Abraxis BioScience Reports Second Quarter 2007 Revenue of $243 Million versus $161 Million in Prior Year Period.Second Quarter 2007 Adjusted Net Income Per Diluted Share Increased to $0.26 versus $0.16 in the Prior Year Period; GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Net Income Per Diluted Share for the Second Quarter 2007 Increased to $0.14 Versus a Loss of $0.57 in the Prior Year Period ABRAXANE, the Leading Taxane in Metastatic Metastatic The term used to describe a secondary cancer, or one that has spread from one area of the body to another. Mentioned in: Coagulation Disorders metastatic pertaining to or of the nature of a metastasis. Breast Cancer in Patient Share, Continues to be the Fastest Growing Taxane with Unit Volume Growth of 46 Percent in the Second Quarter of 2007 versus the Same Period in 2006 LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- Abraxis BioScience, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ABBI Advanced Breast Biopsy Instrument (ABBI) Uses a rotating circular knife and thin heated electrical wire to remove a large cylinder of abnormal breast tissue. Mentioned in: Fibrocystic Condition of the Breast ), an integrated, global biopharmaceutical company, today reported unaudited financial results for the second quarter ended June 30, 2007. Second quarter 2007 revenue increased 50.9 percent to $242.5 million, versus $160.7 million in the second quarter of 2006. Revenue for company-wide, hospital-based products in the second quarter of 2007 was $160.0 million, a 32.7 percent increase from the prior year quarter. For the second quarter of 2007, ABRAXANE([R]) (paclitaxel paclitaxel /pac·li·tax·el/ (pak?li-tak´sel) an antineoplastic that promotes and stabilizes polymerization of microtubules, isolated from the Pacific yew tree (Taxus brevifolia); protein-bound particles for injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. suspension) (albumin-bound) revenue increased 116.7 percent to $78.7 million, including deferred revenue of $9.1 million, versus $36.3 million in the prior year period. Company-wide gross profit for the second quarter of 2007 was $156.9 million, or 64.7 percent of total revenue, as compared to $93.1 million, or 57.9 percent of total revenue, in the same quarter of 2006. The company posted adjusted net income and adjusted net income per diluted share, which, in each case, excludes merger-related items, non-cash stock compensation expense and other items, as follows: [TABLE OMITTED] On a reported basis and calculated in accordance with U.S. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP), the company reported net income and net income per diluted share as follows: [TABLE OMITTED] The attached table provides additional information regarding the basis for the adjusted net income per diluted share calculation, and the rationale for providing such information is included toward the end of this release. "The second quarter of 2007 was a very eventful quarter for Abraxis BioScience. In addition to announcing our proposed separation, we also continued to execute our business strategies for each operating unit operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon . We increased market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of ABRAXANE, launched three new hospital-based products, continued to make strides in optimizing our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. , and entered into new strategic agreements that have the ability to expand our proprietary pipeline," said Patrick Soon-Shiong, M.D., chairman and chief executive officer of Abraxis BioScience. Segment Reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four On July 2, 2007, the company announced that its board of directors had approved a plan to separate its proprietary business - Abraxis Oncology and Abraxis Research (the new Abraxis BioScience or "ABI Abi (ā`bī) [short for Abijah], in the Bible, King Hezekiah's mother. (Application Binary Interface) A specification for a specific hardware platform combined with the operating system. ") - from its hospital-based business - Abraxis Pharmaceutical Products (APP). Until the separation is complete, the company will continue to report in two segments: the ABI segment, which represents the combined operations of the proprietary business; and the APP segment. The ABI segment focuses primarily on the company's internally developed proprietary product, ABRAXANE, and its proprietary pipeline. The APP segment manufactures and markets one of the broadest portfolios of injectable drugs, including oncology, critical care and anti-infectives, and markets the company's anesthetic/analgesic products. The attached tables provide additional detail on the operating performance of the segments. ABI Segment ABRAXANE revenue for the second quarter of 2007 increased 116.7 percent to $78.7 million, which included $69.6 million of net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , versus revenue of $36.3 million in the same period of 2006. Net sales grew 91.7 percent in the second quarter of 2007 versus the same period in 2006. ABRAXANE revenue for the second quarter of 2007 included $9.1 million of recognized deferred revenue resulting from the amortization of the $200 million upfront payment received from AstraZeneca for the co-promotion of ABRAXANE in the United States. Based upon June 2007 NDC NDC National Drug Code NDC NATO Defense College NDC National Documentation Centre (National Hellenic Research