Abraxis BioScience Announces Plan to Separate Into Two Independent Public Companies

  
    
  
  
    
      Abraxis BioScience, Inc. (NASDAQ:ABBI) today announced its intention to 
      separate the company's hospital-based product business -- Abraxis 
      Pharmaceutical Products (APP) -- from its proprietary product business 
      -- Abraxis Oncology and Abraxis Research (the new Abraxis BioScience) -- 
      in a transaction that will result in two independent, highly focused 
      public companies. The transaction would enable each company to deliver 
      on their strategic visions and compete more effectively in their 
      specialized marketplaces with their differing capital requirements and 
      business mandates. The transaction is subject to obtaining a ruling from 
      the Internal Revenue Service that the separation will be tax-free to 
      Abraxis BioScience and its shareholders.
    
    
      Following the separation of the businesses, each current shareholder 
      will own one share of Abraxis Pharmaceutical Products, which is expected 
      to be known as APP, Inc., and one share of the new Abraxis BioScience, 
      for each share previously held. It is currently expected that APP will 
      be traded on the NASDAQ Global Market under the ticker symbol �APPX� 
      and the new Abraxis BioScience, as a new publicly traded company, will 
      be traded on the NASDAQ Global Market under the company�s 
      current ticker symbol �ABBI.�
    
    
      Abraxis has received commitments for $1.45 billion of senior credit 
      facilities comprised of a funded $1.3 billion term loan and an unfunded 
      $150 million revolving credit facility.�The funded financing is 
      anticipated to represent approximately 4.8 to 5.2x of APP's estimated 
      adjusted EBITDA for the previous four quarters prior to the close. APP 
      will be responsible for servicing the debt following the separation.�A 
      portion of the proceeds raised through the debt financing will be used 
      to repay the current company's existing indebtedness and approximately 
      $1.0 billion will be transferred to the new Abraxis BioScience 
      immediately prior to the separation.�The consolidated adjusted EBITDA as 
      set forth in the table attached for the current Abraxis BioScience was 
      $250.6 million for the fiscal year ended 2006.
    
    
      Detailed information about the separation of the businesses will be 
      provided when the company files a Form 10 registration statement for the 
      new Abraxis BioScience, which is expected to be filed in the third 
      quarter of 2007.
    
    
      Patrick Soon-Shiong, M.D., chairman and chief executive officer of 
      Abraxis BioScience, stated, "Strategic initiatives executed over the 
      past few years, including the acquisition of global rights to ABRAXANE 
      and the nab technology platform, the acquisition of the 
      AstraZeneca anesthesia/analgesic portfolio and the acquisition of the 
      Pfizer manufacturing facility in Puerto Rico, have accelerated the 
      growth of two robust businesses with more than 1,900 employees and 
      combined revenues that are expected to approach $1 billion by the end of 
      2007.
    
    
      �By separating these unique business units 
      into two entities, we believe we will be able to unlock the intrinsic 
      value of both companies by allowing each company to pursue its unique 
      long-term strategic initiatives and address their diverse operational 
      and capital needs. Furthermore, the separation will permit each company 
      to focus on their respective pipelines, and business development 
      opportunities and compete more effectively in their individual 
      marketplaces,� continued Dr. Soon-Shiong. �APP, 
      with one of the most comprehensive injectable product portfolios in the 
      U.S. and one of the only companies that mirror the overall market demand 
      for injectable products, will be positioned to maximize its core 
      strength to enhance current product offerings and pursue new 
      opportunities including biosimilars. APP has demonstrated a remarkable 
      ability to remain flexible while continuing to aggressively pursue new 
      opportunities and products and, as a standalone entity, this ability to 
      respond rapidly to the needs in the generic marketplace will be enhanced.
    
