Abraxis BioScience splits in two
independent public companies following accelerated growth, the
US-based firm announced this week.
The company would separate Abraxis Pharmaceutical Products (APP), hosting the company's hospital-based product business, from its proprietary product business, Abraxis Oncology and Abraxis Research, to become the new Abraxis BioScience. The transaction would enable each company to deliver on their strategic visions and compete more effectively in their specialized marketplaces with their differing capital requirements and business mandates. Abraxis BioScience chief executive and chairman Patrick Soon-Shiong said in a statement: "Strategic initiatives executed over the past few years, including the acquisition of global rights to ABRAXANE and the nab technology platform, the acquisition of the AstraZeneca anesthesia/analgesic portfolio and the acquisition of the Pfizer manufacturing facility in Puerto Rico, have accelerated the growth of two robust businesses." "By separating these unique business units into two entities, we believe we will be able to unlock the intrinsic value of both companies by allowing each company to pursue its unique long-term strategic initiatives and address their diverse operational and capital needs." The move would allow each individual business to focus more on its own business development opportunities and respective pipelines, Soon-Shiong said. "APP, with one of the most comprehensive injectable product portfolios in the US and one of the only companies that mirror the overall market demand for injectable products, will be positioned to maximize its core strength to enhance current product offerings and pursue new opportunities including biosimilars." The new Abraxis BioScience would become a more highly focused biotechnology company, which would concentrate more on the nab (nanoparticle-albumin bound) technology platform to deliver therapeutics, such as ABRAXANE (albumin-bound paclitaxel), and work towards new and personalized treatments to patients with life-threatening diseases, Soon-Shiong said. Following the separation, AAP will be one of the largest standalone publicly traded companies focused on injectable pharmaceuticals, of which it provides more than 400 dosage forms. The AAP headquarters will remain in Schaumburg, Illinois, while, Abraxis BioScience will be headquartered in Los Angeles, California. Following the separation, each current shareholder will own one share of APP and one share of the new Abraxis BioScience, for each share previously held. Deutsche Bank and Wachovia Bank have provided an underwritten commitment for $1.45bn of bank financing, comprised of a $1.3bn term loan based on approximately 4.8 to 5.2 times estimated adjusted EBITDA of APP, and a $150m revolving credit facility. Meanwhile, the new Abraxis BioScience will receive approximately $1bn from the bank financing proceeds. The transaction is expected to be completed in the fourth quarter of this year, subject to customary closing conditions, obtaining a private letter ruling from the Internal Revenue Service, and other regulatory approvals. Detailed information about the separation of the businesses will be provided when the company files a Form 10 registration statement for the new Abraxis BioScience, which is expected to be filed in the third quarter of this year. ABRAXANE, approved in the US in January 2005 for the treatment of metastatic breast cancer, is the first product developed using nab technology. The technology harnesses the properties of the human protein albumin to transport and deliver therapeutic agents to the disease sites. ABRAXANE, which is also marketed in Canada, posted a revenue of $175m in 2006, and is currently placed as having a 36.4 per cent market share for treatment of metastatic breast cancer. The drug is currently under active review in Australia, Russia and the EU.