Foundation, Athens, Greece) NDC National Dairy Council NDC National Democratic Congress and IMS (1) See IP Multimedia Subsystem. (2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. data, ABRAXANE is now the fastest growing taxane in the market and the taxane market leader in metastatic breast cancer across all lines of therapy. According to IMS, ABRAXANE unit demand in the second quarter of 2007 reached its highest unit volume since launch with an increase of 46 percent versus the second quarter of 2006. In addition, based upon June 2007 IntrinsQ data, ABRAXANE is the leading taxane in metastatic breast cancer in patient share. ABI segment gross margin for the second quarter of 2007 was 92.2 percent compared to 86.5 percent for the same period in 2006. For the second quarter of 2007, selling and marketing expenses were $35.5 million, or 42.7 percent of revenue, versus $16.7 million, or 41.2 percent of revenue, in the prior year period. The increase was due primarily to additional ABRAXANE costs for commission expense and expanded marketing efforts in North America relating to the co-promotion agreement with AstraZeneca and activities promoting global awareness of ABRAXANE. Research and development expense totaled $15.5 million in the second quarter of 2007 compared with $14.8 million in the prior year period. The company expects research and development spending will increase in the second half of 2007 in connection with the enrollment of patients in the three planned Phase III trials for ABRAXANE. As a result of recent strategic transactions, including the acquisition of the Watson manufacturing facility, the Biocon license agreement, and various academic research collaborations, company-wide research and development expense is now expected to be in the range of $120 million to $130 million in 2007. APP Segment Hospital-based product revenue for the APP segment in the second quarter of 2007 increased 32.6 percent to $159.3 million versus $120.1 million in the same quarter of 2006. Revenue in the second quarter of 2007 included sales of $36.1 million from the anesthetic/analgesic products acquired from AstraZeneca in June 2006, which are grouped under critical care. Based on the temporary, voluntary halt in distribution of certain products which impacted sales in the first half of 2007, revenue for 2007 is now expected to grow by 9 percent to 11 percent over 2006 for this segment. Gross margin for the second quarter of 2007 was 53.4 percent, excluding amortization associated with the purchase of the anesthetic/analgesic products, compared to 55.4 percent in the same quarter of 2006. The decrease in gross margin was primarily a result of higher freight costs associated with higher fuel costs. In the second quarter of 2007, selling and marketing expenses were $4.2 million, or 2.7 percent of revenue, versus $4.1 million, or 3.4 percent of revenue, in the prior year period. Research and development expense totaled $12.9 million for the second quarter of 2007 compared to $6.0 million in the prior year period. The increase was primarily due to the expense associated with the Puerto Rico manufacturing facility. The company expects to begin commercial distribution of product from this facility in the second half of 2007. In May 2007, APP launched Clindamycin Injection, 300mg, 600mg, 900mg and 9g, USP USP - unique sales point , the generic equivalent of Pfizer's Cleocin([R]) Phosphate Injection. During and after the close of the quarter, the company received three approvals from the U.S. Food and Drug Administration (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ). These approvals were for Caffeine Citrate injection, USP, 20 mg/mL, the generic equivalent of Cafcit([R]) Injection, Oxytocin oxytocin (ŏksĭtō`sĭn), hormone released from the posterior lobe of the pituitary gland that facilitates uterine contractions and the milk-ejection reflex. Injection, USP, 30 mL, the generic equivalent of Pitocin([R]) and Fosphenytoin Sodium fosphenytoin sodium Cerebyx, Pro-Epanutin (UK) Pharmacologic class: Hydantoin Therapeutic class: Anticonvulsant Pregnancy risk category D ActionInjection, 100 mg, 2 mL and 500 mg, 10 mL vials, USP, the generic equivalent of Cerebyx([R]). Tentative approval for Fosphenytoin fosphenytoin /fos·phen·y·to·in/ (fos´fen-i-toin?) a prodrug of phenytoin used as the sodium salt in the treatment of epilepsy, excluding petit mal epilepsy. was received in April 2007.In addition to the vial sizes of Oxytocin Injection already distributed by APP (3mL and 10 mL), the company will distribute the larger, more convenient size (30 mL fill in a 30 mL vial) in single-use vials with latex-free stoppers stoppers see stopper pad. . APP expects to commence marketing this product in the third quarter of 2007. In August 2007, the company announced the launch of Doxorubicin Hydrochloride doxorubicin hydrochloride Warning - Hazardous drug! Adriamycin PFS, Adriamycin RDF, Rubex Pharmacologic class: Anthracycline Therapeutic class: Antibiotic antineoplastic Injection, USP 2mg/mL, the generic equivalent of Adriamycin([R]) PFS PFS, n post facilitation stretch; therapeutic approach utilized during proprioceptive neuromuscular facilitation in which the patient begins the stretch midway between the fully relaxed and fully stretched position and uses maximum level of effort to . Contracts for this product have already been secured and APP has commenced marketing of Doxorubicin doxorubicin /doxo·ru·bi·cin/ (dok?so-roo´bi-sin) an antineoplastic