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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 June 30, 2009



| ̈ | 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  x

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 July 31, 2009, the registrant had 40,118,806 shares of $0.001 par value common stock outstanding, excluding treasury shares.









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##### Table of Contents

Abraxis BioScience, Inc.

INDEX



|                              |  |                                                                                                     |  |     
|----------------------------- |  | --------------------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                                     |  | Page
|                              | 
|PART I. Financial Information |  |                                                                                                    
|                              |  |                                                                                                    
|Item 1.                       |  | Financial Statements (Unaudited)                                                                    |  | 3   
|                              |  |                                                                                                    
|                              |  | Condensed consolidated balance sheets  June 30, 2009 and December 31, 2008                         |  | 3   
|                              |  |                                                                                                    
|                              |  | Condensed consolidated statements of operations  Three and six months ended June 30, 2009 and 2008 |  | 4   
|                              |  |                                                                                                    
|                              |  | Condensed consolidated statements of cash flows  Six months ended June 30, 2009 and 2008           |  | 5   
|                              |  |                                                                                                    
|                              |  | Notes to unaudited condensed consolidated financial statements  June 30, 2009                      |  | 6   
|                              |  |                                                                                                    
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations               |  | 14  
|                              |  |                                                                                                    
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                          |  | 24  
|                              |  |                                                                                                    
|Item 4.                       |  | Controls and Procedures                                                                             |  | 25  
|                              | 
|PART II. Other Information    |  |                                                                                                    
|                              |  |                                                                                                    
|Item 1.                       |  | Legal Proceedings                                                                                   |  | 26  
|                              |  |                                                                                                    
|Item 1A.                      |  | Risk Factors                                                                                        |  | 26  
|                              |  |                                                                                                    
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                         |  | 36  
|                              |  |                                                                                                    
|Item 3.                       |  | Defaults Upon Senior Securities                                                                     |  | 36  
|                              |  |                                                                                                    
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                 |  | 36  
|                              |  |                                                                                                    
|Item 5.                       |  | Other Information                                                                                   |  | 36  
|                              |  |                                                                                                    
|Item 6.                       |  | Exhibits                                                                                            |  | 36  
|                              | 
|Signatures                    |  | 37                                                                                                 



2



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##### Table of Contents

PART I. FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

Abraxis BioScience, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share data)



