Cambridge Antibody Technology's (NASDAQ:CATG) legal victory over Abbott Laboratories (NYSE:ABT) shows that a biotech David can triumph over a pharmaceutical Goliath. The case may be a harbinger of increasing assertiveness from biotech companies in their relationships with larger players.

A court in the U.K. today ruled that Abbott has been underpaying Cambridge Antibody on royalties for Humira, a monoclonal antibody approved to treat rheumatoid arthritis. The pharmaceutical company had been paying Cambridge a 2% royalty on the medication's sales, but the court ruled that the royalty should amount to just over 5%. Humira has been a major growth driver for Abbott, with sales rising 189% in the third quarter alone to $227 million. Sales for this year are forecasted at $800 million and for 2005 at $1.2 billion.

Cambridge Antibody's stock rocketed 14% on the news, but an improved royalty stream alone isn't likely to make the company profitable in the near term. Certainly the extra cash will put the company on firmer ground, and investors may have hopes for Cambridge Antibody's own pipeline of products. Success in this area, though, may be a ways off. The company's lead candidate, Trabio, is in phase 3 development for the treatment of scarring following glaucoma. However, that medication previously failed to meet initial studies' primary endpoint.

Nevertheless, Cambridge Antibody has gained the respect of major drug developers, and this respect in turn has meant more beneficial deals for the company. Last month, AstraZeneca (NYSE:AZN) agreed to buy a $140 million stake in the biotech outfit as part of a strategic alliance. That deal complemented an earlier large investment pact for Cambridge Antibody with Genzyme (NASDAQ:GENZ) in 2000.

Although Cambridge Antibody continues to bleed red ink, its expertise in the development of monoclonal antibodies puts it in a powerful position. The court case against Abbott demonstrates that Cambridge Antibody is aware of its own prominence, while its equity alliances suggest that its view of itself is shared by others.

Fool contributor Brian Gorman is a freelance writer living in Chicago. He does not own shares of any companies mentioned here.