Abraxis Bioscience 10Q 2010 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33657

Abraxis BioScience, Inc.

(Exact name of registrant as specified in its charter)


Delaware		30-0431735
(State of Incorporation)		(I.R.S. Employer Identification No.)

11755 Wilshire Boulevard, Suite 2000 Los Angeles, CA		90025
(Address of principal executive offices)		(Zip Code)

(310) 883-1300

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as determined by rule 12b-2 of the Exchange Act). Yes ¨ No x

As of April 30, 2010, the registrant had 40,386,809 shares of $0.001 par value common stock outstanding.

Abraxis BioScience, Inc.

INDEX


		Page

PART I. Financial Information

Item 1.	Financial Statements	3

	Condensed consolidated balance sheets – March 31, 2010 and December 31, 2009	3

	Condensed consolidated statements of operations – Three months ended March 31, 2010 and 2009	4

	Condensed consolidated statements of equity – Three months ended March 31, 2010	5

	Condensed consolidated statements of cash flows – Three months ended March 31, 2010 and 2009	6

	Notes to condensed consolidated financial statements – March 31, 2010	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	25

PART II. Other Information

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Reserved	34

Item 5.	Other Information	34

Item 6.	Exhibits	34

Signatures		35

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Abraxis BioScience, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share data)


	March 31, 2010			December 31, 2009
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	191,439		$	203,312
Accounts receivable, net of chargebacks of $1,348 in 2010 and $1,445 in 2009 and credit returns of $1,171 in 2010 and $1,026 in 2009		57,657			47,220
Related party receivable		—			51
Inventories		56,215			54,209
Prepaid expenses and other current assets		31,355			40,994
Deferred income taxes		25,510			25,510

Total current assets		362,176			371,296
Property, plant and equipment, net		247,423			236,798
Investments in unconsolidated entities		9,656			22,774
Intangible assets, net of accumulated amortization of $155,003 in 2010 and $144,908 in 2009		142,248			144,633
Goodwill		253,821			241,361
Other non-current assets		65,767			51,518

Total assets	$	1,081,091		$	1,068,380


Liabilities and equity
Current liabilities:
Accounts payable	$	22,115		$	28,577
Accrued liabilities		94,225			88,723
Accrued litigation costs		57,635			57,635
Related party payable		1,815			334
Income taxes payable		282			142
Deferred revenue		3,158			3,138

Total current liabilities		179,230			178,549
Deferred income taxes, non-current		31,765			29,507
Long-term portion of deferred revenue		4,082			4,867
Other non-current liabilities		14,983			9,192

Total liabilities		230,060			222,115
Equity
Stockholders’ equity:
Common stock—$0.001 par value; 100,000,000 shares authorized; 40,023,073 and 40,107,334 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively		40			40
Additional paid-in capital		1,216,951			1,213,707
Accumulated deficit		(378,808	)		(375,805	)
Accumulated other comprehensive income		3,227			5,011

Total stockholders’ equity		841,410			842,953
Noncontrolling interest		9,621			3,312

Total equity		851,031			846,265

Total liabilities and equity	$	1,081,091		$	1,068,380

See notes to condensed consolidated financial statements.

Abraxis BioScience, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)


	Three Months Ended March 31,
	2010			2009
	(unaudited)
Abraxane revenue	$	87,947		$	70,093
Other product revenue		18,767			525
Other revenue		4,116			1,964

Net revenue		110,830			72,582
Cost of sales		22,630			9,127

Gross profit		88,200			63,455
Operating expenses:
Research and development		33,446			32,331
Selling, general and administrative		50,413			45,149
Amortization of intangible assets		10,088			9,950

Total operating expenses		93,947			87,430

Loss from operations		(5,747	)		(23,975	)
Equity in net (loss) income of unconsolidated entities		(1,009	)		1,031
Interest income		565			1,146
Other income (expense)		2,687			(1,440	)

Loss before income taxes		(3,504	)		(23,238	)
(Benefit) provision for income taxes		(239	)		63

Net loss	$	(3,265	)	$	(23,301	)

Net loss attributable to noncontrolling interest		(262	)		(380	)

Net loss attributable to common shareholders	$	(3,003	)	$	(22,921	)

Basic and diluted net loss per common share	$	(0.07	)	$	(0.57	)


Stock-based compensation is included above in the following classification:
Cost of sales	$	104		$	103
Research and development		185			1,192
Selling, general and administrative		1,391			3,119

	$	1,680		$	4,414

See notes to condensed consolidated financial statements.

Abraxis BioScience, Inc.

Condensed Consolidated Statements of Equity

Three Months Ended March 31, 2010

(in thousands)


	Stockholders’ Equity
	Common Stock									Accumulated Other
	Shares	Amount		Additional Paid-In Capital			Accumulated Deficit			Comprehensive Income (Loss)			Non-controlling Interest			Total Equity
	(unaudited)
Balance at December 31, 2009	40,107	$	40	$	1,213,707		$	(375,805	)	$	5,011		$	3,312		$	846,265
Exercise of stock options	169		—		1,398			—			—			—			1,398
Net settlement of vested restricted stocks	47		—		(1,230	)		—			—			—			(1,230	)
Equity-based compensation	—		—		3,076			—			—			—			3,076
Noncontrolling interest related to business combination	—		—		—			—			—			6,875			6,875
Other	—		—		—			—			—			(304	)		(304	)
Comprehensive loss:
Net loss	—		—		—			(3,003	)		—			(262	)		(3,265	)
Unrealized gain on available-for-sale securities	—		—		—			—			(1,301	)		—			(1,301	)
Foreign currency translation adjustments	—		—		—			—			(483	)		—			(483	)

Comprehensive loss	—		—		—			—			—			—			(5,049	)

Balance at March 31, 2010	40,323	$	40	$	1,216,951		$	(378,808	)	$	3,227		$	9,621		$	851,031

See notes to condensed consolidated financial statements.

Abraxis BioScience, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)


	Three Months Ended March 31,
	2010			2009
	(unaudited)
Cash flows from operating activities:
Net loss	$	(3,265	)	$	(23,301	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		14,788			13,835
Amortization of deferred revenue		(765	)		(1,412	)
Other than temporary loss on marketable securities		—			2,944
Gain on derivatives		(320	)		(436	)
Equity-based compensation		1,680			4,414
Deferred income taxes		4			638
Equity in net loss (income) of unconsolidated entities		1,009			(1,031	)
Gain on sale of marketable securities		—			(792	)
Gain on sale of subsidiary		—			(2,667	)
Gain related to DSC equity investment		(1,773	)		—
Loss on disposal of property, plant and equipment		290			—
Changes in operating assets and liabilities:
Accounts receivable, net		(4,005	)		(1,542	)
Cash collateral for reacquisition of agreement		—			300,631
Related party, net		289			(199	)
Inventories		(1,952	)		4,138
Prepaid expenses and other current assets		13,335			2,111
Accounts payable and accrued expenses		(7,699	)		(20,414	)
Reacquisition payable		—			(268,000	)
Other non-current assets and liabilities		(5,893	)		450

Net cash provided by operating activities		5,723			9,367

Cash flows from investing activities:
Purchases of property, plant and equipment		(15,331	)		(18,963	)
Cash from consolidation of Drug Source Company		15,099			—
Cash paid for acquisition		(5,754	)		—
Purchases of investments and marketable securities		(3,000	)		—
Investment in notes receivable		(10,000	)		—
Proceeds from sale of subsidiary		—			2,046
Proceeds from sale of marketable securities		—			3,676

Net cash used in investing activities		(18,986	)		(13,241	)

Cash flows from financing activities:
Proceeds from the exercise of stock options		1,398			269

Net cash provided by financing activities		1,398			269
Effect of exchange rates on cash and cash equivalents		(8	)		13

Net decrease in cash and cash equivalents		(11,873	)		(3,592	)
Cash and cash equivalents, beginning of period		203,312			306,390

Cash and cash equivalents, end of period	$	191,439		$	302,798

See notes to condensed consolidated financial statements.

ABRAXIS BIOSCIENCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2010

(Unaudited)

(1) Summary of Significant Accounting Policies

Basis of Presentation

Abraxis BioScience, Inc. is a Delaware corporation that was formed in June 2007. We are a biotechnology company, with a proprietary marketed product (Abraxane^®), global ownership of our proprietary technology platform and clinical pipeline, and dedicated nanoparticle manufacturing capabilities for worldwide supply integrated with seasoned in-house capabilities, including discovery, clinical drug development, regulatory and sales and marketing.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information and notes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010 or other future periods. The balance sheet information at December 31, 2009 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements.

Basis of Consolidation

The accompanying condensed consolidated financial statements reflect the consolidated operations of Abraxis BioScience, Inc. and its subsidiaries. The condensed consolidated financial statements include the assets, liabilities and results of operations of our wholly-owned and majority-owned operating subsidiaries and variable interest entities for which we are the primary beneficiary. Equity investments in which we have the ability to exercise significant influence over the entities but do not control are accounted for using the equity method. All material intercompany balances and transactions were eliminated in consolidation.

For variable interest entities, we assess the terms of our interest in the entity to determine if we are the primary beneficiary. The primary beneficiary of a variable interest entity (VIE) is the party that has a controlling financial interest in the VIE and has (1) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb the VIE’s losses or the right to receive benefits from the VIE, that could potentially be significant to the VIE. Variable interests are ownership, contractual or other pecuniary interests in an entity that change with changes in the fair value of the entity’s net assets excluding variable interests. We have a variable interest in one VIE, DiThera, Inc., and because we are the primary beneficiary, the VIE is consolidated in our financial statements.

Reclassification

Certain prior year amounts have been reclassified to conform to current year presentations. The reclassifications did not impact net income or total stockholders’ equity.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates may also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

It is our policy to include cash and investments having maturities of three months or less at the time of acquisition in cash and cash equivalents.

Fair Value Measurement

Our assets and liabilities are measured at fair value on a recurring basis in accordance with the provisions for fair value measurement and disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

Investments

We review quarterly our available-for-sale securities and cost method investments for other than temporary declines in fair value and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. This review includes an analysis of the facts and circumstances of each individual investment such as the severity of loss, the length of time the fair value has been below cost, the expectation for that security’s performance and the creditworthiness of the issuer. For the three months ended March 31, 2010, we did not have any other than temporary losses. For the three months ended March 31, 2009, we recognized other than temporary losses of $2.9 million on available-for-sale securities whose values, based on market quotation, had declined significantly below their carrying value. The loss is included in “Other income and expense” in the condensed consolidated statements of operations.

Subsequent Events

We have evaluated subsequent events through the date of issuance of our financial statements in this Form 10-Q.

Recent Accounting Pronouncements

In June 2009, the FASB issued a new accounting standard which amends guidance regarding consolidation of variable interest entities to address the elimination of the concept of a qualifying special purpose entity (the “QSPE”). This standard also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of the variable interest entity, and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, the standard requires any enterprise that holds a variable interest in a variable interest entity to provide enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. This standard is effective for us beginning on January 1, 2010. Adoption of this standard did not have a material impact on our consolidated financial statements.