    
      �The proceeds provided to the new Abraxis 
      BioScience in this transaction will permit this entity to become a 
      highly focused biotechnology company, strategically concentrating on its nab 
      technology platform to deliver progressive therapeutics, such as 
      ABRAXANE, and develop core technologies that offer new and personalized 
      treatments to patients with life-threatening diseases. The era of 
      personalized medicine has arrived, and with the financial and scientific 
      resources created as a result of this transaction, the new Abraxis 
      BioScience will be uniquely positioned to forge new paradigms of drug 
      discovery and personalized drug development," said Dr. Soon-Shiong.
    
    
      �APP has a strong, stable cash flow and has 
      established an impressive record of revenue growth and gross margins 
      which will adequately support the debt,� said 
      Lisa Gopala, chief financial officer of Abraxis BioScience. �With 
      a capital infusion of approximately $1.0 billion and 2007 net sales 
      expected in the range of $285 million to $305 million from ABRAXANE, the 
      new Abraxis BioScience will have the financial resources to maximize its 
      pipeline potential and capture opportunities that enhance 
      commercialization depth and establish Abraxis as a leader in 
      biotechnology.�
    
    
      The transaction is expected to be completed in the fourth quarter of 
      2007, subject to customary closing conditions, obtaining of a private 
      letter ruling from the Internal Revenue Service, and other regulatory 
      approvals.
    
    
      In connection with the transaction, Wachovia Securities and Merrill 
      Lynch & Co. are acting as financial advisors, and Fried, Frank, Harris, 
      Shriver and Jacobson, LLP and Morrison & Foerster, LLP, are acting as 
      legal advisors to Abraxis BioScience.
    
    
      APP
    
    
      Following the separation, APP will be one of the largest standalone 
      publicly traded companies focused on injectable pharmaceuticals and will 
      have approximately 1,400 employees. Pursuant to the guidance previously 
      provided, APP expects to generate revenue growth in 2007 in the mid 
      teens over the 2006 revenue of $583 million. The headquarters of APP 
      will remain in Schaumburg, Illinois.
    
    
      APP will continue to focus on bringing to patients and their healthcare 
      providers one of the broadest injectable portfolios of products in the 
      U.S. The current injectable portfolio is comprised of anti-infectives, 
      critical care, oncology and anesthetic/analgesic products totaling over 
      400 dosage forms. In addition to its strong revenue base and broad 
      product offerings, APP also intends to leverage its expansive 
      manufacturing capabilities, operational strength, and solid 
      infrastructure to pursue growth opportunities as well as develop new 
      technologies to benefit the patients who use its products every day.
    
    
      Dr. Soon-Shiong will remain as chairman and serve as chief executive 
      officer of APP. The operating management team that led to the growth of 
      APP in 2006 will remain in place and be further strengthened over time 
      to execute on its vision. Thomas H. Silberg will continue to lead APP as 
      president. Frank Harmon will remain as executive vice president and 
      chief operating officer of APP. Key executive officer positions, as well 
      as the Board of Directors, will be named prior to, or at the time of, 
      the close of the transaction.
    
    
      In 2006, APP remained a market leader with 10 ANDA approvals. From 2001 
      to 2006, APP led the market with 55 ANDA approvals. Including the 29 
      ANDAs pending with the FDA, representing approximately $1.6 billion in 
      annual branded sales, APP currently has over 60 product candidates in 
      various stages of development.
    
    
      The New Abraxis BioScience
    
    
      The new Abraxis BioScience, as a standalone publicly traded company, 
      will have its headquarters in Los Angeles, California and employ more 
      than 500 people. The company will continue to market ABRAXANE and 
      accelerate the development of its pipeline which utilizes the nab� 
      (nanoparticle-albumin bound) technology platform.
    
    
      The new Abraxis BioScience will combine the Abraxis Oncology and Abraxis 
      Research business units. Dr. Soon-Shiong will continue to serve as its 
      chairman and chief executive officer. The executive committee of Abraxis 
      BioScience will remain in their current positions. The new board of 
      directors for this business will be determined prior to, or at the close 
      of, the transaction.
    
