peak, most if not all of which will
come from existing resources. The principal focus of the discovery programmes
will be in inflammatory disorders, however the research may extend to other
therapeutic areas.

Following the completion of the discovery phase, the parties may each elect to
continue funding programmes into development. If both parties so elect, the
programme will be jointly funded until Clinical Proof of Concept (end of Phase
IIb trials), unless either party opts-out earlier. In addition, CAT has the
option to continue to fund jointly the development of one in every five products
that reach Clinical Proof of Concept up to product launch.

CATs financial participation reflects its level of investment in the programme.
If CAT opts-out after the discovery phase it receives milestones and royalties.
If it opts-out at Clinical Proof of Concept it receives milestones and royalties
at a higher level. For those programmes which it funds to product launch it
receives higher royalties, sales milestones and an option to co-promote these
products in the US. If AstraZeneca opts-out of programmes it receives milestones
and royalties.

AstraZeneca will receive the rights to opt-in to, and develop jointly, CAT
discovery programmes existing at the commencement of this alliance and also
certain future discovery programmes that CAT may independently initiate. CAT has
rights to co-promote in the US products resulting from these programmes.

CAT will be principally responsible for antibody discovery, manufacturing
process development and the supply of material for exploratory clinical trials.
AstraZeneca will be principally responsible for translational biology, clinical
development programmes, regulatory filings and commercialisation. Joint teams
will be established to oversee the full discovery and development process.

CAT anticipates that its investment in the alliance will be the principal focus
of its research investment during the next five years.

Under a separate Subscription Agreement, AstraZeneca will subscribe in cash for
10,217,983 CAT shares at a price of #7.34 per share for a total investment of
#75 million. Based on CAT shares in issue as at 21 November 2004, this
represents a 19.9% interest in the enlarged issued share capital of CAT. The
price represents a 27.3% premium to CATs average closing share price for the
last five business days. The subscription agreement between AstraZeneca and CAT
contains certain restrictions on AstraZenecas ability to increase its stake or
to sell shares.

The subcription by AstraZeneca requires the disapplication by CAT shareholders
of statutory pre-emption rights. A circular convening an Extraordinary General
Meeting for this purpose is being posted to CAT shareholders shortly. The
alliance is conditional on the completion of the Subscription Agreement.

Peter Chambre, Chief Executive Officer of CAT, commented, This innovative
alliance with a world leader in the field of inflammatory diseases represents a
major strategic move by both companies. Not only will it enable CAT to deploy
its full range of capabilities and expertise in the early stages of product
development, but it will also allow us to enhance our capabilities in the later
stages and, for the first time, potentially participate in product
commercialisation. Most significantly, CAT will share directly in the successes
of products which result from the collaboration and it is therefore an important
and exciting opportunity for us to make a significant advance in our transition
to a product-based biopharmaceutical company. The creation of this alliance with
AstraZeneca is a tribute to their vision in seeing the opportunity for a new
model of collaboration between a major pharmaceutical company and a leading
biotechnology company.

Sir Tom McKillop, Chief Executive Officer of AstraZeneca, said, I see this
alliance with Cambridge Antibody Technology as a major component of AstraZenecas
strategy to develop new therapeutics for inflammatory and respiratory diseases.
Both partners are combining their expertise and making a significant commitment
of resources to the alliance.

Dr John Patterson, Executive Vice President Product Strategy & Licensing at
AstraZeneca also commented, We are delighted to be joining other shareholders in
this innovative biopharmaceutical company and are underpinning the closeness of
the alliance and strategic importance to both parties by making a significant
equity investment in Cambridge Antibody Technology.

-ENDS-

Notes to Editors

Cambridge Antibody Technology (CAT):

CAT is a biopharmaceutical company using its proprietary technologies and
capabilities in human monoclonal antibodies for drug discovery and drug
development. Based near Cambridge, England, CAT currently employs around 280
people

CAT is a leader in the discovery and development of human therapeutic antibodies
and has an advanced proprietary technology for rapidly isolating human
monoclonal antibodies using phage display and ribosome display systems. CAT has
extensive phage antibody libraries, currently incorporating more than 100
billion distinct antibodies. These libraries form the basis for the Companys
strategy to develop a portfolio of antibody-based drugs.