In October 2009, the FASB issued a new accounting standard which amends guidance on accounting for revenue arrangements involving the delivery of more than one element of goods and/or services. The standard amends the criteria for separating consideration in multiple-deliverable arrangements and establishes a selling price hierarchy for determining the selling price of a deliverable. The amendments will eliminate the residual method of allocation and require that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. The standard also significantly expands the disclosures related to a vendor’s multiple-deliverable arrangement. The standard is effective on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Alternatively, adoption may be on a retrospective basis, and early application is permitted. We are evaluating the impact of this standard on our consolidated financial statements.

In April 2010, the FASB issued new accounting guidance to provide clarification on the classification of a share-based payment award as either equity or a liability. Under ASC 718,Compensation-Stock Compensation, a share-based payment award that contains a condition that is not a market, performance, or service condition is required to be classified as a liability. The amendments clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, such an award should not be classified as a liability if it otherwise qualifies as equity. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. Earlier application is permitted. Adoption of this standard is not expected to have a material impact on our consolidated financial statements.

In May 2010, the FASB issued new guidance on the use of the milestone method of recognizing revenue for research and development arrangements under which consideration to be received by the vendor is contingent upon the achievement of certain milestones. The update provides guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. A vendor can recognize consideration in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. Additional disclosures describing the consideration arrangement and the entity’s accounting policy for recognition of such milestone payments are also required. The new guidance is effective for fiscal years, and interim periods within such fiscal years, beginning on or after June 15, 2010, with early adoption permitted. The guidance may be applied prospectively to milestones achieved during the period of adoption or retrospectively for all prior periods. We are evaluating the impact of this standard on our consolidated financial statements.

(2) Earnings Per Share Information

Basic loss per common share is computed by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the reporting period. Diluted loss per common share is computed by dividing net loss attributable to common shareholders by the weighted-average number of common shares used for the basic calculations plus the weighted average dilutive shares, unless the impact of including the dilutive shares are anti-dilutive. Net loss per share for basic and dilutive shares was the same since we had a net loss for the three months ended March 31, 2010 and 2009. Calculations of basic and diluted loss per common share information are based on the following:


	Three Months Ended March 31,
	2010			2009
	(unaudited, in thousands, except per share data)
Basic and dilutive numerator:
Net loss attributable to common shareholders	$	(3,003	)	$	(22,921	)

Denominator:
Weighted average common shares outstanding—basic		40,181			40,081
Net effect of weighted average dilutive stock options and restricted stock awards		—			—

Weighted average common shares outstanding—diluted		40,181			40,081

Net loss per common share—basic	$	(0.07	)	$	(0.57	)

Net loss per common share—diluted	$	(0.07	)	$	(0.57	)

Potentially dilutive shares not included		189			271

(3) Acquisitions

Acquisition of Diagnostic Company

In January 2010, we acquired a 100% ownership interest in a U.S.-based diagnostics company for a total purchase price of $5.8 million, including the assumption of certain liabilities and future contingent payments. In accordance with FASB ASC 805Business Combinations, the acquisition was accounted for as a business combination and the assets, liabilities and results of operations of the acquired company were consolidated in our financial statements from the date of acquisition.

The following table summarizes the allocation of the purchase price to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values at the date of acquisition (in thousands):


Current assets (net of cash acquired)	$	96
Property, plant and equipment		34
Intangible assets		5,570
Goodwill		10,346
Current liabilities		(377	)
Deferred tax liability		(2,248	)
Other long-term liabilities		(7,660	)

Total purchase price	$	5,761

The fair value of the acquired company at the time of the acquisition was estimated at $5.8 million. As the acquired entity is a private company, the fair value was based on significant inputs that are not observable in the market and thus represents a Level 3 measurement as defined in FASB ASC 820,Fair Value Measurements and Disclosures.

The following table summarizes the fair values allocated to the intangible assets at the date of acquisition:


	Weighted- average Remaining Life
	Weighted- average Remaining Life	Gross Carrying Amount		Accumulated Amortization		Net Book Value
		(unaudited, in thousands)
Technology	9.8 yrs	$	5,340	$	89	$	5,251
Other	0.8 yrs		230		38		192

Total		$	5,570	$	127	$	5,443

The intangibles assets are all definite-lived intangibles and have weighted average lives of approximately 9.5 years.

The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $10.3 million. Goodwill is not deductible for income tax purposes.

We also recorded $7.7 million in other long-term liabilities as the estimated fair value of our contingent consideration arrangement. The contingent consideration arrangement requires us to pay between $3.0 million to $10.5 million to the former shareholders dependent upon the net revenues earned at each threshold. In determining the fair value of the contingent consideration, we considered the projected revenues of the acquired company and the estimated probability of achieving each revenue threshold. A discount rate of 5% was used to calculate the present value of the estimated contingent payments based on the overall assessed risk associated with the contingent payments.

Acquisition of Controlling Interest in DSC

In March 2010, Drug Source Company, LLC (DSC) acquired one of its member’s partnership interest thereby increasing our ownership interest in DSC from 50% to 67%. Prior to the business combination, we accounted for our investment in DSC under the equity method. The acquisition date fair value of our previous 50% equity interest was estimated to be $12.2 million. In accordance with FASB ASC 805Business Combinations, we recognized a gain of $1.8 million as a result of the re-measuring to fair value our equity interest in DSC prior to the business combination. The gain is recorded in other income in our consolidated statements of operations.

As we now have a controlling interest in DSC, the assets, liabilities and results of operations of DSC are consolidated in our financial statements from the date of acquisition. The following table summarizes the fair values of the assets and liabilities recorded on the date after the business combination (in thousands):


Cash and cash equivalents	$	15,099
Accounts receivable		6,337
Other current assets		2,595
Property, plant and equipment		273
Intangible assets		2,080
Goodwill		2,114
Other current assets		123

Total assets	$	28,621

Current liabilities	$	7,789
Non-controlling interest		6,875
Abraxis’investment in Drug Source Company, LLC		13,957

Total liabilities and equity	$	28,621

Pursuant to the business combination, goodwill of $2.1 million was recognized. Goodwill is not deductible for income tax purposes. We also recorded intangible assets of $2.1 million comprising primarily of customer and supplier relationships. The intangible assets are all definite-lived intangibles and have weighted average lives of approximately 9.9 years.

The fair value of the 33% noncontrolling interest was recorded at $6.9 million and reflects the estimated fair values of the assets and liabilities of DSC at the date of acquisition. As DSC is a private company, the fair value was based on significant inputs that are not observable in the market and thus represents a Level 3 measurement as defined in FASB ASC 820,Fair Value Measurements and Disclosures.

The amounts of revenue and earnings of DSC included in our consolidated statements of operations from the acquisition date to the period ending March 31, 2010 were as follows (unaudited, in thousands):


Net revenue	$	5,461
Net income attributable to Abraxis BioScience, Inc.		325

Supplemental Pro Forma Data

The following represents pro forma results as if DSC had been included in our consolidated statements of operations for the entire three months ended March 31, 2010 and March 31, 2009:


	Three Months Ended March 31,
	2010			2009
	(unaudited, in thousands)
Pro forma financial results:
Net revenue	$	114,548		$	109,813
Net loss attributable to Abraxis BioScience, Inc.		(3,129	)		(22,611	)

Adjustments have been made for additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied as of January 1, 2009, together with the consequential tax effects. The pro forma information is not necessarily indicative of the results that would have been achieved if the acquisitions had been effective on January 1, 2009.

(4) Inventories

Inventories are valued at the lower of cost or market as determined under the first-in, first-out, or FIFO, method, as follows:


	March 31, 2010		December 31, 2009
	(unaudited)
	(in thousands)
Finished goods	$	11,177	$	3,908
Work in process		13,273		18,235
Raw materials		31,765		32,066

	$	56,215	$	54,209

Inventories consist of products currently approved for marketing and may, from time to time, include certain products pending regulatory approval. Occasionally, we capitalize inventory costs associated with products prior to regulatory approval based on our judgment of probable future commercial success and realizable value. Such judgment incorporates our knowledge and best judgment of where the product is in the regulatory review process, our required investment in the product, market conditions, competing products and our economic expectations for the product post-approval relative to the risk of manufacturing the product prior to approval. In evaluating the market value of inventory pending regulatory approval as compared to its cost, we consider the market, pricing and demand for competing products, anticipated selling price for the product and the position of the product in the regulatory review process. If final regulatory approval for such products is denied or delayed, we may need to provide for and expense such inventory. No inventory held at March 31, 2010 or December 31, 2009 was pending regulatory approval.

We routinely review our inventory and establish reserves when the cost of the inventory is not expected to be recovered or its product cost exceeds realizable market value. In instances where inventory is at or approaching expiry, is not expected to be saleable based on quality and control standards or for which the selling price has fallen below cost, we reserve for any inventory impairment based on the specific facts and circumstances. Provisions for inventory reserves are reflected in the financial statements as an element of cost of sales with inventories presented net of related reserves.

(5) Fair Value

Fair value measurement

In accordance with FASB ASC 820,Fair Value Measurements and Disclosures, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:


Level 1	–	Valuations based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2	–	Valuations based on quoted prices in markets that are not active, or financial instruments for which all significant inputs are observable; either directly or indirectly; and

Level 3	–	Valuations based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable, thus, reflecting assumptions about the market participants.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following fair value hierarchy tables present information about each major class of our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2010 and December 31, 2009. All of the investments below reflect strategic investments.


	Basis of fair value measurements
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Balance as of March 31, 2010
	(unaudited, in thousands)
Marketable equity securities	$	8,602	$	—	$	—	$	8,602
Marketable debt securities		—		—		17,035		17,035
Warrants and options		—		4,610		—		4,610

Total assets at fair value	$	8,602	$	4,610	$	17,035	$	30,247

Contingent consideration	$	—	$	—	$	7,660	$	7,660

Total liabilities at fair value	$	—	$	—	$	7,660	$	7,660


	Basis of fair value measurements
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Balance as of December 31, 2009
	(in thousands)
Marketable equity securities	$	6,902	$	—	$	—	$	6,902
Marketable debt securities		—		—		16,977		16,977
Warrants and options		—		4,289		—		4,289

Total assets at fair value	$	6,902	$	4,289	$	16,977	$	28,168

Warrants and options are measured at fair value at each reporting period using market prices and the change in market value is recognized as realized gains or losses and recorded in other income (expense).

Level 3 assets consist of interest bearing convertible notes with maturity dates in 2011, 2015 and 2018. There is limited market activity for these convertible notes such that the determination of fair value requires significant judgment or estimation. The convertible notes are initially measured at acquisition cost and subsequently valued by considering, among other items, assumptions that market participants would use in their estimates of fair value, such as the collateral underlying the security, the inability to sell the investment in an active market, the creditworthiness of the issuer, and, the timing of expected future cash flows.

As of March 31, 2010, we reported $7.7 million as the fair value of the contingent consideration pursuant to our acquisition of a U.S.-based diagnostics company (See Note 3 – Acquisitions). The contingent consideration is classified as a Level 3 liability.