antibiotic, produced by Streptomyces peucetius, which binds to DNA and inhibits nucleic acid synthesis; used as the hydrochloride salt and as a liposome-encased , which is commonly used in the treatment of a wide range of cancers. Including the 26 ANDAs pending with the FDA, representing approximately $1.5 billion in annual branded sales, APP currently has over 60 product candidates in various stages of development. General and Administrative Expenses Company-wide, general and administrative expenses for the second quarter of 2007, excluding selling and marketing expenses, were $33.4 million, or 13.8 percent of revenue, versus $22.5 million, or 14.0 percent of revenue, for the same period in 2006. General and administrative expenses are expected to be in the range of $215 million to $225 million in 2007, excluding ABRAXANE commissions to AstraZeneca and separation related costs. Separation related costs for the second quarter of 2007 were $4.0 million, representing direct professional fees and transaction related costs associated with the proposed separation of the proprietary business. Clinical Development Update ABRAXANE is currently under active review in Australia, Russia, China, India and the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community by their respective regulatory agencies. In Japan, ABRAXANE development is underway in partnership with Taiho Pharmaceuticals, the leading domestic oncology company in that country. In the second quarter of 2007, the company initiated two of four planned Phase I/II trials with nab-docetaxel (ABI-008). These two Phase I/II trials will evaluate the safety, tolerability and anti-tumor activity of nab-docetaxel for the treatment of hormone refractory prostate cancer prostate cancer, cancer originating in the prostate gland. Prostate cancer is the leading malignancy in men in the United States and is second only to lung cancer as a cause of cancer death in men. and metastatic breast cancer. Clinical studies for nab-rapamycin (ABI-009) are expected to begin in the second half of 2007. The company has confirmed with the FDA its clinical development plan for nab-17AAG AAG Association of American Geographers (Washington, DC) AAG Assistant Attorney General AAG Asociación Argentina de Golf AAG Anti-Aircraft Gun AAG Assistant Adjutant General AAG Australian Association of Gerontology (ABI-010) and plans to submit an IND in the second half of 2007. Abraxis anticipates filing an IND for nab-thiocolchicine dimer dimer /di·mer/ (di´mer) 1. a compound formed by combination of two identical molecules. 2. a capsomer having two structural subunits. di·mer n. 1. (ABI-011) in 2008. The company currently expects that the worldwide head-to-head Phase III registration trial comparing weekly ABRAXANE to every three week Taxotere for the treatment of first-line metastatic breast cancer will begin in the second half of 2007. The non-small cell lung cancer Lung Cancer, Non-Small Cell Definition Non-small cell lung cancer (NSCLC) is a disease in which the cells of the lung tissues grow uncontrollably and form tumors. Description There are two kinds of lung cancers, primary and secondary. and melanoma Phase III trials for ABRAXANE are also expected to begin in the second half of 2007. Subsequent to the close of the quarter, the company has announced various agreements that are part of the ongoing execution of the Abraxis strategy to work closely with innovative, cutting edge scientists to discover new chemical entities and to maximize the opportunity to utilize its nab technology and the gp60 receptor-mediated cell signal transduction pathway. Abraxis has completed strategic partnerships or licensing arrangements with the Buck Institute for Age Research The Buck Institute for Age Research is the United States' first independent biomedical research institute devoted solely to research on aging and age-related disease. The mission of the Buck Institute is to extend the healthspan, the healthy years of life. , the California NanoSystems Institute at UCLA UCLA University of California at Los Angeles UCLA University Center for Learning Assistance (Illinois State University) UCLA University of Carrollton, TX and Lower Addison, TX , Dana-Farber Cancer Institute, University of British Columbia Locations Vancouver The Vancouver campus is located at Point Grey, a twenty-minute drive from downtown Vancouver. It is near several beaches and has views of the North Shore mountains. The 7. , University of Maryland University of Maryland can refer to:
Conference Call Information On Thursday, August 9 2007, the company will host a conference call with interested parties beginning at 8:30 a.m. PDT/11:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to review its results of operations for the second quarter of 2007. The conference call may be heard by interested parties through a live audio Internet broadcast at www.abraxisbio.com and www.earnings.com. For those unable to listen to the live broadcast, a playback of the webcast will be available at both websites for approximately six months beginning shortly after the conclusion of the call. Non-GAAP Financial Measures Adjusted net income per diluted share is a non-GAAP financial measure comprised of reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of excluding the impact of merger-related non-cash amortization of intangible assets, direct merger and transaction-related costs, non-cash stock compensation expense, minority interests, non-cash amortization