Nabi settles arbitration with Inhibitex

Nabi Biopharmaceuticals has announced a settlement of an arbitration proceeding against fellow USA-based Inhibitex, effective August 1. Under the terms of the accord, Inhibitex agreed to pay Nabi a total of $2.2 million, $1.7 million in connection with the execution of settlement and $500,000 by October 15, with 5% interest from August 1.

In 2006, Nabi recorded $4.5 million of other biopharmaceutical revenues for contract manufacturing, consisting of $1.2 million for product manufactured under a manufacturing agreement with Inhibitex and $3.3 million for penalties in conjunction with the termination of the deal. Inhibitex disputed the amounts due. Nabi arbitrated this dispute and, in early 2007, received a favorable ruling from the arbitrator awarding the full $4.5 million. Subsequently, Nabi moved to confirm the award in the Supreme Court of New York and Inhibitex did so to vacate it. In late 2007, the court issued a decision denying Nabi's petition with respect to $3.3 million in cancellation fees, but affirmed the arbitrators award of $1.2 million which was received in January this year. Nabi filed an appeal in February with respect to the portion of the decision vacating the $3.3 million portion of the award. This settlement effectively terminates the appeal process.