We also review quarterly our cost method investment for other than temporary declines in fair value. Since the fair value of a cost method investment is not readily determinable, we assess for potential impairment when an event or change in circumstances has occurred in the period that may have a significant adverse effect on the fair value of the investment. The carrying amount of our cost method investment was $3.1 million as of March 31, 2010 and December 31, 2009.

Assets Measured at Fair Value on a Nonrecurring Basis

We evaluate our long-lived assets and goodwill for potential impairment under the provisions of FASB ASC 360Property, Plant and Equipment and ASC 350Intangibles-Goodwill and Other, respectively, when changes in events and circumstances indicate that the assets might be impaired. There were no re-measurements to fair value for the three months ended March 31, 2010.

Fair value of other financial instruments

Other financial instruments consist mainly of cash and cash equivalents, accounts receivable and accounts payable. Cash equivalents include investments with maturities of three months or less at the time of acquisition. At March 31, 2010 and December 31, 2009, the carrying amounts of items comprising current assets and current liabilities approximate fair value due to the short-term nature of these financial instruments. Additionally in February 2010, we entered into a notes receivable agreement for $10 million. The note bears interest at 5% annually and is payable in five equal annual installments beginning in February 2011. We accounted for the notes receivable as a cost basis investment.

(6) Marketable Securities

The following tables summarize our marketable securities by category as of March 31, 2010 and December 31, 2009:


	March 31, 2010
	(unaudited, in thousands)
	Adjusted Cost		Gross Unrealized Gains		Fair Value
Marketable equity securities	$	5,404	$	3,198	$	8,602
Marketable debt securities		14,089		2,946		17,035

	December 31, 2009
	(in thousands)
	Adjusted Cost		Gross Unrealized Gains		Fair Value
Marketable equity securities	$	2,404	$	4,498	$	6,902
Marketable debt securities		14,031		2,946		16,977

Gains or losses on marketable equity and debt securities considered to be temporary are included in accumulated other comprehensive income at each measurement date. We had net unrealized gains of $1.3 million and $2.5 million on marketable equity securities for the three months ended March 31, 2010 and 2009, respectively.

For the three months ended March 31, 2010, we did not have any other than temporary losses. For the three months ended March 31, 2009, we recognized other than temporary losses of $2.9 million on available-for-sale securities. Other than temporary losses are included in other income and expense in the statements of operations. Additionally, for the three months ended March 31, 2009, we had gross realized gains of $0.7 million on proceeds of $3.7 million from the sale of marketable securities.

(7) Related Party Transactions

Related party transactions at March 31, 2010 consisted of $1.8 million in payables to APP Pharmaceuticals, Inc. (APP). At December 31, 2009, we had receivables of $0.1 million from Drug Source Company and $0.3 million in payables to APP.

Transactions with APP Pharmaceuticals

In connection with the separation of APP and us on November 13, 2007, we entered into a number of agreements that govern the relationship between APP and us for a period of time after the separation. The agreements were entered into while we were still a wholly owned subsidiary of Old Abraxis. These agreements include (i) a tax allocation agreement, (ii) an employee matters agreement, (iii) a transition services agreement, (iv) a manufacturing agreement and (v) various real estate leases. Transactions relating to these agreements recorded in our condensed consolidated statements of operations are summarized in the following table:


	Three Months Ended March 31,
	2010		2009
	(unaudited, in thousands)
Other revenue:
Net rental income	$	647	$	769
Cost of sales:
Manufacturing and distribution costs		588		300
Facility management fees		750		500
Selling, general and administrative
Net general and administrative costs		124		363

Tax Allocation Agreement

The tax allocation agreement allocates the liability for taxes prior to the 2007 separation of APP and us. Under the tax allocation agreement, APP is responsible for and has agreed to indemnify us against all tax liabilities to the extent they relate to APP’s hospital-based business, and we are responsible for and have agreed to indemnify APP against all tax liabilities to the extent they relate to our proprietary products business. The tax allocation agreement also provides the extent to which, and the circumstances under which, the parties would be liable if the distribution were not to constitute a tax-free distribution under Section 355 and Section 368(a)(1)(D) of the Internal Revenue Code. In general, we are required to indemnify APP for any taxes resulting from a failure of the distribution to so qualify, unless such failures results solely from APP’s specified acts. In April 2010, APP received a notification from the internal revenue service in connection with their review of Old Abraxis’ 2006 tax treatment of the timing of recognition of consideration received in a licensing transaction related to our business. We estimate that our maximum liability to APP under the tax allocation agreement from this review is approximately $7 million. However, we believe the tax position taken by Old Abraxis was appropriate and will be upheld. Accordingly, we have not taken any accrual for this potential contingency.

(8) Accrued Liabilities

Accrued liabilities consisted of the following at:


	March 31, 2010		December 31, 2009
	(unaudited)
	(in thousands)
Sales and marketing	$	3,190	$	5,226
Marketing rebates		6,375		9,513
Payroll and employee benefits		25,155		23,660
Legal		35,359		30,491
Liability award plan		6,692		7,986
Other		17,454		11,847

	$	94,225	$	88,723

(9) Stock-Based Compensation

We had outstanding restricted stock unit awards which were accounted for as liability awards and as such, were required to be marked to fair value each reporting period. In connection with the final settlement of these liability awards, we recorded adjustments to reflect the vesting date fair value of the awards which resulted in reductions of $0.9 million and $2.2 million in selling, general and administrative expense and research and development expense, respectively, for the three months ended March 31, 2010.

(10) Income Taxes

Our effective tax rate for the three months ended March 31, 2010 was approximately 6.8% resulting in a benefit for income taxes. The effective tax rate differs from the statutory rate primarily as the result of the application of a valuation allowance against the net income tax benefit for the year

We recognize interest and penalties related to unrecognized tax benefits in our income tax expense. At March 31, 2010, we had $0.7 million of accrued interest. We do not have any returns currently subject to examination by tax authorities or any open audits.

(11) Comprehensive (Loss) Income

Elements of comprehensive (loss) income, net of income taxes, were as follows:


	Three Months Ended March 31,
	2010			2009
	(unaudited, in thousands)
Foreign currency translation adjustments	$	(483	)	$	(2,025	)
Unrealized (loss) gain on marketable equity securities		(1,301	)		2,094

Other comprehensive (loss) income		(1,784	)		69
Net loss		(3,265	)		(23,301	)

Comprehensive loss	$	(5,049	)	$	(23,232	)

Comprehensive loss attributable to noncontrolling interest	$	(262	)	$	(380	)

Comprehensive loss attributable to common shareholders	$	(4,787	)	$	(22,852	)

At March 31, 2010 and 2009, we had cumulative foreign currency translation loss adjustments of $0.1 million and $0.7 million, respectively. In addition, at March 31, 2010 and 2009, we had cumulative unrealized gains of $3.3 million and losses of $0.2 million, respectively, on marketable securities.

(12) Proposed Spin-off

In January 2009, we announced that our board of directors approved a plan to spin-off a newly-formed subsidiary Abraxis Health, Inc. as a new independent, stand-alone company holding our drug discovery, pilot manufacturing and development business. We currently anticipate the spin-off will be completed in 2010. If the spin-off occurs, our stockholders would own (i) shares of Abraxis Health and (ii) shares of our common stock, and we would continue to operate our existing business, excluding the drug discovery, pilot manufacturing and development business to be held by Abraxis Health. In connection with the proposed spin-off, Abraxis Health would enter into several agreements with us related to, among other things, manufacturing, transition services, tax allocations and a number of ongoing commercial relationships.

The proposed spin-off is subject to, among other things, final approval by our board of directors and the effectiveness of the registration statement registering the common stock of Abraxis Health to be distributed to our stockholders in connection with the spin-off. Our board of directors, in its sole discretion and for any reason or no reason at all, may amend, modify or abandon the proposed spin-off without liability at any time prior to the time the spin-off is completed. Approval by our stockholders is not required as a condition to the consummation of the proposed spin-off. In connection with the proposed spin-off, Abraxis Health filed a registration statement on Form 10 with the SEC on August 4, 2009, that was withdrawn on August 12, 2009. Abraxis Health plans to file a new Form 10 registration statement, and stockholders are urged to read it, including any amendments or supplements thereto, carefully when available because it will contain important information about the proposed spin-off.

(13) Contingencies

Certain legal proceedings in which we are involved are discussed in Note 13 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009. There have been no material developments to the legal proceedings discussed in our 2009 Annual Report.

We record accruals for contingencies to the extent that we conclude their occurrence is probable and the related damages are estimable. These assessments involve complex judgments about future events and rely on estimates and assumptions. Although we believe we have substantial defenses in these matters, litigation is inherently unpredictable and we could in the future incur judgments or enter into settlements that could have a material adverse effect on our results of operations.

We are from time to time subject to claims and litigation arising in the ordinary course of business. We intend to defend vigorously any such litigation that may arise under all defenses that would be available to us. In the opinion of management, the ultimate outcome of proceedings of which management is aware, even if adverse to us, would not have a material adverse effect on our consolidated financial position or results of operations.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q and other materials filed or to be filed by us with the Securities and Exchange Commission, or the SEC, as well as information included in oral statements or other written statements made or to be made by us, contain forward-looking statements within the meaning of federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the federal securities laws. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections about our industry, our beliefs and assumptions. These risks and uncertainties include those described in “Part II, Other Information,Item 1A. Risk Factors“ and elsewhere in this Quarterly Report on Form 10-Q. Forward-looking statements, whether express or implied, are not guarantees of future performance and are subject to risks and uncertainties, which can cause actual results to differ materially from those currently anticipated, due to a number of factors, which include, but are not limited to:

•

the amount and timing of costs associated with the continuing launch of Abraxane^® in Europe and abroad;

•

our ability to maintain and/or improve sales and earnings performance;

•

the actual results achieved in further clinical trials of Abraxane^® may or may not be consistent with the results achieved to date;

•

the market adoption of any new pharmaceutical products;

•

the difficulty in predicting the timing or outcome of product development efforts and regulatory approvals;

•

our ability and that of our suppliers to comply with laws, regulations and standards, and the application and interpretation of those laws, regulations and standards, that govern or affect the pharmaceutical industry, the non-compliance with which may delay or prevent the sale of their products;

•

the availability and price of acceptable raw materials and components from third-party suppliers;

•

any adverse outcome in litigation;

•

general economic, political and business conditions that adversely affect our company or our suppliers, distributors or customers;

•

changes in costs, including changes in labor costs, raw material prices or advertising and marketing expenses;

•

inventory reductions or fluctuations in buying patterns by wholesalers or distributors;

•

the impact on our products and revenues of patents and other proprietary rights licensed or owned by us, our competitors and other third parties;

•

the ability to successfully manufacture our products in an efficient, time-sensitive and cost effective manner, including the impact of product recalls and other manufacturing issues;

•

the impact of recent legislative changes to the governmental reimbursement system; and

•

risks inherent in acquisitions, divestitures and spin-offs, including the capital resources required for acquisitions, business risks, legal risks and risks associated with the tax and accounting treatment of such transactions.