    
      ABRAXANE is marketed in the U.S. and Canada and posted revenue in 2006 
      of $175 million. For the first quarter of 2007, revenue increased 134 
      percent to $70.9 million versus the first quarter of 2006. Full year 
      2007 guidance for ABRAXANE net sales is $285 million to $305 million. 
      According to May 2007 IntrinsiQ data, ABRAXANE was the taxane market 
      leader in mestastatic breast cancer with a 36.4 percent share for 
      ABRAXANE compared to 35.9 percent for paclitaxel (Taxol� 
      and generic paclitaxel) and 27.7 percent for Taxotere�.
    
    
      ABRAXANE is currently under active review in Australia, Russia and the 
      European Union by their respective regulatory agencies. In China, 
      ABRAXANE is in the final step in the regulatory approval process and in 
      Japan, ABRAXANE development is underway in partnership with Taiho 
      Pharmaceuticals, the leading domestic oncology company in that country.
    
    
      The nab� tumor-targeting technology, 
      which harnesses the unique natural properties of the human protein 
      albumin to transport and deliver therapeutic agents to the site of 
      disease, was developed by Abraxis scientists. ABRAXANE, which was 
      approved in the U.S. in January 2005, was the first product developed 
      using the nab technology. In addition to the previously announced 
      initiation of clinical trials for nab-docetaxel (ABI-008), 
      studies are ongoing to evaluate several other therapeutic candidates 
      that employ the nab technology, including the mTOR inhibitor nab-rapamycin 
      (ABI-009) and the HSP90 inhibitor nab-17AAG (ABI-010), among 
      others. The IND for ABI-009, which was recently approved, is the third 
      investigational product based on the company�s 
      nab technology platform. Abraxis anticipates filing two 
      additional IND submissions over the next 12 to 18 months for ABI-010 and nab-thiocolchicine 
      dimer (ABI-011).
    
    
      Conference Call Information
    
    
      The company will host a conference call with interested parties today 
      beginning at 8:30 a.m. PDT/11:30 a.m. EDT to review the details of the 
      proposed separation. The conference call may be heard by interested 
      parties through a live audio Internet broadcast at www.abraxisbio.com 
      and www.earnings.com. For those 
      unable to listen to the live broadcast, a playback of the webcast will 
      be available at both websites for approximately six months beginning 
      shortly after the conclusion of the call.
    
    
      About Abraxis BioScience, Inc.
    
    
      Abraxis BioScience, Inc. is an integrated global biopharmaceutical 
      company dedicated to meeting the needs of critically ill patients. The 
      company develops, manufactures and markets one of the broadest 
      portfolios of injectable products and leverages revolutionary technology 
      such as its nab� platform to discover 
      and deliver breakthrough therapeutics that transform the treatment of 
      cancer and other life-threatening diseases. The first FDA approved 
      product to use this nab platform, ABRAXANE�, 
      was launched in 2005 for the treatment of metastatic breast cancer. 
      Abraxis trades on the NASDAQ Global Market under the symbol ABBI. For 
      more information about the company and its products, please visit www.abraxisbio.com.
    