of acquired intangible assets, and separation-related costs. The company believes that its presentation of non-GAAP financial measures provides useful supplementary information to investors in understanding the underlying operating performance of the company and facilitates additional analysis by investors. The company also uses non-GAAP financial measures internally for operating, budgeting and financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against purposes. The non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance calculated in accordance with GAAP. A reconciliation of GAAP net income to adjusted net income for the three and six months ending June 30, 2007 and June 30, 2006 is included with this press release. About ABRAXANE The U.S. Food and Drug Administration approved ABRAXANE([R]) for Injectable Suspension (paclitaxel protein-bound particles for injectable suspension) (albumin-bound) in January 2005 for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy Adjuvant chemotherapy Treatment of the tumor with drugs after surgery to kill as many of the remaining cancer cells as possible. Mentioned in: Neuroblastoma . Prior therapy should have included an anthracycline unless clinically contraindicated. For the full prescribing information for ABRAXANE([R]) please visit www.abraxane.com. About Abraxis BioScience, Inc. Abraxis BioScience, Inc. is an integrated global biopharmaceutical company dedicated to meeting the needs of critically ill patients. The company develops, manufactures and markets one of the broadest portfolios of injectable products and leverages revolutionary technology such as its nab[TM] platform to discover and deliver breakthrough therapeutics that transform the treatment of cancer and other life-threatening diseases. The first FDA approved product to use this nab platform, ABRAXANE([R]), was launched in 2005 for the treatment of metastatic breast cancer. Abraxis trades on the NASDAQ Global Market under the symbol ABBI. For more information about the company and its products, please visit www.abraxisbio.com. FORWARD-LOOKING STATEMENTS The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this press release include statements regarding our expectations, beliefs, hopes, goals, intentions, initiatives or strategies, including statements regarding the proposed separation of the proprietary product business from the hospital-based business, the clinical development plan, and the timing and scope of clinical studies and trials, for ABRAXANE and product candidates, including nab-docetaxel, nab-rapamycin, nab-17AAG and nab-thiocolchicine dimer, and anticipated research and development and general and administrative expenses. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the inability to obtain a favorable private letter ruling from the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. on the tax-free nature of the transactions; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention; the inability to recognize the benefits of the transactions contemplated by the separation of the businesses; the fact that results from pre-clinical studies may not be predictive of results to be obtained in other pre-clinical studies or future clinical trials; delays in commencement and completion of clinical studies or trials, including slower than anticipated patient enrollment and adverse events occurring during the clinical trials; decisions by regulatory authorities regarding whether and when to approve ABRAXANE or product candidates for various indications as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of ABRAXANE and other products and product candidates; unexpected safety, efficacy or manufacturing issues with respect to ABRAXANE or product candidates; the need for additional data or clinical studies for ABRAXANE or product candidates; regulatory developments (domestic or foreign) involving the company's manufacturing facilities; the market adoption and demand of ABRAXANE and other products, the costs associated with the ongoing launch of ABRAXANE; research and development associated with the nab technology platform; the impact of pharmaceutical industry regulation; the impact of competitive products and pricing; the availability and pricing of ingredients used in the manufacture of pharmaceutical products; the ability to successfully manufacture products in a time-sensitive and cost effective manner; the acceptance and demand of new pharmaceutical products; and the impact of patents and other proprietary rights held by competitors and other third parties. Additional relevant information concerning risks can be found in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2006 and in other documents it has filed with the Securities and Exchange Commission. The information contained in this press release is as of the date of this release. Abraxis assumes no obligations to update any forward-looking statements contained in this press release as the result of new information or future events or developments. Taxotere([R]) is a registered trademark of Sanofi Aventis. Cleocin([R]) and Cerebyx([R])are registered trademarks of Pfizer Inc. Cafcit([R]) is a registered trademark of Mead Johnson and Company Adriamycin([R]) is a registered trademark of Bedford Laboratories, a division of Boehringer Ingelheim GmbH Pitocin([R]) is a registered trademark of Parkedale Pharmaceuticals Inc. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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