Forward-looking statements also include the assumptions underlying or relating to any of the foregoing or other such statements. When used in this report, the words “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict” and similar expressions are generally intended to identify forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, whether as a result of new information, changes in assumptions, future events or otherwise. Readers should carefully review the factors described in“Item 1A: Risk Factors” of Part II of this Quarterly Report on Form 10-Q and other documents we file from time to time with the Securities and Exchange Commission. Readers should understand that it is not possible to predict or identify all such factors. Consequently, readers should not consider any such list to be a complete set of all potential risks or uncertainties.

OVERVIEW

The following management’s discussion and analysis of financial condition and results of operations, or MD&A, is intended to assist the reader in understanding our company. The MD&A is provided as a supplement to, and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2009, including “Item 1: Business”; “Item 1A: Risk Factors“; “Item 6: Selected Financial Data”; and “Item 8: Financial Statements and Supplementary Data.”

Background

We are one of the few fully integrated global biotechnology companies, with a breakthrough marketed product (Abraxane^®), global ownership of our proprietary technology platform and clinical pipeline, and dedicated nanoparticle manufacturing capabilities for worldwide supply integrated with seasoned in-house capabilities, including discovery, clinical drug development, regulatory and sales and marketing.

We are dedicated to the discovery, development and delivery of next-generation therapeutics and core technologies that offer patients safer and more effective treatments for cancer and other critical illnesses. Our portfolio includes the world’s first and only protein-based nanometer-sized chemotherapeutic compound (Abraxane^®) which is based on our proprietary tumor targeting technology known as thenab^® technology platform. Thisnab^® 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. Abraxane^® is the first clinical and commercial validation of ournab^® technology platform. From the discovery and research phase to development and commercialization, we are committed to rapidly enhancing our product pipeline and accelerating the delivery of breakthrough therapies that will transform the lives of patients who need them.

We own the worldwide rights to Abraxane^®, a next generation, nanometer-sized, solvent-free taxane that was approved by the U.S. Food and Drug Administration, or the FDA, in January 2005 for its initial indication in the treatment of metastatic breast cancer and launched in February 2005. We believe the successful launch of Abraxane^® validates ournab^® tumor targeting technology, a novel biologically interactive (receptor-mediated) system to deliver chemotherapeutic agents.

We are currently developing a raw material supply business, including active pharmaceutical ingredients, for biological and biosimilar applications. Ultimately, these raw materials may be used in our product candidates and/or sold to third parties. At various times, we may pursue revenue opportunities from sales of our raw materials, but we cannot assure any such opportunities will materialize to any meaningful degree or at all.

Health Care Reform

In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the Acts). The Acts contain broad provisions that will be implemented over the next several years. We are currently evaluating the impact of the Acts on our business; however, our evaluation is dependent upon the issuance of final regulations and the Acts’ impact on insurance companies and their relationships with drug manufacturers. Based on our initial and ongoing evaluation of the Acts, we do not believe that the Acts will have a material impact on our business in 2010. Potential impacts of the Acts on our business beyond 2010 are inherently difficult to predict, but thus far we have not identified any provisions that we believe will have a material impact on our business going forward.

Effective January 1, 2010, the Acts require an increase in the Medicaid rebate rate for certain pharmaceutical products from 15.1 percent to 23.1 percent. This increase will apply to rebates for Abraxane^®. Over the last year, less than 10 percent of the prescriptions for our drugs have been reimbursed by Medicaid. Based on a historical review of our Medicaid rebates, we believe that the increase in the Medicaid rebate will decrease our net revenues by less than one percent in 2010.

Proposed 2010 Spin-Off

RESULTS OF OPERATIONS

Three Months Ended March 31, 2010 and March 31, 2009

The following table sets forth the results of our operations for the three months ended March 31, 2010 and 2009, and forms the basis for the following discussion of our operating activities:


	Three Months Ended March 31,						Change Favorable (Unfavorable) 2010 vs. 2009
	2010			2009			$			%
	(unaudited, in thousands, except per share data)
Consolidated statements of operations data:
Revenue:
Abraxane	$	87,947		$	70,093		$	17,854		25	%
Other products		18,767			525			18,242		3475	%
Other		4,116			1,964			2,152		110	%

Net revenue		110,830			72,582			38,248		53	%
Cost of sales		22,630			9,127			(13,503	)	(148	)%

Gross profit		88,200			63,455			24,745		39	%
Operating expenses:
Research and development		33,446			32,331			(1,115	)	(3	)%
Selling, general and administrative		50,413			45,149			(5,264	)	(12	)%
Amortization of intangible assets		10,088			9,950			(138	)	(1	)%

Total operating expenses		93,947			87,430			(6,517	)	(7	)%

Loss from operations		(5,747	)		(23,975	)		18,228		76	%
Equity in net (loss) income from unconsolidated entities		(1,009	)		1,031			(2,040	)	(198	)%
Interest income		565			1,146			(581	)	(51	)%
Other income (expense)		2,687			(1,440	)		4,127		287	%

Loss before income taxes		(3,504	)		(23,238	)		19,734		85	%
(Benefit) provision for income taxes		(239	)		63			302		479	%

Net loss	$	(3,265	)	$	(23,301	)	$	20,036		86	%

Net loss attributable to non controlling interest		(262	)		(380	)		118		31	%

Net loss attributable to controlling interest	$	(3,003	)	$	(22,921	)	$	19,918		87	%

Basic and diluted net loss per common share	$	(0.07	)	$	(0.57	)
Weighted-average common shares outstanding:
Basic		40,181			40,081
Diluted		40,181			40,081

Net Revenue

Net revenue for the three months ended March 31, 2010 increased by $38.2 million, or 53%, to $110.8 million as compared to $72.6 million for the same period in 2009.

Abraxane revenue for the three months ended March 31, 2010 increased $17.8 million, or 25%, to $87.9 million as compared to $70.1 million for the same period in 2009. The increase was driven primarily by higher sales volumes in the United States and increased net selling prices associated with the global expansion.

Other product revenue consisting of raw material product sales, sales from our consolidation of Drug Source Company, LLC (DSC) and contract manufacturing was $18.8 million for the three months ended March 31, 2010, compared to $0.5 million for the same period in 2009. We did not have raw material product sales and consolidated sales from DSC for the three months ended March 31, 2009.

Other revenue for the three months ended March 31, 2010 increased by $2.1 million, or 110%, to $4.1 million compared to $2.0 million for the same period in 2009 primarily due to receipt of a milestone payment.

Gross Profit

Gross profit for the three months ended March 31, 2010 was $88.2 million, or 80% of net revenue, as compared to $63.5 million, or 87% of net revenue, for the same period in 2009. While gross profit increased due to higher sales volumes in the United States and increased net selling prices globally, the decrease in gross margin as a percentage of net revenue was caused primarily by higher volume sales of lower margin raw material products and lower gross margins from our consolidation of DSC sales.

Research and Development

Our research and development expenses are comprised primarily of costs related to our drug discovery efforts, drug development efforts, clinical trials and other research and development activities. We do not track total research and development expenses separately for each of our product development programs. Drug discovery and drug development expenses mostly include personnel expense, lab supplies, non-refundable upfront payments, consulting fees, occupancy costs and other third-party costs.

The scope and magnitude of our future research and development expenses are difficult to predict at this time given the number of studies that will need to be conducted for any of our potential product candidates. In general, biotechnology product development involves a series of steps. The process begins with discovery and preclinical research leading up to the submission of an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA), which allows for the initiation of the clinical evaluation of a potential drug candidate in humans. Clinical trials are typically comprised of three phases of study: Phase 1, Phase 2 and Phase 3. Generally, the majority of a drug candidate’s total development costs are incurred during Phase 3, which consists of trials that are typically both the longest and largest conducted during the drug development process. The length of time to complete clinical trials may take as many as seven to ten years. However, the length of time may vary substantially according to factors relating to the particular clinical trial, such as the type and intended use of the drug candidate, the clinical trial design and the ability to enroll suitable patients.

The estimation of completion dates or costs to complete our research and development projects would be highly speculative and subjective due to the numerous risks and uncertainties associated with developing biotechnology products. These risks could include (i) significant changing government regulation, (ii) the uncertainty of future preclinical and clinical study results, (iii) uncertainties associated with developing biotechnology products and (iv) uncertainties associated with process development and manufacturing. Our research and development expenses can vary from period to period given the rate at which clinical trial materials are acquired and utilized and the rate at which we are successful in enrolling suitable patients. The following table summarizes our research and development expenses for the three months ended March 31, 2010 and 2009:


	Three Months Ended March 31,
	2010		2009
	(unaudited, in thousands)
Discovery	$	4,449	$	4,485
Drug development		9,215		8,666
Clinical trials		9,716		11,787
Other research and development		10,066		7,393

	$	33,446	$	32,331

Research and development expense for the three months ended March 31, 2010 increased $1.1 million, or 3%, to $33.4 million as compared to $32.3 million for the same period in 2009. The increase was primarily due to a milestone payment, additional spending on Phase III clinical trials for pancreatic cancer and melanoma and other research and development projects, offset by lower spending on lung cancer and an adjustment to reduce research and development expense related to stock based compensation by approximately $2.2 million to reflect the final fair value of Restricted Stock Unit Plan II liability awards in the three months ended March 31, 2010.

Selling, General and Administrative

Selling, general and administrative expense for the three months ended March 31, 2010 increased $5.3 million to $50.4 million, or 45% of net revenue, from $45.1 million, or 62% of net revenue, for the same period in 2009. The increase was mainly due to additional spending on sales and marketing, primarily in the European Union and China, offset by an adjustment to reduce selling, general administrative expense related to stock based compensation by approximately $0.9 million to reflect the final fair value of Restricted Stock Unit Plan II liability awards in the three months ended March 31, 2010.

Amortization of Intangible Assets

Amortization of intangible assets for the three months ended March 31, 2010 was $10.1 million as compared to $10.0 million for the same period in 2009.

Equity in Net Income of Unconsolidated Entities

For the three months ended March 31, 2010, we recorded a loss of $1.0 million from equity investments accounted for under the equity method. In March 2010, we acquired a controlling interest in Drug Source Company, LLC (DSC) and its operating results were included in our consolidated statements of operations. Prior to the business combination, we accounted for our investment in DSC under the equity method. For the three months ended March 31, 2009, we had income of $1.0 million from our investment in DSC .

Other Non-Operating Items

Interest income consisted primarily of interest earned on invested cash. The decrease in interest income for the three months ended March 31, 2010 of $0.6 million was due to lower investment balances and lower interest rates in 2010 as compared to 2009. For the three months ended March 31, 2010, the average yield on cash investments was 0.1%.

Other income for the three months ended March 31, 2010 consisted primarily of gains recognized on the fair value of derivatives and gains recorded from foreign currency exchanges. Other income was $4.1 million higher than the same period in the prior year primarily due to a gain of $1.8 million recognized on our revaluation of DSC in 2010 and other than temporary losses recognized on available for sale securities in 2009.

Provision for Income Taxes

Our effective tax rate for the three months ended March 31, 2010 was approximately 6.8%, resulting in a benefit for income taxes. The effective tax rate for the three months differs from the statutory rate primarily as the result of the application of a valuation allowance against the net income tax benefit for the year.

