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Abraxis BioScience, Inc. plans to separate its hospital-based product business, Abraxis Pharmaceutical Products (APP), from its proprietary products businesses, Abraxis Oncology and Abraxis Research, to form two public companies. Abraxis Pharmaceutical Products will become APP Inc., and Abraxis Oncology and Abraxis Research will become the new Abraxis BioScience.
Los Angeles (July 2)-Abraxis BioScience, Inc. plans to separate its hospital-based product business, Abraxis Pharmaceutical Products (APP), from its proprietary products businesses, Abraxis Oncology and Abraxis Research, to form two public companies. Abraxis Pharmaceutical Products will become APP Inc., and Abraxis Oncology and Abraxis Research will become the new Abraxis BioScience.
“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,” outlined Patrick Soon-Shiong, chairman and CEO of Abraxis BioScience, in a company release.
Following the separation of the businesses, each current shareholder will own one share of Abraxis Pharmaceutical Products, Inc., and one share of the new Abraxis BioScience, for each share previously held. 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 (Washington, DC) that that the separation will be tax-free to Abraxis BioScience and its shareholders, and other regulatory approvals.
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. 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. 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.
APP to focus on injectables
Following the separation, APP will be one of the largest standalone publicly traded companies focused on injectable pharmaceuticals, according to the company, and will have approximately 1,400 employees. APP expects to generate revenue growth in 2007 in the mid-teens over 2006 revenue of $583 million. The headquarters of APP will remain in Schaumburg, Illinois.
Soon-Shiong will remain as chairman and will serve as CEO of APP. 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 had 10 abbreviated new drug application (ANDA) approvals. From 2001 to 2006, APP had 55 ANDA approvals. It has 29 ANDAs pending with the US Food and Drug and Administration (Rockville, MD). and more than 60 product candidates in various stages of development, according to the company.
The new Abraxis BioScience
The key technology platform of the new Abraxis Bioscience is its “nab” (nanoparticle-albumin bound) technology platform. The technology is commercialized in a nab-based form of the anticancer therapy paclitaxel.
Abraxis Bioscience is developing other nab-based products, which include nab-docetaxel (ABI-008), mTOR inhibitor nab-rapamycin (ABI-009), and the HSP90 inhibitor nab-17AAG (ABI-010). The investigational new drug application (IND) for ABI-009 is the third investigational product based on the company’s nab technololgy. Abraxis anticipates filing two additional IND submissions over the next 12 to 18 months for ABI-010 and nab-thiocolchicine dimer (ABI-011).
Soon-Shiong, who will remain as chairman and CEO of the new Abraxis BioScience, envisions that the new Abraxis BioScience will be positioned in personalized medicine. “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,” he said in a company release.
The new Abraxis BioScience, as a standalone publicly traded company, will have its headquarters in Los Angeles, California, and will employ more than 500 people. 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.