|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | - | ---------------- | - | --------- | -
|                                                                                                                                                                           |  | June 30,2009 |           |   | December 31,2008 |  
|                                                                                                                                                                           |  | (unaudited)  |           |   |                  |  
|Assets                                                                                                                                                                     |  |              |           |   |                  |   |           |  
|Current assets:                                                                                                                                                            |  |              |           |   |                  |   |           |  
|Cash and cash equivalents                                                                                                                                                  |  | $            | 258,251   |   |                  | $ | 306,390   |  
|Cash collateral for reacquisition of agreement                                                                                                                             |  |              |          |   |                  |   | 300,631   |  
|Accounts receivable, net of allowance for chargebacks of $1,381 in 2009 and $1,258 in 2008 and credit returns of $406 in 2009 and $695 in 2008                             |  |              | 43,175    |   |                  |   | 37,011    |  
|Related party receivable                                                                                                                                                   |  |              | 2,710     |   |                  |   | 1,915     |  
|Inventories                                                                                                                                                                |  |              | 53,669    |   |                  |   | 63,506    |  
|Prepaid expenses and other current assets                                                                                                                                  |  |              | 20,881    |   |                  |   | 33,795    |  
|Deferred income taxes                                                                                                                                                      |  |              | 64,882    |   |                  |   | 65,585    |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|Total current assets                                                                                                                                                       |  |              | 443,568   |   |                  |   | 808,833   |  
|Property, plant and equipment, net                                                                                                                                         |  |              | 227,188   |   |                  |   | 166,720   |  
|Investment in Drug Source Company, LLC                                                                                                                                     |  |              | 11,543    |   |                  |   | 10,183    |  
|Intangible assets, net of accumulated amortization of $124,537 in 2009 and $105,113 in 2008                                                                                |  |              | 164,564   |   |                  |   | 175,291   |  
|Goodwill                                                                                                                                                                   |  |              | 241,361   |   |                  |   | 241,361   |  
|Other non-current assets                                                                                                                                                   |  |              | 37,129    |   |                  |   | 36,196    |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|Total assets                                                                                                                                                               |  | $            | 1,125,353 |   |                  | $ | 1,438,584 |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|                                                                                                                                                                           |  |             
|Liabilities and equity                                                                                                                                                     |  |              |           |   |                  |   |           |  
|Current liabilities:                                                                                                                                                       |  |              |           |   |                  |   |           |  
|Accounts payable                                                                                                                                                           |  | $            | 26,060    |   |                  | $ | 39,142    |  
|Accrued liabilities                                                                                                                                                        |  |              | 56,804    |   |                  |   | 53,020    |  
|Accrued litigation costs                                                                                                                                                   |  |              | 57,689    |   |                  |   | 57,635    |  
|Reacquisition payable                                                                                                                                                      |  |              |          |   |                  |   | 268,000   |  
|Income taxes payable                                                                                                                                                       |  |              | 414       |   |                  |   | 679       |  
|Deferred revenue                                                                                                                                                           |  |              | 3,196     |   |                  |   | 4,209     |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|Total current liabilities                                                                                                                                                  |  |              | 144,163   |   |                  |   | 422,685   |  
|Deferred income taxes, non-current                                                                                                                                         |  |              | 66,670    |   |                  |   | 62,685    |  
|Long-term portion of deferred revenue                                                                                                                                      |  |              | 6,625     |   |                  |   | 8,223     |  
|Other non-current liabilities                                                                                                                                              |  |              | 14,430    |   |                  |   | 15,519    |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|Total liabilities                                                                                                                                                          |  |              | 231,888   |   |                  |   | 509,112   |  
|Equity                                                                                                                                                                     |  |              |           |   |                  |   |           |  
|Stockholders equity:                                                                                                                                                      |  |              |           |   |                  |   |           |  
|Common stock$0.001 par value; 100,000,000 shares authorized; 40,118,806 and 40,066,451 shares issued and outstanding at June 30,
2009 and December 31, 2008, respectively |  |              | 40        |   |                  |   | 40        |  
|Additional paid-in capital                                                                                                                                                 |  |              | 1,208,767 |   |                  |   | 1,203,092 |  
|Accumulated deficit                                                                                                                                                        |  |              | (319,043  | ) |                  |   | (272,689  | )
|Accumulated other comprehensive income (loss)                                                                                                                              |  |              | 646       |   |                  |   | (971      | )
|Less treasury stock, at cost (20,500 shares at June 30, 2009 and 0 shares at December 31, 2008)                                                                            |  |              | (874      | ) |                  |   |          |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|Total stockholders equity                                                                                                                                                 |  |              | 889,536   |   |                  |   | 929,472   |  
|Noncontrolling interest                                                                                                                                                    |  |              | 3,929     |   |                  |   |          |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|Total equity                                                                                                                                                               |  |              | 893,465   |   |                  |   | 929,472   |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  
|Total liabilities and equity                                                                                                                                               |  | $            | 1,125,353 |   |                  | $ | 1,438,584 |  
|                                                                                                                                                                           |  |              |           |   |                  |   |           |  

See notes to condensed consolidated financial statements.



3



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##### Table of Contents

Abraxis BioScience, Inc.