LIQUIDITY AND CAPITAL RESOURCES

Overview

The following table summarizes key elements of our financial position and sources and (uses) of cash and cash equivalents as follows:


	March 31, 2010			December 31, 2009
	(unaudited)
	(in thousands)
Summary Financial Position
Cash and cash equivalents	$	191,439		$	203,312
Working capital		182,946			192,747
Total assets		1,081,091			1,068,380
Total equity		851,031			846,265

	Three Months Ended March 31,
	2010			2009
	(unaudited, in thousands)
Summary of Sources and (Uses) of Cash and Cash Equivalents:
Operating activities	$	5,723		$	9,367
Purchases of property, plant and equipment		(15,331	)		(18,963	)
Cash from consolidation of DSC		15,099			—
Cash paid for acquisition		(5,754	)		—
Purchases of investments and marketable securities		(3,000	)		—
Investment in notes receivable		(10,000	)		—
Proceeds from sale of subsidiary		—			2,046
Proceeds from sale of marketable securities		—			3,676
Financing activities		1,398			269

Sources and Uses of Cash

Operating Activities

Net cash provided by operating activities was $5.7 million for the three months ended March 31, 2010 compared to net cash provided by operating activities of $9.4 million for the same period in 2009. The decrease in cash used in operations of $3.7 million was primarily due to a decrease in accounts payable and an increase in accounts receivable, offset by an increase in cash from expenses which were prepaid in prior periods.

Investing Activities

Our investing activities included capital expenditures necessary to expand and maintain our manufacturing capabilities and infrastructure and to acquire various investments and intellectual property rights.

Net cash used for the acquisition of property, plant and equipment for the three months ended March 31, 2010 totaled $15.3 million. The majority of this amount related to expenditures for the development of the Costa Mesa research facility and modernization of our Melrose Park, Illinois and Phoenix, Arizona manufacturing facilities. For the three months ended March 31, 2010, we obtained a controlling interest in Drug Source Company, LLC (DSC) and acquired a diagnostic company. We paid $5.8 million for the acquisition and increased cash by $15.1 million when we obtained control of DSC. Additionally, during the first quarter in 2010, we purchased marketable securities of $3.0 million and made an investment in notes receivable of $10.0 million.

Net cash used for the acquisition of property, plant and equipment for the three months ended March 31, 2009 was $19.0 million. The majority of this amount related to expenditures for the modernization of our Melrose Park, Illinois and Phoenix, Arizona manufacturing facilities. For the three months ended March 31, 2009, we had proceeds from the sale of marketable securities of $3.7 million. Additionally, in 2009, we received net proceeds of $2.0 million from the sale of our subsidiary in Barbengo Switzerland.

Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2010 represented cash received upon the exercise of stock options.

Sources of Financing and Capital Requirements

Our primary source of liquidity has been cash from operations and the $700 million cash contribution we received in connection with our separation from APP Pharmaceuticals, Inc. in November 2007. In connection with the proposed spin-off of Abraxis Health, we plan to contribute a portion of our cash balance to Abraxis Health as well as provide a secured credit facility to Abraxis Health. We believe our cash and cash equivalents on hand, together with any cash generated from operations, will be sufficient to finance our operations and our obligations under the proposed secured credit facility for at least the next twelve months. In the event we engage in future acquisitions or significant capital projects or significantly reduce our available cash resources in connection with the proposed spin-off of Abraxis Health, we may have to raise additional capital through additional borrowings or the issuance of debt or equity securities.

On June 18, 2009, we filed a registration statement on Form S-3 with the Securities and Exchange Commission (SEC). On July 2, 2009, the SEC declared this registration statement effective. Under this registration statement, we may, from time to time, offer shares of our common stock and preferred stock, various series of debt securities or warrants or rights to purchase any such securities, either individually or in units, in one or more offerings, in amounts we will determine from time to time, up to a total of $400 million. In addition, certain stockholders may, from time to time, sell in one or more offerings up to a total of 2,000,000 shares of our common stock.

Capital Requirements

Our future capital requirements will depend on numerous factors, including:

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expansion of product sales into international markets;

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working capital requirements and production, sales, marketing and development costs required to support Abraxane^®;

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research and development, including clinical trials, spending to develop further product candidates and ongoing studies;

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the need for manufacturing expansion and improvement;

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the allocation of cash resources between us and Abraxis Health if the proposed spin-off occurs;

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the requirements of any potential future acquisitions, asset purchases or equity investments; and

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the amount of cash generated by operations, including potential milestone and license revenue.

On April 20, 2009, we announced that our board of directors approved a program to repurchase up to $100 million of the company’s common stock. Share repurchases, if any, will be funded by internal cash resources and will be made through open market purchases. The timing, volume and nature of share repurchases are subject to market prices and conditions, applicable securities laws and other factors, and are at the discretion of management. Share repurchases may be commenced, suspended or discontinued at any time without prior notice.

RECENT ACCOUNTING PRONOUNCEMENTS

standard also significantly expands the disclosures related to a vendor’s multiple-deliverable arrangement. The standard is effective on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Alternatively, adoption may be on a retrospective basis, and early application is permitted. We are evaluating the impact of this standard on our consolidated financial statements.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks associated with changes in interest rates and foreign currency exchange rates. Interest rate changes affect primarily our investments in marketable securities and our debt obligations. Changes in foreign currency exchange rates can affect our operations outside of the United States.

Foreign Currency Risk: We have operations in Canada, the European Union, China and other parts of the world; however, both revenue and expenses of those operations are typically denominated in the currency of the country of operations, providing a partial hedge. Nonetheless, these foreign operations are presented in our consolidated and combined financial statements in U.S. dollars and can be impacted by foreign currency exchange fluctuations through both (i) translation risk, which is the risk that the financial statements for a particular period or as of a certain date depend on the prevailing exchange rates of the various currencies against the U.S. dollar, and (ii) transaction risk, which is the risk that the currency impact of transactions denominated in currencies other than the functional currency may vary according to currency fluctuations.

With respect to translation risk, even though there may be fluctuations of currencies against the U.S. dollar, which may impact comparisons with prior periods, the translation impact is included in accumulated other comprehensive income, a component of stockholders’ equity, and does not affect the underlying results of operations. Gains and losses related to transactions denominated in a currency other than the functional currency of the countries in which we operate are included in the consolidated statements of operations. We do not hedge investments in our foreign subsidiaries.

Investment Risk: The primary objectives of our investment program are the safety and preservation of principal, maintaining liquidity to meet operating and projected cash flow requirements, and maximizing return on invested funds, while diversifying risk. Some of the securities that we invest in may have interest rate risk. This means that a change in prevailing interest rates may cause the fair value of the principal amount of the investment to fluctuate. For example, if we hold a security that was issued with a fixed interest rate at the prevailing rate and the prevailing rate later rises, the fair value of the principal amount of our investment will probably decline.

To minimize this risk, we maintain an investment portfolio of cash equivalents and short-term investments consisting of high credit quality securities, including money market funds, commercial paper, government and non-government debt securities. We do not use derivative financial instruments.

We are also exposed to equity price risks on marketable equity securities included in our portfolio of investments entered into for the promotion of business and strategic objectives. These investments are generally in small capitalization stocks in the biotechnology industry sector. We regularly review the market prices of these investments for impairment purposes. For the three months ended March 31, 2010, we did not recognize any other than temporary impairment loss.

Interest Rate Risk: As of March 31, 2010, we had no debt obligations outstanding. Consequently, we have minimal current exposure to changes in interest rates on borrowings.

ITEM 4.

CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures, as such term is defined under Exchange Act Rules 13a-15(e) and 15d-15(e), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and our Principal Financial Officer, to allow timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and in reaching a reasonable level of assurance we necessarily are required to apply judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with participation of our Chief Executive Officer and Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the quarterly period covered by this report. Based on their evaluation and subject to the foregoing, management has concluded that our disclosure controls and procedures were effective as of March 31, 2010.

During the three months ended March 31, 2010, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Certain legal proceedings in which we are involved are discussed in Note 13 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009. There has been no material developments to the legal proceedings discussed in our 2009 Annual Report.

ITEM 1A.

RISK FACTORS

You should carefully consider the risks described below before investing in our publicly traded securities. The risks described below are not the only ones facing us. Our business is also subject to the risks that affect many other companies, such as competition and, general economic conditions. Additional risks not currently known to us or that we currently believe are immaterial also may impair our business operations and our liquidity.

Risks Related to our Business and Industry

We are highly dependent upon the strong market acceptance of Abraxane^®.

Our future profitability is highly dependent upon the strong market acceptance of Abraxane^®. For the year ended December 31, 2009 and three months ended March 31, 2010 and 2009, total Abraxane^® revenue was $314.5 million, $87.9 million and $70.1 million, respectively. Because Abraxane^® is our only approved product, Abraxane^® revenue represented approximately 79% and 88% of our revenues for the three months ended March 31, 2010 and year ended December 31, 2009, respectively. We anticipate that sales of Abraxane^® will remain a substantial portion of our total revenue over the next several years. However, a number of pharmaceutical companies are working to develop alternative formulations of paclitaxel and other cancer drugs and therapies, any of which may compete directly or indirectly with Abraxane^® and which might adversely affect the commercial success of Abraxane^®.

Abraxane^® could lose market share or revenue due to numerous factors, many of which are beyond our control, including:

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lower prices offered on similar products by other manufacturers, including generic forms of Taxol or other taxanes;

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substitute or alternative products or therapies;

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development by others of new pharmaceutical products or treatments that are more effective than Abraxane^®;

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introduction of other generic equivalents or products which may be therapeutically interchanged with Abraxane^®;

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interruptions in manufacturing or supply;

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changes in the prescribing practices of physicians;

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changes in third-party reimbursement practices; and

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migration of key customers to other manufacturers or sellers.

In addition, we will continue to make a significant investment in Abraxane^®, including costs associated with conducting clinical trials and obtaining necessary regulatory approvals for the use of Abraxane^® in other indications and settings and in other jurisdictions, expansion of our marketing, sales and manufacturing staff, the acquisition of paclitaxel raw material, expansion of manufacturing facilities and the manufacture of finished product. The success of Abraxane^® in the Phase III trial for metastatic breast cancer and other clinical trials may not be representative of future clinical trial results for Abraxane^® with respect to other clinical indications. The results from clinical, pre-clinical studies and early clinical trials conducted to date may not be predictive of results to be obtained in later clinical trials, including those ongoing at present. Further, the commencement and completion of clinical trials may be delayed by many factors that are beyond our control, including:

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slower than anticipated patient enrollment;

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difficulty in finding and retaining patients fitting the trial profile or protocols; and

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adverse events occurring during the clinical trials.

Proprietary product development efforts may not result in commercial products.

We intend to maintain an aggressive research and development program for proprietary pharmaceutical products. Successful product development in the biotechnology industry is highly uncertain, and statistically very few research and development projects produce a commercial product. Product candidates that appear promising in the early phases of development, such as in early stage human clinical trials, may fail to reach the market for a number of reasons, including:

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the product candidate did not demonstrate acceptable clinical trial results even though it demonstrated positive pre-clinical trial results;

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the product candidate was not effective in treating a specified condition or illness;

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the product candidate had harmful side effects in humans or animals;

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the necessary regulatory bodies, such as the FDA, did not approve a product candidate for an intended use;

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the product candidate was not economical to manufacture and commercialize;

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other companies or people have or may have proprietary rights to a product candidate, such as patent rights, and will not let the product candidate be sold on reasonable terms, or at all; or

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the product candidate is not cost effective in light of existing therapeutics.