    
      FORWARD-LOOKING STATEMENTS
    
    
      The statements contained in this press release that are not purely 
      historical are forward-looking statements within the meaning of Section 
      21E of the Securities Exchange Act of 1934, as amended. Forward-looking 
      statements in this press release include statements regarding our 
      expectations, beliefs, hopes, goals, intentions, initiatives or 
      strategies, including statements regarding the separation of the 
      proprietary product business from the hospital-based business and the 
      expected revenues of these businesses. Because these forward-looking 
      statements involve risks and uncertainties, there are important factors 
      that could cause actual results to differ materially from those in the 
      forward- looking statements. These factors include, but are not limited 
      to, the inability to obtain a private letter ruling from the IRS on the 
      tax-free nature of the transactions; the failure to obtain the necessary 
      debt financing arrangements; risks that the proposed transaction 
      disrupts current plans and operations and the potential difficulties in 
      employee retention; the inability to recognize the benefits of the 
      transactions contemplated by the separation of the businesses; the 
      continued market acceptance and demand of new and existing products for 
      the proprietary product and the hospital-based products businesses; the 
      difficulties or delays in developing, testing, obtaining regulatory 
      approval of, and producing and marketing of their products; the impact 
      of competitive products and pricing; the availability and pricing of 
      ingredients used in the manufacture of pharmaceutical products; and the 
      ability to successfully manufacture products in a time-sensitive and 
      cost effective manner. Additional relevant information concerning risks 
      can be found in Abraxis BioScience�s Form 
      10-K for the year ended December 31, 2006 and other documents it has 
      filed with the Securities and Exchange Commission. The information 
      contained in this press release is as of the date of this 
      release.�Abraxis assumes no obligations to update any forward-looking 
      statements contained in this press release as the result of new 
      information or future events or developments.
    
    
      
        
          Abraxis BioScience, Inc.
        
      
      
        
          Reconciliation of Net Income to Adjusted EBITDA(1)
        
      
      
        
          For the Year Ended December 31, 2006
        
      
      
        
          (unaudited, in thousands)
        
      
      
        
        
        
        
        
          �
        
      
      
        
          Net income
        
        
        
        
          $
        
        
          (46,897)
        
      
      
        
          Depreciation and amortization
        
        
        
        
        
        
          79,691
        
      
      
        
          Interest expense (net of interest and other income)
        
        
        
        
        
        
          9,971
        
      
      
        
          Income tax expense
        
        
        
        
        
        
          29,299
        
      
      
        
          Merger related in-process research and development charge (2)
        
        
        
        
        
        
          105,777
        
      
      
        
          Stock-based compensation expense (3)
        
        
        
        
        
        
          35,023
        
      
      
        
          Merger costs (2)
        
        
        
        
        
        
          17,954
        
      
      
        
          Puerto Rico pre-launch costs (4)
        
        
        
        
        
        
          11,246
        
      
      
        
          Minority interests
        
        
        
        
        
        
          11,383
        
      
      
        
          Equity in net income of Drug Source Company, LLC
        
        
        
        
          �
        
        
          (2,847)
        
      
      
        
          Adjusted EBITDA (1)
        
        
        
        
          $
        
        
          250,600
        
      
      
        
        
        
        
        
          �
        
      
      
        
          
            (1) We define Adjusted EBITDA as net income, excluding the impactof 
            depreciation and amortization, interest expense net of interestincome 
            and other income, income tax expense, stock-basedcompensation 
            expense, merger costs, merger related in-processresearch and 
            development charge, minority interests, equityinterests in 
            Drug Source Company, LLC and pre-launch costsassociated with 
            Puerto Rico manufacturing facility. We useadjusted EBITDA to 
            provide meaningful supplemental information toinvestors in 
            understanding the underlying operating performance ofthe 
            business and facilitate additional analysis by investors. Webelieve 
            that Adjusted EBITDA can assist management and investorsin 
            assessing the financial operating performance and underlyingstrength 
            of our core business. Adjusted EBITDA is not a recognizedterm 
            under GAAP and should not be considered in isolation of, oras 
            a substitute for, the information prepared and presented inaccordance 
            with GAAP. Because not all companies calculate AdjustedEBITDA 
            identically, our definition of Adjusted EBITDA may not becomparable 
            to similarly titled measures of other companies.
          
        
      
      
        
          
            (2) Represents one-time costs, not including amortization,associated 
            with the 2006 merger.
          
        
      
      
        
          
            (3) Amounts included in stock compensation expense could be settledin 
            cash.
          
        
      
      
        
          
            (4) Represents pre-launch costs associated with Puerto Ricomanufacturing 
            facility acquired in March 2007.
          
        
      
    
    
      Taxol� is a 
      registered trademark of Bristol-Myers Squibb Company.
    
    
      Taxotere� is a 
      registered trademark of Sanofi-Aventis.