Healthcare Industry News: paclitaxel
News Release - November 8, 2007
Abraxis BioScience Announces the Closing Date for the Separation of Its Proprietary Business from Its Hospital-Based BusinessClose Scheduled to Occur on November 13, 2007
APP Pharmaceuticals, the Hospital-Based Business, Reports Last Twelve Month Revenue of $653 Million and Expects Adjusted EBITDA to be between $258 and $263 Million for the Last Twelve Months Ending September 30, 2007
LOS ANGELES--(HSMN NewsFeed)--Abraxis BioScience, Inc. (NASDAQ:ABBI ) today announced details of its pending separation of its proprietary business from its hospital-based business, which will enable each company to deliver on their strategic visions and compete more effectively in their specialized marketplaces. This transaction will separate Abraxis into two independent publicly traded companies: the new Abraxis BioScience, Inc., which will consist of Abraxis Oncology and Abraxis Research, and APP Pharmaceuticals, Inc. (APP), formerly known as Abraxis Pharmaceutical Products. This transaction is expected to close on November 13, 2007.
As part of this transaction, APP will receive a loan of $1.15 billion of senior credit facilities comprised of a funded $1.0 billion term loan and an unfunded $150 million revolving credit facility. This debt will be underwritten by Deutsche Bank Securities Inc. and Wachovia Capital Markets, LLC. The financing represents 3.8x leverage on the term loan based on an estimated Adjusted EBITDA for APP between $258 and $263 million for the last twelve months ending September 30, 2007. Moody’s Investors Service has assigned a Ba3 Corporate Family Rating to APP and a Ba3 rating to the senior secured credit facilities. In addition, Moody’s assigned a Speculative Grade Liquidity rating of SGL-2, which reflects its belief that APP will have good liquidity through 2008 and that the outlook for the company is stable. Approximately $265 million will be used to pay off Abraxis’ existing credit facility and approximately $715 million will be contributed to the new Abraxis.
The Company has received a favorable private letter ruling from the Internal Revenue Service regarding the U.S. federal income tax consequences of certain aspects of the separation and related transactions. Additional information on the carved-out financials for the proprietary business has been filed with the Securities and Exchange Commission.
Each current shareholder of Abraxis will retain the same economic position and maintain the same ownership percentage in each of the new companies. The shares of the new Abraxis BioScience common stock have been approved for listing on the Nasdaq Global Market under the symbol “ABII” and APP Pharmaceuticals will trade on the Nasdaq Global Market under the symbol “APPX.”
Patrick Soon-Shiong, M.D., who will serve as chief executive officer and chairman of the board of both companies, said, “We are very pleased with this transaction and each company is excited to enter the next phase. We are proud of what we have accomplished but very much look forward to what each company can accomplish as a standalone company with a pure focus. The prospects for growth for both Abraxis and APP are enormous, and we will now be positioned more than ever to capitalize on these opportunities. My thanks, and the thanks of our Board, go out to the many people within our organizations who have contributed to this effort.”
Dr. Soon-Shiong, who will remain as chairman and chief executive officer of Abraxis, will serve as chief executive officer of APP for less than 12 months and will remain as chairman of the board of APP. Lisa Gopala, who will continue to serve as chief financial officer of Abraxis, will serve as chief financial officer for APP until the appointment of a new chief financial officer which is anticipated to occur within less than 12 months. Richard E. Maroun, who currently serves as chief administrative officer, general counsel, and corporate secretary, will now become part of the management team for APP. He will continue to serve in this capacity for the new Abraxis until a new general counsel is appointed. Mitchall Clark, who currently serves as senior vice president of regulatory affairs for Abraxis, will also serve in that role for APP until a new person is appointed.
Additional members of the APP Pharmaceuticals management team include Thomas H. Silberg, President, and Frank Harmon, executive vice president and chief operating officer.
In addition to Dr. Soon-Shiong, other members of the board for Abraxis are: Kirk K. Caloun, certified public accountant, retired partner, Ernst & Young, LLP, David S. Chen, Ph.D., Cypac Investment Management, Stephen D. Nimer, M.D., Memorial Sloan Kettering Cancer Center and Leonard Shapiro, chief executive officer of Shapco, Inc.
Dr. Soon-Shiong will remain as chairman of the APP board. Other members of the APP board include: Michael D. Blaszyk, chief financial officer of Catholic Healthcare West and Michael S. Sitrick, chairman and chief executive officer, Sitrick and Company. Confirmation of additional members of the APP board is in progress and will be announced at a later date.