In addition, our discovery pipeline includes product candidates in the follow-on biologics area, also known as biosimilars. Although, like all pharmaceutical products, these product candidates must receive appropriate regulatory clearance before they can be marketed and sold in a particular country, including the United States, there does not currently exist a defined abbreviated regulatory approval process for obtaining this approval in the United States. As a result, considerable uncertainty exists regarding the pathway, timing and likelihood of approval for these types of product candidates in the United States. Because of the absence of a defined abbreviated regulatory approval process for biosimilars in the United States, it could take a longer amount of time to obtain regulatory approval for our biosimilar product candidates than for our other product candidates in our discovery pipeline, if at all. Any delay in, or the inability to receive, regulatory approval for our biosimilar product candidates could materially adversely affect our business plan and growth strategy.

We may be required to perform additional clinical trials or change the labeling of our products if side effects or manufacturing problems are identified after our products are on the market.

If side effects are identified after any of our products are on the market, or if manufacturing problems occur, regulatory approval may be withdrawn and product recalls, reformulation of products, additional clinical trials, changes in labeling of products, and changes to or re-approvals of our manufacturing facilities may be required, any of which could have a material adverse effect on sales of the affected products and on our business and results of operations.

After products are approved for commercial use, we or regulatory bodies could decide that changes to the product labeling are required. Label changes may be necessary for a number of reasons, including the identification of actual or theoretical safety or efficacy concerns by regulatory agencies or the discovery of significant problems with a similar product that implicates an entire class of products. Any significant concerns raised about the safety or efficacy of our products could also result in the need to recall products, reformulate those products, to conduct additional clinical trials, to make changes to the manufacturing processes, or to seek re-approval of the manufacturing facilities. Significant concerns about the safety and effectiveness of a product could ultimately lead to the revocation of our marketing approval. The revision of product labeling or the regulatory actions described above could be required even if there is no clearly established connection between the product and the safety or efficacy concerns that have been raised. The revision of product labeling or the regulatory actions described above could have a material adverse effect on sales of the affected products and on our business and results of operations.

If we or our suppliers are unable to comply with ongoing and changing regulatory standards, sales of our products could be delayed or prevented.

Virtually all aspects of our business, including the development, testing, manufacturing, processing, quality, safety, efficacy, packaging, labeling, record-keeping, distribution, storage, advertising and promotion of our products, and disposal of waste products arising from these activities, are subject to extensive regulation by federal, state and local governmental authorities in the United States, including the FDA and the Department of Health and Humans Services Office of Inspector General (HHS OIG). Our business is also subject to similar and/or additional regulation in other countries. Compliance with these regulations is costly and time-consuming.

Our manufacturing facilities and procedures and those of our suppliers are subject to ongoing regulation, including periodic inspection by the FDA and other regulatory agencies. For example, manufacturers of pharmaceutical products must comply with detailed regulations governing current good manufacturing practices, including requirements relating to quality control and quality assurance. We must spend funds, time and effort in the areas of production, safety, quality control and quality assurance to ensure compliance with these regulations. We cannot assure that our manufacturing facilities or those of our suppliers will not be subject to regulatory action in the future.

Our products generally must receive appropriate regulatory clearance before they can be sold in a particular country, including the United States. We may encounter delays in the introduction of a product as a result of, among other things, insufficient or incomplete submissions to the FDA for approval of a product, objections by another company with respect to our submissions for approval, new patents by other companies, patent challenges by other companies which result in a 180-day exclusivity period, and changes in regulatory policy during the period of product development or during the regulatory approval process. Regulatory agencies have the authority to revoke drug approvals previously granted and remove from the market previously approved products for various reasons, including issues related to current good manufacturing practices for that particular product or in general. We may be subject from time to time to product recalls initiated by us or by regulatory authorities. In September and October 2009, we voluntarily initiated a global recall of a total of twenty-five lots of Abraxane^® manufactured at the Grand Island, New York facility as a result of particulate matter observed in a small number of vials from the recalled lots. Delays in obtaining regulatory approvals, the revocation of a prior approval, or product recalls could impose significant costs on us and adversely affect our ability to generate revenue.

Our inability or the inability of our suppliers to comply with applicable regulatory requirements can result in, among other things, warning letters, fines, consent decrees restricting or suspending our manufacturing operations, delay of approvals for new products, injunctions, civil penalties, recall or seizure of products, total or partial suspension of sales and criminal prosecution. Any of these or other regulatory actions could materially adversely affect our business and financial condition.

We depend on third parties to supply raw materials and other components and may not be able to obtain sufficient quantities of these materials, which will limit our ability to manufacture our products on a timely basis and harm our operating results.

The manufacture of Abraxane^® requires, and our product candidates will require, raw materials and other components that must meet stringent FDA requirements. Some of these raw materials and other components are available only from a limited number of sources. We have not historically experienced any paclitaxel supply shortages. Additionally, we maintain a safety stock supply of paclitaxel to mitigate any supply disruption. Our regulatory approvals for each particular product denote the raw materials and components, and the suppliers for such materials, we may use for that product. Obtaining approval to change, substitute or add a raw material or component, or the supplier of a raw material or component, can be time consuming and expensive, as testing and regulatory approval are necessary. If our suppliers are unable to deliver sufficient quantities of these materials on a timely basis or we encounter difficulties in our relationships with these suppliers, the manufacture and sale of our products may be disrupted, and our business, operating results and reputation could be adversely affected.

The injectable pharmaceutical products markets are highly competitive, and if we are unable to compete successfully, our revenue will decline and our business will be harmed.

The markets for injectable pharmaceutical products are highly competitive, rapidly changing and undergoing consolidation. Abraxane^® competes, directly or indirectly, with the primary taxanes in the market place, including Bristol-Myers Squibb’s Taxol^® and its generic equivalents and Sanofi-Aventis’ Taxotere^® and other cancer therapies. Many pharmaceutical companies have developed and are marketing, or are developing, alternative formulations of paclitaxel and other cancer therapies that may compete directly or indirectly with Abraxane^®. In addition, Abraxane currently competes with other cytotoxic agents outside of the taxane class such as capecitabine, gemcitabine, ixabepilone and navelbine. Many of our competitors have significantly greater research and development, financial, sales and marketing, manufacturing, regulatory and other resources than we do. As a result, they may be able to devote greater resources to the development, manufacture, marketing or sale of their products, receive greater resources and support for their products, initiate or withstand substantial price competition, more readily take advantage of acquisition or other opportunities, or otherwise more successfully market their products.

Any reduction in demand for our products could lead to a decrease in prices, fewer customer orders, reduced revenues, reduced margins, reduced levels of profitability, or loss of market share. These competitive pressures could adversely affect our business and operating results.

Other companies may claim that we infringe on their intellectual property or proprietary rights, which could cause us to incur significant expenses or prevent us from selling our products.

Our success depends in part on our ability to operate without infringing the patents and proprietary rights of third parties. The manufacture, use and sale of new products with conflicting patent rights have been subject to substantial litigation in the pharmaceutical industry. These lawsuits relate to the validity and infringement of patents or proprietary rights of third parties. A number of pharmaceutical companies, biotechnology companies, universities and research institutions may have filed patent applications or may have been granted patents that cover aspects of our products or our licensors’ products, product candidates or other technologies.

Future or existing patents issued to third parties may contain claims that conflict with our products. We may be subject to infringement claims from time to time in the ordinary course of our business, and third parties could assert infringement claims against us in the future with respect to Abraxane^®, products that we may develop or products that we may license. We are in the process of appealing the jury ruling in a patent infringement lawsuit. Litigation or interference proceedings could force us to:

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stop or delay selling, manufacturing or using products that incorporate or are made using the challenged intellectual property;

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pay damages; or

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enter into licensing or royalty agreements that may not be available on acceptable terms, if at all.

Any litigation or interference proceedings, regardless of their outcome, would likely delay the regulatory approval process, be costly and require significant time and attention of key management and technical personnel.

Our inability to protect our intellectual property rights in the United States and foreign countries could limit our ability to manufacture or sell our products.

We rely on trade secrets, unpatented proprietary know-how, continuing technological innovation and patent protection to preserve our competitive position. We have over 100 issued U.S. and foreign patents, including patents relating to Abraxane^®,and the technology surrounding Abraxane^®. The issued patents covering Abraxane^®, and methods of use and preparation of Abraxane^®, currently expire through 2018, but we have additional pending U.S. and foreign patent applications pending that could extend the expiration dates. Our patents and those for which we have licensed or will license rights, including for Abraxane^® , may be challenged, invalidated, infringed or circumvented, and the rights granted in those patents may not provide proprietary protection or competitive advantages to us. We and our licensors may not be able to develop patentable products. Even if patent claims are allowed, the claims may not issue, or in the event of issuance, may not be sufficient to protect the technology owned by or licensed to us. Third-party patents could reduce the coverage of the patents licensed, or that may be licensed to or owned by us. If patents containing competitive or conflicting claims are issued to third parties, we may be prevented from commercializing the products covered by such patents, or may be required to obtain or develop alternate technology. In addition, other parties may duplicate, design around or independently develop similar or alternative technologies.

We may not be able to prevent third parties from infringing or using our intellectual property. We generally control and limit access to, and the distribution of, our product documentation and other proprietary information. Despite our efforts to protect this proprietary information, however, unauthorized parties may obtain and use information that we regard as proprietary. Other parties may independently develop similar know-how or may even obtain access to these technologies.

The laws of some foreign countries do not protect proprietary information to the same extent as the laws of the United States, and many companies have encountered significant problems and costs in protecting their proprietary information in these foreign countries.

The U.S. Patent and Trademark Office and the courts have not established a consistent policy regarding the breadth of claims allowed in pharmaceutical patents. The allowance of broader claims may increase the incidence and cost of patent interference proceedings and the risk of infringement litigation. On the other hand, the allowance of narrower claims may limit the value of our proprietary rights.

The strategy to license rights to or acquire and commercialize proprietary, biological injectable or other specialty injectable products may not be successful, and we may never receive any return on our investment in these products.

We may license rights to or acquire products or technologies from third parties. Other companies, including those with substantially greater financial and sales and marketing resources, will compete with us to license rights to or acquire these products and technologies. We may not be able to license rights to or acquire these proprietary or other products or technologies on acceptable terms, if at all. Even if we obtain rights to a pharmaceutical product and commit to payment terms, including, in some cases, significant up-front license payments, we may not be able to generate product sales sufficient to create a profit or otherwise avoid a loss.

A product candidate may fail to result in a commercially successful drug for other reasons, including the possibility that the product candidate may:

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be found during clinical trials to be unsafe or ineffective;

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fail to receive necessary regulatory approvals;

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be difficult or uneconomical to produce in commercial quantities;

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be precluded from commercialization by proprietary rights of third parties; or

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fail to achieve market acceptance.