Condensed Consolidated Statements of Operations



|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------- |  | ------------------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                          |  | Three Months EndedJune 30,            |         |   | Six Months EndedJune 30, |  
|                                                                          |  | 2009                                  |         |   | 2008                     |   |         | 2009 |  |   | 2008    |  
|                                                                          |  | (unaudited)                           |        
|                                                                          |  | (in thousands, except per share data) |        
|Abraxane revenue                                                          |  | $                                     | 75,155  |   |                          | $ | 73,833  |      |  | $ | 145,773 |   |  | $ | 153,765 |  
|Other revenue                                                             |  |                                       | 9,974   |   |                          |   | 3,789   |      |  |   | 11,938  |   |  |   | 5,999   |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net revenue                                                               |  |                                       | 85,129  |   |                          |   | 77,622  |      |  |   | 157,711 |   |  |   | 159,764 |  
|Cost of sales                                                             |  |                                       | 14,616  |   |                          |   | 9,945   |      |  |   | 23,743  |   |  |   | 18,552  |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Gross profit                                                              |  |                                       | 70,513  |   |                          |   | 67,677  |      |  |   | 133,968 |   |  |   | 141,212 |  
|Operating expenses:                                                       |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Research and development                                                  |  |                                       | 39,901  |   |                          |   | 21,693  |      |  |   | 74,878  |   |  |   | 42,515  |  
|Selling, general and administrative                                       |  |                                       | 47,056  |   |                          |   | 53,535  |      |  |   | 89,559  |   |  |   | 98,835  |  
|Litigation costs                                                          |  |                                       |        |   |                          |   | 57,388  |      |  |   |        |   |  |   | 57,388  |  
|Acquired in-process research and development                              |  |                                       |        |   |                          |   | 13,900  |      |  |   |        |   |  |   | 13,900  |  
|Amortization of intangible assets                                         |  |                                       | 9,957   |   |                          |   | 9,958   |      |  |   | 19,907  |   |  |   | 19,611  |  
|Equity in net (income) loss of Drug Source Company, LLC                   |  |                                       | (329    | ) |                          |   | (24     | )    |  |   | (1,360  | ) |  |   | 224     |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total operating expenses                                                  |  |                                       | 96,585  |   |                          |   | 156,450 |      |  |   | 182,984 |   |  |   | 232,473 |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Loss from operations                                                      |  |                                       | (26,072 | ) |                          |   | (88,773 | )    |  |   | (49,016 | ) |  |   | (91,261 | )
|Interest income                                                           |  |                                       | 741     |   |                          |   | 4,577   |      |  |   | 1,887   |   |  |   | 11,112  |  
|Other income (expense)                                                    |  |                                       | 937     |   |                          |   | 252     |      |  |   | (503    | ) |  |   | 539     |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Loss before income taxes                                                  |  |                                       | (24,394 | ) |                          |   | (83,944 | )    |  |   | (47,632 | ) |  |   | (79,610 | )
|(Benefit) provision for income taxes                                      |  |                                       | (114    | ) |                          |   | 199     |      |  |   | (51     | ) |  |   | 224     |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net loss                                                                  |  | $                                     | (24,280 | ) |                          | $ | (84,143 | )    |  | $ | (47,581 | ) |  | $ | (79,834 | )
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net loss attributable to noncontrolling interest                          |  |                                       | (847    | ) |                          |   |        |      |  |   | (1,227  | ) |  |   |        |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net loss attributable to common shareholders                              |  | $                                     | (23,433 | ) |                          | $ | (84,143 | )    |  | $ | (46,354 | ) |  | $ | (79,834 | )
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Basic and diluted net loss per common share                               |  | $                                     | (0.58   | ) |                          | $ | (2.10   | )    |  | $ | (1.16   | ) |  | $ | (2.00   | )
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|                                                                          |  |                                       |         |  
|The composition of stock-based compensation included above is as follows: |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Cost of sales                                                             |  | $                                     | 87      |   |                          | $ | 114     |      |  | $ | 190     |   |  | $ | 165     |  
|Research and development                                                  |  |                                       | 1,093   |   |                          |   | 1,209   |      |  |   | 2,285   |   |  |   | 2,399   |  
|Selling, general and administrative                                       |  |                                       | 2,184   |   |                          |   | 2,786   |      |  |   | 5,303   |   |  |   | 4,539   |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|                                                                          |  | $                                     | 3,364   |   |                          | $ | 4,109   |      |  | $ | 7,778   |   |  | $ | 7,103   |  
|                                                                          |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

See notes to condensed consolidated financial statements.



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Abraxis BioScience, Inc.

