The Court of Appeal upheld the decision of the trial judge in favour of AstraZeneca in relation to a contractual drug development dispute.
The parties had engaged in a collaborative research program (the Program) aimed at identifying a drug suitable for inhibiting the BACE enzyme, thought to be involved in the development of Alzheimer’s disease. Under the agreement that governed the collaboration, Astex claimed to be entitled to milestone payments amounting to $9m in respect of two molecules (CD1 and CD2) for which much of the development work was done by AstraZeneca alone, about the collaboration had ended. At the time of trial, the claim was potentially worth many hundreds of millions of dollars more, had CD2 progressed to being a marketed drug, but by the time of the appeal its clinical trials had been discontinued.
Astex argued that the Program continued after the collaboration term had ended. The Court of Appeal disagreed. It followed that, on a proper construction of the agreement, the development of CD1 and CD2 had not taken place under the Program and no payments were due to Astex. The trial judge had found in favour of AstraZeneca on additional points of construction and fact, but the Court of Appeal did not find it necessary to deal with Astex’s appeal against those points since the primary finding was determinative.
The trial judge had additionally held that that the costs of the action due to AstraZeneca should, in part, be paid on the indemnity basis. The Court of Appeal held that all costs should be paid on the standard basis. The value of this finding in favour of Astex was, however, dwarfed by the value of the finding against Astex on the substantive appeal.