The marketing strategy, distribution channels and levels of competition with respect to any licensed or acquired product may be different from those of Abraxane^®, and we may not be able to compete favorably in any new product category.

We may become subject to federal false claims or other similar litigation brought by private individuals and the government.

The Federal False Claims Act (and equivalent state statutes) allows persons meeting specified requirements to bring suit alleging false or fraudulent Medicare or Medicaid claims and to share in any amounts paid to the government in fines or settlement. These suits, known asqui tam actions, have increased significantly in recent years and have increased the risk that a health care company will have to defend a false claim action, pay fines and/or be excluded from Medicare and Medicaid programs. Federal false claims litigation can lead to civil monetary penalties, criminal fines and imprisonment and/or exclusion from participation in Medicare, Medicaid and other federally funded health programs. Other alternate theories of liability may also be available to private parties seeking redress for such claims. A number of parties have brought claims against numerous pharmaceutical manufacturers, and we cannot be certain that such claims will not be brought against us, or if they are brought, that such claims might not be successful.

We may need to change our business practices to comply with changes to, or may be subject to charges under, the fraud and abuse laws.

We are subject to various federal and state laws pertaining to health care fraud and abuse, including the federal Anti-Kickback Statute and its various state analogues, the federal False Claims Act and marketing and pricing laws. Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, imprisonment and exclusion from participation in federal and state health care programs such as Medicare and Medicaid. We may have to change our advertising and promotional business practices, or our existing business practices could be challenged as unlawful due to changes in laws, regulations or rules or due to administrative or judicial findings, which could materially adversely affect our business.

We face uncertainty related to pricing and reimbursement and health care reform.

In both domestic and foreign markets, sales of our products will depend in part on the availability of reimbursement from third-party payors such as government health administration authorities, private health insurers, health maintenance organizations and other health care-related organizations. Effective January 1, 2006, we received a unique reimbursement “J” code for Abraxane^® from the Centers for Medicare and Medicaid Services. That code allows providers to bill Medicare for the use of Abraxane^®. We believe that most major insurers reimburse providers for Abraxane^® use consistent with the FDA-approved indication, which we believe is consistent with the reimbursement practices of major insurers for other drugs containing paclitaxel for the same indication. However, the newly enacted Health Care Reform Act has provided sweeping health care reform, which may impact the prices of drugs. In addition to the newly enacted federal legislation, state legislatures and foreign governments have also shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. The establishment of limitations on patient access to our drugs, adoption of price controls and cost-containment measures in new jurisdictions or programs, and adoption of more restrictive policies in jurisdictions with existing controls and measures, including the impact of the Health Care Reform Act, could adversely impact our business and future results. Medicare, Medicaid and other governmental reimbursement legislation or programs govern drug coverage and reimbursement levels in the United States. Federal law requires all pharmaceutical manufacturers to rebate a percentage of their revenue arising from Medicaid-reimbursed drug sales to individual states.

Both the federal and state governments in the United States and foreign governments continue to propose and pass new legislation, rules and regulations designed to contain or reduce the cost of health care. Existing regulations that affect the price of pharmaceutical and other medical products may also change before any of our products are approved for marketing. Cost control initiatives could decrease the price that we receive for any product we develop in the future. In addition, third-party payers are increasingly challenging the price and cost-effectiveness of medical products and services and litigation has been filed against a number of pharmaceutical companies in relation to these issues. Additionally, significant uncertainty exists as to the reimbursement status of newly approved injectable pharmaceutical products. Our products may not be considered cost effective or adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an adequate return on our investment.

State pharmaceutical marketing compliance and reporting requirements may expose us to regulatory and legal action by state governments or other government authorities.

In recent years, several states, including California, Vermont, Maine, Minnesota, Nevada and West Virginia, in addition to the District of Columbia, have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs and file periodic reports on sales, marketing, pricing and other activities. Similar legislation is being considered in other states. Many of these requirements are new and uncertain, and available guidance is limited. We are continuing to assess our compliance with these state laws. Unless we are in full compliance with these laws, we could face enforcement action and fines and other penalties and could receive adverse publicity, all of which could harm our business.

We may be required to defend lawsuits or pay damages for product liability claims.

Product liability is a major risk in testing and marketing biotechnology and pharmaceutical products. We may face substantial product liability exposure in human clinical trials and for products that we sell after regulatory approval. We maintain insurance coverage for product liability claims in the aggregate amount of $100 million, including primary and excess coverages, which we believe is reasonably adequate coverage. Product liability claims, regardless of their merits, could exceed policy limits, divert management’s attention and adversely affect our reputation and the demand for these products.

We depend heavily on the principal members of our management and research and development teams, the loss of whom could harm our business.

We depend heavily on the principal members of our management and research and development teams, including Dr. Patrick Soon-Shiong, Executive Chairman, and Bruce J. Wendel, Chief Executive Officer. Each of the members of the executive management team is employed “at will.” The loss of the services of any member of the executive management team may significantly delay or prevent the achievement of product development or business objectives.

To be successful, we must attract, retain and motivate key employees, and the inability to do so could seriously harm our business and operations.

To be successful, we must attract, retain and motivate executives and other key employees. We face competition for qualified scientific, technical and other personnel, which may adversely affect our ability to attract and retain key personnel. We also must continue to attract and motivate employees and keep them focused on our strategies and goals.

If we are unable to integrate successfully potential future acquisitions, our business may be harmed.

As part of our business strategy and growth plan, we may acquire businesses, technologies or products that we believe will complement our business. The process of integrating an acquired business, technology or product may result in unforeseen operating difficulties and expenditures and may require significant management attention that would otherwise be available for ongoing development of our existing business. In addition, we may not be able to maintain the levels of operating efficiency that any acquired company achieved or might have achieved separately. Successful integration of the companies that we may acquire will depend upon our ability to, among other things, eliminate redundancies and excess costs. As a result of difficulties associated with combining operations, we may not be able to achieve cost savings and other benefits that the company might hope to achieve with acquisitions. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities, or have an undesirable impact on our financial statements.

We are subject to risks associated with international operations, which could harm both our domestic and international operations.

As part of our business strategy and growth plan, we continue to evaluate international expansion opportunities as we obtain regulatory approvals to market our Abraxane and other product candidates in foreign countries, including countries in the European Union and Asia. Expansion of our international operations could impose substantial burdens on our resources, divert management’s attention from domestic operations and otherwise harm our business. In addition, international operations are subject to risks, including:

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regulatory requirements of differing nations;

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inadequate protection of intellectual property;

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difficulties and costs associated with complying with a wide variety of complex domestic and foreign laws and treaties;

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legal uncertainties regarding, and timing delays associated with, tariffs, export licenses and other trade barriers; and

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currency fluctuations.

Any of these or other factors could adversely affect our ability to compete in international markets and our operating results.

We may be required to indemnify APP and may not be able to collect on indemnification rights from APP.

Under the terms of the separation and distribution agreement, we have agreed to indemnify APP from and after the distribution with respect to all liabilities of Old Abraxis not related to its hospital-based products business and the use by APP of any trademarks or other source identifiers owned by us. Similarly, APP has agreed to indemnify us from and after the distribution with respect to all liabilities of Old Abraxis related to its hospital-based products business and the use by us of any trademarks or other source identifiers owned by APP.

Under the terms of the tax allocation agreement, we agreed to indemnify APP against all tax liabilities to the extent they relate to the proprietary products business, and APP agreed to indemnify us against all tax liabilities to the extent they relate to the hospital-based products business. The tax allocation agreement also generally allocates between us and APP any liability for taxes that may arise in connection with the distribution. In September, 2008, APP entered into a merger agreement with Fresenius Kabi, a subsidiary of Fresenius SE. Pursuant to the merger agreement, Fresenius acquired all of the outstanding common stock of APP. Pursuant to the tax allocation agreement and the merger agreement, APP received a tax opinion, in form and substance reasonably acceptable to us, that the acquisition should not affect the qualification of the distribution under Section 355 and Section 368(a)(1)(D) of the Internal Revenue Code and the nonrecognition of gain to APP in the distribution. Under the terms of the tax allocation agreement, we are generally liable for, and are required to indemnify APP against, any tax liability arising as a result of the distribution failing to qualify for tax-free treatment unless, notwithstanding such tax opinion, such tax liability is imposed as a result of an acquisition of APP, including the acquisition of APP by Fresenius, or certain other specified acts of APP.

Under the terms of the manufacturing agreement, we have agreed to indemnify APP from any damages resulting from a third-party claim caused by or alleged to be caused by (i) our failure to perform our obligations under the manufacturing agreement; (ii) any product liability claim arising from the negligence, fraud or intentional misconduct of us or any of our affiliates or any product liability claim arising from our manufacturing obligations (or any failure or deficiency in our manufacturing obligations) under the manufacturing agreement; (iii) any claim that the manufacture, use or sale of Abraxane^® or our pipeline products infringes a patent or any other proprietary right of a third party; or (iv) any recall, product liability claim or other third-party claim not arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by APP, by reason of the $100 million limitation of liability described below. We have also agreed to indemnify APP for liabilities that it becomes subject to as a result of its activities under the manufacturing agreement and for which it is not responsible under the terms of the manufacturing agreement. APP has agreed to indemnify us from any damages resulting from a third-party claim caused by or alleged to be caused by (i) APP’s gross negligence, bad faith, intentional misconduct or intentional failure to perform its obligations under the manufacturing agreement; or (ii) any product liability claim arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by APP. APP generally will not have any liability for monetary damages to us or third parties in connection with the manufacturing agreement for damages in excess of $100 million in the aggregate.

There are no time limits on when an indemnification claim must be brought and no other monetary limits on the amount of indemnification that may be provided. These indemnification obligations could be significant. Our ability to satisfy any of these indemnification obligations will depend upon the future financial strength of our company. We cannot determine whether we will have to indemnify APP for any substantial obligations. We also cannot assure you that, if APP becomes obligated to indemnify us for any substantial obligations, APP will have the ability to satisfy those obligations. Any indemnification payment by us, or any failure by APP to satisfy its indemnification obligations, could have a material adverse effect on our business.

We will be dependent upon APP to manufacture Abraxane^® for a remaining term of two or three years, and the manufacture of pharmaceutical products is highly regulated.

In connection with the separation and distribution agreement, we entered into a manufacturing agreement with APP for the manufacture of Abraxane^® and our pipeline products whereby APP agreed to undertake certain of the tasks necessary to manufacture Abraxane^® and our pipeline products until December 31, 2011, with this agreement automatically extended by one year if either APP elects to exercise its option to extend the lease on our Melrose Park manufacturing facility or we elect to exercise our option to extend the lease on APP’s Grand Island manufacturing facility. Accordingly, we will be dependent upon APP to manufacture our products. The amount and timing of resources that APP devotes to the manufacture of our products is not within our direct control. Further, in the event of capacity constraints at the manufacturing facilities, the manufacturing agreement provides that the available capacity will be prorated between us and APP according to the parties’ then current use of manufacturing capacity at the relevant facilities. Any loss in manufacturing capacity pursuant to these proration provisions could be detrimental to our business and operating results. While the manufacturing agreement allows us to override these proration provisions, we may only do so by paying APP additional fees under the manufacturing agreement. If we are forced to pay APP additional fees to retain our capacity rights under the manufacturing agreement, it could be detrimental to our operating results.