APP Pharmaceuticals has one of the most diversified injectable product portfolios within the pharmaceutical sector. Its products have helped millions of people in the United States and Canada fight critical illnesses by providing important pharmaceutical products, including those that are difficult to manufacture and are urgently needed.
Subsequent to the separation, APP will be one of the largest manufacturers of injectable pharmaceuticals focused on constantly expanding an already broad portfolio of anti-infectives, oncolytics, anesthetics/analgesics and critical care product lines. APP is now better positioned to maximize its core strength by continuously launching new products, enhancing current product offerings and pursuing new opportunities.
APP is now primed to capitalize on the growth of the generic injectables market, which is currently valued at approximately $3 billion. This market is driven by increasing patent expiries, consistent and strong demand, an aging population, and a focus on controlling healthcare costs.
APP has headquarters in Schaumburg, Illinois and is supported by manufacturing facilities totaling 700,000 square feet of U.S. and EU compliant operations. APP will now employ approximately 1,400 people across its operations. Additional financial and other information on the APP business can be found in an 8-K that has been filed with the Securities and Exchange Commission as well as on the current Abraxis BioScience Web site.
New Abraxis BioScience
Abraxis BioScience, with headquarters in Los Angeles, California, is one of the few fully integrated biotechnology companies. It is dedicated to delivering progressive therapeutics and core technologies that offer patients and medical professionals safer and more effective treatments for cancer and other critical illnesses. ABRAXANE net sales are expected to be in the range of $285 to $305 million in 2007.
Abraxis, with its breakthrough marketed product, ABRAXANE® (paclitaxel protein-bound particles for injectable suspension) (albumin-bound), global ownership of its proprietary technology platform and pipeline, dedicated nanoparticle manufacturing capabilities, combined with its seasoned in-house capabilities, including discovery, clinical drug development, regulatory and sales and marketing, is positioned to emerge as a leading global biotechnology company with sustainable high growth and value creation for its stockholders.
The new Abraxis portfolio includes the world’s first and only protein-based nanoparticle chemotherapeutic compound (ABRAXANE) which is based on its proprietary tumor targeting technology known as the nab™ technology platform. This nab technology platform is the first to exploit the tumor’s biology against itself, taking advantage of an albumin-specific, receptor-mediated transport system and allowing the delivery of a drug from the vascular space across the blood vessel wall to the underlying tumor tissue.
From the discovery and research phase to development and commercialization, Abraxis is committed to rapidly enhancing its product pipeline and accelerating the delivery of breakthrough therapies that will transform the lives of patients who need them.
Each current shareholder of Abraxis will retain the same economic position and maintain the same ownership percentage in each of the new companies. The number of outstanding shares for APP will be approximately 160 million shares, representing one APP share for one current Abraxis share. The number of outstanding shares in the new Abraxis will be approximately 40 million shares, representing one new Abraxis share for every four current Abraxis shares.
Conference Call Information
On Thursday, November 8, 2007, the company will host a conference call with interested parties beginning at 8:30 a.m. PST/11:30 a.m. EST to review its results of operations for the third quarter of 2007 and the upcoming 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 APP Pharmaceuticals
Founded in 1997, APP Pharmaceuticals is a leading manufacturer of multi-source and branded injectable pharmaceutical products for acute medical care both in patient and ambulatory settings. Through continuous expansion of its’ broad portfolio of products covering a wide array of therapeutic categories, APP’s products provide ongoing affordable healthcare helping millions of people in the United States and Canada fight critical illnesses.
Headquartered in Schaumburg, Illinois, APP’s 1,400 employees are united in their commitment to operations excellence in the ultimate effort to provide products that elevate patient care. APP has offices in Canada and manufacturing operations in Illinois, New York and Puerto Rico and will be traded on The Nasdaq Global Market under the symbol APPX. For more information about APP and the products it provides, please visit www.APPpharma.com.
About the new Abraxis BioScience
Abraxis BioScience is a fully integrated biotechnology company dedicated to delivering progressive therapeutics and core technologies that offer patients and medical professionals safer and more effective treatments for cancer and other critical illnesses. The Abraxis portfolio includes the world’s first and only protein-based nanoparticle chemotherapeutic compound (ABRAXANE) which is based on its proprietary tumor targeting system known as the nab™ Technology platform. From the discovery and research phase to development and commercialization, Abraxis BioScience is committed to rapidly enriching the company’s pipeline and accelerating the delivery of breakthrough therapies that will transform the lives of the patients who need them. Abraxis, with headquarters in Los Angeles, California, will trade on the Nasdaq Global Market under the symbol “ABII.” For more information about the company and its products, please visit www.abraxisbio.com.
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. 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, 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.
Source: Abraxis BioScience
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