James Mellor QC and James Whyte appeared for the Defendant, AstraZeneca, in a case concerning payments under a collaboration agreement between AstraZeneca and the Claimant, Astex.
The terms of the agreement provided that Astex were entitled to milestone payments in certain circumstances, and to royalties from sales of any products containing a “collaboration compound”. Astex claimed that it was so entitled in relation to two candidate drugs which AstraZeneca had developed, “CD1” and “CD2”.
At issue were whether CD1 and CD2 were “collaboration compounds” pursuant to the terms of the agreement, and if not, whether AstraZeneca was entitled to recover milestone payments it had earlier made to Astex in respect of CD1. The judge also had to consider whether the agreement was capable of expiring and if so under what circumstances.
The judge found that on the correct interpretation of the agreement, neither CD1 nor CD2 constituted a “collaboration compound”. Astex was therefore not entitled to any payments from AstraZeneca. Since the payments Astex had received had been caused by AstraZeneca’s mistake as to the status of CD1, AstraZeneca was entitled to restitution of the sums paid. The agreement would expire if AstraZeneca ceased to pursue pre-clinical research referable to the Results as defined in the agreement.