The manufacture of pharmaceutical products is highly exacting and complex, due in part to strict regulatory requirements and standards which govern both the manufacture of a particular product and the manufacture of these types of products in general. Problems may arise during their manufacture due to a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures and environmental factors. If problems arise during the production of a batch of product, that batch of product may have to be discarded. This could, among other things, lead to loss of the cost of raw materials and components used and lost revenue. If such problems are not discovered before the product is released to the market, recall costs may also be incurred. Under the terms of the manufacturing agreement, we have the final responsibility for release of the products manufactured pursuant to the manufacturing agreement and will bear all expenses in connection with any recall of products, unless the recall is a result of APP’s gross negligence, bad faith, intentional misconduct or intentional breach, in which case APP would bear all costs and expenses related to such product recall, subject to the $100 million limit on liability under the manufacturing agreement. To the extent APP encounters difficulties or problems with respect to the manufacture of our pharmaceutical products, including Abraxane^®, this may be detrimental to our business, operating results and reputation.

Risks Related To An Investment In Our Common Stock

Our executive chairman and entities affiliated with him collectively own a significant percentage of our common stock and could exercise significant influence over matters requiring stockholder approval, regardless of the wishes of other stockholders.

Our executive chairman and entities affiliated with him collectively own approximately 82% of our outstanding common stock. Accordingly, they have the ability to significantly influence all matters requiring stockholder approval, including the election and removal of directors and approval of significant corporate transactions such as mergers, consolidations and sales of assets. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control or impeding a merger or consolidation, takeover or other business combination, which could cause the market price of our common stock to fall or prevent our stockholders from receiving a premium in such a transaction. This significant concentration of stock ownership may adversely affect the market for and trading price of our common stock if investors perceive that conflicts of interest may exist or arise.

Substantial sales of our common stock could depress the market price of our common stock.

All of the shares of our common stock issued in connection with the separation, other than shares issued to our affiliates, are eligible for immediate resale in the public market. Although shares issued to our affiliates are not immediately freely tradable, we have granted registration rights to the former ABI shareholders, including our executive chairman. Under the registration rights agreement, the former ABI shareholders will have the right to require us to register all or a portion of the shares of our common stock they received in connection with the separation. In addition, the former ABI shareholders may require us to include their shares in future registration statements that we file and our executive chairman may require us to register shares for resale on a Form S-3 registration statement. 2,000,000 shares of our common stock held by our executive chairman have been registered on the registration statement on Form S-3 that was declared effective by the SEC on July 2, 2009. Upon registration, the registered shares generally will be freely tradeable in the public market without restriction. However, in connection with any underwritten offering, the holders of registrable securities will agree to lock up any other shares for up to 90 days and will agree to a limit on the maximum number of shares that can be registered for the account of the holders of registrable securities under so-called “shelf” registration statements. Substantial sales of our shares, or the perception that such sales might occur, could depress the market price for our shares. Our executive chairman and entities affiliated with him beneficially own over 82% of our outstanding common stock.

Our stock price may be volatile in response to market and other factors.

The market price for our common stock may be volatile and subject to price and volume fluctuations in response to market and other factors, including the following, some of which are beyond our control:

•

variations in our quarterly operating results from the expectations of securities analysts or investors;

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revisions in securities analysts’ estimates;

•

announcements of technological innovation or new products by us or our competitors;

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announcements by us or our competitors of significant acquisition, strategic partnerships, joint ventures or capital commitments;

•

general technological, market or economic trends;

•

investor perception of our industry or our prospects;

•

insider selling or buying;

•

investors entering into short sale contracts;

•

regulatory developments affecting our industry; and

•

additions or departures of key personnel.

We are not subject to the provisions of Section 203 of the Delaware General Corporation Law, which could negatively affect your investment.

We elected in our certificate of incorporation to not be subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes a merger, asset sale or other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns (or, in certain cases, within three years prior, did own) 15% or more of the corporation’s voting stock. Our decision not to be subject to Section 203 will allow, for example, our executive chairman (who with members of his immediate family and entities affiliated with him beneficially own approximately 82% of our common stock) to transfer shares in excess of 15% of our voting stock to a third-party free of the restrictions imposed by Section 203. This may make us more vulnerable to takeovers that are completed without the approval of our board of directors and/or without giving us the ability to prohibit or delay such takeovers as effectively.

These provisions could also limit the price that investors would be willing to pay in the future for shares of our common stock.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

RESERVED

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

The exhibits are as set forth in the Exhibit Index.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


ABRAXIS BIOSCIENCE, INC.

By:		/s/ MITCHELL K. FOGELMAN
		Mitchell K. Fogelman
		Senior Vice President of Finance
		(Principal Financial and Accounting Officer)

Date: May 7, 2010

EXHIBIT INDEX


Exhibit Number		Description
2.1		Separation and Distribution Agreement among APP Pharmaceuticals, Inc., Abraxis BioScience, LLC, APP Pharmaceuticals, LLC and the Registrant (incorporated by reference to Exhibit 2.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

3.3		Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

4.1		Reference is made to Exhibits 3.1, 3.2 and 3.3

4.2		Specimen Stock Certificate of the Registrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Amendment #2 to Form 10 Registration Statement with the Securities and Exchange Commission on October 24, 2007)

4.3		Registration Rights Agreement by and among the Registrant and certain stockholders of the Registrant as set forth therein (incorporated by reference to Exhibit 4.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.1		Separation and Distribution Agreement among APP Pharmaceuticals, Inc., Abraxis BioScience, LLC, APP Pharmaceuticals, LLC and the Registrant (Reference is made to Exhibit 2.1 hereto)

10.2		Tax Allocation Agreement among APP Pharmaceuticals, Inc., Abraxis BioScience, LLC, APP Pharmaceuticals, LLC and the Registrant (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.3		Transition Services Agreement between APP Pharmaceuticals, Inc. and the Registrant (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.4		Employee Matters Agreement among APP Pharmaceuticals, Inc., APP Pharmaceuticals, LLC, Abraxis BioScience, LLC and the Registrant (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.5*		Manufacturing Agreement between APP Pharmaceuticals, LLC and the Registrant (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.6		Lease Agreement between APP Pharmaceuticals, LLC and Abraxis BioScience, LLC for the premises located at 2020 Ruby Street, Melrose Park, Illinois (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.7		Lease Agreement between APP Pharmaceuticals, LLC and Abraxis BioScience, LLC for the warehouse facilities located at 2045 N. Cornell Avenue, Melrose Park, Illinois (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.8		Lease Agreement between APP Pharmaceuticals, LLC and Abraxis BioScience, LLC for the research and development facility located at 2045 N. Cornell Avenue, Melrose Park, Illinois (incorporated by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.9		Lease Agreement between Abraxis BioScience, LLC and APP Pharmaceuticals, LLC for the premises located at 3159 Staley Road, Grand Island, New York (incorporated by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)


Exhibit Number		Description
10.10		Form of Indemnification Agreement between the Registrant and each of its executive officers and directors (incorporated by reference to Exhibit 10.10 to the Registrant’s Amendment #1 to Form 10 Registration Statement with the Securities and Exchange Commission on October 5, 2007)

10.11		Employment Agreement, dated January 25, 2006, between the Registrant and Carlo Montagner (incorporated by reference to Old Abraxis’ Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on August 10, 2006)

10.12		Standard Form Office Lease, dated March 24, 2006, between the Registrant and California State Teacher’s Retirement System, as amended on May 26, 2006, for the premises located at 11755 Wilshire Boulevard, Los Angeles, California (incorporated by reference to Old Abraxis’ Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2006)

10.13		Co-Promotion Strategic Marketing Services Agreement, dated April 26, 2006, between the Registrant and AstraZeneca UK Limited (incorporated by reference to Old Abraxis’ Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on August 10, 2006)

10.14		Abraxis BioScience, Inc. 2007 Stock Incentive Plan, including forms of agreement thereunder (incorporated by reference to Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.15		American BioScience, Inc. Restricted Stock Unit Plan I, including a form of agreement thereunder (incorporated by reference to Old Abraxis’ Registration Statement on Form S-8 (File No. 333-133364) filed with the Securities and Exchange Commission on April 18, 2006)

10.16		American BioScience, Inc. Restricted Stock Unit Plan II, including a form of agreement thereunder (incorporated by reference to Old Abraxis’ Registration Statement on Form S-8 (File No. 333-133364) filed with the Securities and Exchange Commission on April 18, 2006)

10.17		Agreement, dated April 18, 2006, between the Registrant and RSU LLC (incorporated by reference to Old Abraxis’ Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on August 10, 2006)

10.18*		Aircraft Purchase and Sale Agreement (incorporated by reference to Old Abraxis’ Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2006)

10.19		Escrow Agreement, dated April 18, 2006, by and among Abraxis BioScience, our chief executive officer and Fifth Third Bank (incorporated by reference to Old Abraxis’ Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2006).

10.20*		License Agreement, dated as of May 27, 2005, between the Registrant and Taiho Pharmaceutical Co., Ltd. (incorporated by reference to Exhibit 10.10 to the Registrant’s Amendment #3 to Form 10 Registration Statement with the Securities and Exchange Commission on November 2, 2007)

10.21		Agreement between APP Pharmaceuticals, Inc. and the Registrant (incorporated by reference to Exhibit 10.22 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 20, 2007)

10.22		Employment Agreement, dated as of May 22, 2008, between the Registrant and David O’Toole (incorporated by reference to Exhibit 10.22 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2008)

10.23		Employment Agreement, dated as of October 6, 2008, between the Registrant and Edward Geehr, M.D. (incorporated by reference to Exhibit 10.23 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2008)

10.24		Termination Agreement dated as of November 19, 2008, between Abraxis BioScience, LLC and AstraZeneca UK Limited (incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2009)

10.25		Employment Agreement, dated as of April 29, 2009, between the Registrant and Leon O. Moulder, Jr. (incorporated by reference to Exhibit 10.25 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 7, 2009)


Exhibit Number		Description
10.26		Offer of Employment by Registrant to Richard J. Rodgers (incorporated by reference to Exhibit 10.26 to the Registrant’s Quarterly Report on Form 10-Q filed with Securities and Exchange Commission on November 9, 2009)

10.27		Offer of Employment by Registrant to Mary Lynne Hedley (incorporated by reference to Exhibit 10.27 to the Registrant’s Quarterly Report on Form 10-Q filed with Securities and Exchange Commission on November 9, 2009)

10.28		Offer of Employment by Registrant to Mitchell K. Fogelman (incorporated by reference to Exhibit 10.28 to the Registrant’s Annual Report on Form 10-K filed with Securities and Exchange Commission on March 12, 2010)

31.1†		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2†		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1†		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002

32.2†		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002

*	Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission.

†	Filed herewith.

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	H.S. sophomore Avg

Abraxis Bioscience (ABII) Inactive 10-Q2010 Q1 Quarterly report

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