Four CAT human therapeutic antibody products are now at various stages of
clinical development, with one further product candidate in pre-clinical
development.

HUMIRA(TM), the leading CAT-derived antibody, isolated and optimised in
collaboration with Abbott, has been approved for marketing as a treatment for
rheumatoid arthritis in 51 countries. Six further licensed CAT-derived human
therapeutic antibodies are in clinical development by licensees, with four
further licensed product candidates in pre-clinical development.

CAT has alliances with a number of pharmaceutical and biotechnology companies to
discover, develop and commercialise human monoclonal antibody-based products. In
particular, CAT has a broad collaboration with Genzyme for the development and
commercialisation of antibodies directed against TGF-beta, a family of proteins
associated with fibrosis and scarring. This collaboration has so far given rise
to one antibody product candidate at clinical development stage, and one at
pre-clinical development stage.

CAT has also licensed its proprietary technologies to several companies. CATs
licensees include: Abbott, Amgen, Chugai, Genzyme, Human Genome Sciences, Merck
& Co, Pfizer and Wyeth Research.

CAT is listed on the London Stock Exchange and on NASDAQ. CAT raised #41m in its
IPO in March 1997 and #93m in a secondary offering in March 2000.

AstraZeneca:

AstraZeneca is a major international healthcare business engaged in the
research, development, manufacture and marketing of prescription pharmaceuticals
and the supply of healthcare services. It is one of the worlds leading
pharmaceutical companies with healthcare sales of over $18.8 billion and leading
positions in sales of gastrointestinal, oncology, cardiovascular, neuroscience
and respiratory products. AstraZeneca is listed in the Dow Jones Sustainability
Index (Global) as well as the FTSE4Good Index.

Antibodies as Therapeutics:

Around 20% of all biotechnology drugs in development are monoclonal antibodies**

The sector continues to grow rapidly: monoclonal antibodies are increasingly
being regarded as a major category of drugs to treat serious diseases and can
have a shorter time to market and higher success rates compared to traditional
pharmaceuticals. There is also believed to be a reduced threat from generic
competition and the potential for premium pricing.

Antibody drugs are expected to generate sales in excess of $6 billion in 2005,
and it is thought that if 10% of the antibody drugs currently in clinical trials
prove successful, total sales could reach $45 billion by 2009* Monoclonal
antibodies represent the strongest growth area of in the therapeutic proteins
market sector - by 2009, it is forecast that monoclonal antibodies will account
for 48% of all sales of therapeutic proteins. * Oncology remains the leading
therapy area, although the highest area of growth with be in the area of
autoimmune/inflammatory - and is expected to almost equal oncology in 2008.***

Antibody-based therapeutics act by mimicking and harnessing the bodys own immune
system. Monoclonal antibodies are potentially both efficacious and safe drugs
with exquisite specificity for their target antigen.

The great majority of approved monoclonal antibodies that are on the market
today are chimaeric and humanised monoclonal antibodies, with 17 antibodies
approved for commercial sale in one or more commercial territory. There are over
100 antibodies in clinical trial, approximately 50 of which are human monoclonal
antibodies.

Human monoclonal antibodies are, in themselves, unlikely to cause adverse
immunological responses in patients; a characteristic which undermined
successful development of many murine and chimaeric antibodies in the past.

(* source: Scrip Reports: PJB Publications, 2004).

(**source: PhRMA, 2002).

(*** source: Datamonitor, Dec 2003)

Application of the Safe Harbor of the Private Securities Litigation Reform Act
of 1995: This press release contains statements about Cambridge Antibody
Technology Group plc (CAT) that are forward looking statements. All statements
other than statements of historical facts included in this press release may be
forward looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. These forward looking statements are based on numerous
assumptions regarding the companys present and future business strategies and
the environment in which the company will operate in the future. Certain factors
that could cause the companys actual results, performance or achievements to
differ materially from those in the forward looking statements include: market
conditions, CATs ability to enter into and maintain collaborative arrangements,
success of product candidates in clinical trials, regulatory developments and
competition. We caution investors not to place undue reliance on the forward
looking statements contained in this press release. These statements speak only
as of the date of this press release, and we undertake no obligation to update
or revise the statements.

This information is provided by RNS
The company news service from the London Stock Exchange
END

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