Condensed Consolidated Statements of Cash Flows



|                                                                                          |  |                          |          |   |      |   |         |  
|----------------------------------------------------------------------------------------- |  | ------------------------ | -------- | - | ---- | - | ------- | -
|                                                                                          |  | Six Months EndedJune 30, |         
|                                                                                          |  | 2009                     |          |   | 2008 |  
|                                                                                          |  | (unaudited)              |         
|                                                                                          |  | (in thousands)           |         
|Cash flows from operating activities:                                                     |  |                          |          |   |      |   |         |  
|Net loss                                                                                  |  | $                        | (47,581  | ) |      | $ | (79,834 | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                          |          |   |      |   |         |  
|Depreciation                                                                              |  |                          | 7,589    |   |      |   | 6,829   |  
|Amortization of intangible assets                                                         |  |                          | 19,907   |   |      |   | 19,611  |  
|Amortization of deferred revenue                                                          |  |                          | (2,611   | ) |      |   | (20,669 | )
|Acquired in-process research and development charge                                       |  |                          |         |   |      |   | 13,900  |  
|Other than temporary loss on marketable securities                                        |  |                          | 2,944    |   |      |   |        |  
|Gain on derivatives                                                                       |  |                          | (1,202   | ) |      |   |        |  
|Equity-based compensation                                                                 |  |                          | 7,778    |   |      |   | 7,103   |  
|Deferred income taxes                                                                     |  |                          | 721      |   |      |   |        |  
|Equity in net (income) loss of Drug Source Company, LLC, net of dividends received        |  |                          | (1,360   | ) |      |   | 224     |  
|Gain on sale of marketable securities                                                     |  |                          | (792     | ) |      |   |        |  
|Gain on sale of subsidiary                                                                |  |                          | (2,667   | ) |      |   |        |  
|Changes in operating assets and liabilities:                                              |  |                          |          |   |      |   |         |  
|Accounts receivable, net                                                                  |  |                          | (5,905   | ) |      |   | 11,859  |  
|Cash collateral for reacquisition of agreement                                            |  |                          | 300,631  |   |      |   |        |  
|Related party, net                                                                        |  |                          | (795     | ) |      |   | (7,544  | )
|Inventories                                                                               |  |                          | 9,814    |   |      |   | 6,127   |  
|Prepaid expenses and other current assets                                                 |  |                          | 9,516    |   |      |   | 6,454   |  
|Accounts payable and accrued expenses                                                     |  |                          | (13,731  | ) |      |   | (30,621 | )
|Reacquisition payable                                                                     |  |                          | (268,000 | ) |      |   |        |  
|Accrued litigation costs                                                                  |  |                          |         |   |      |   | 57,388  |  
|Other non-current assets and liabilities                                                  |  |                          | 760      |   |      |   | (2,020  | )
|                                                                                          |  |                          |          |   |      |   |         |  
|Net cash provided by (used in) operating activities                                       |  |                          | 15,016   |   |      |   | (11,193 | )
|                                                                                          |  |                         
|Cash flows from investing activities:                                                     |  |                          |          |   |      |   |         |  
|Purchases of property, plant and equipment                                                |  |                          | (68,382  | ) |      |   | (13,248 | )
|Cash paid for acquisition, net of cash acquired                                           |  |                          |         |   |      |   | (14,998 | )
|Purchases of investments and marketable securities                                        |  |                          |         |   |      |   | (9,393  | )
|Proceeds from sale of subsidiary                                                          |  |                          | 2,046    |   |      |   |        |  
|Proceeds from sale of marketable securities                                               |  |                          | 3,676    |   |      |   |        |  
|                                                                                          |  |                          |          |   |      |   |         |  
|Net cash used in investing activities                                                     |  |                          | (62,660  | ) |      |   | (37,639 | )
|                                                                                          |  |                         
|Cash flows from financing activities:                                                     |  |                          |          |   |      |   |         |  
|Proceeds from the exercise of stock options                                               |  |                          | 285      |   |      |   | 639     |  
|Purchases of treasury stock                                                               |  |                          | (874     | ) |      |   |        |  
|                                                                                          |  |                          |          |   |      |   |         |  
|Net cash (used in) provided by financing activities                                       |  |                          | (589     | ) |      |   | 639     |  
|Effect of exchange rates on cash and cash equivalents                                     |  |                          | 94       |   |      |   | 37      |  
|                                                                                          |  |                          |          |   |      |   |         |  
|Net decrease in cash and cash equivalents                                                 |  |                          | (48,139  | ) |      |   | (48,156 | )
|Cash and cash equivalents, beginning of period                                            |  |                          | 306,390  |   |      |   | 705,125 |  
|                                                                                          |  |                          |          |   |      |   |         |  
|Cash and cash equivalents, end of period                                                  |  | $                        | 258,251  |   |      | $ | 656,969 |  
|                                                                                          |  |                          |          |   |      |   |         |  

See notes to condensed consolidated financial statements



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##### Table of Contents

ABRAXIS BIOSCIENCE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2009

(Unaudited)

(1) Summary of Significant Accounting Policies

Basis of Presentation

Abraxis BioScience, Inc. (formerly known as New Abraxis, 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 and six months ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ended December 31, 2009 or other future periods. The balance sheet information at December 31, 2008 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 which we are the primary beneficiary. Additionally, the condensed consolidated statements include our investment in Drug Source Company, LLC, which is
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 as prescribed by FASB Interpretation 46R,Consolidation of Variable Interest Entities, an Interpretation of Accounting Research
Bulletin No. 51 (FIN 46R). The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entitys expected losses, receives a majority of its expected residual returns, or both, as a result of
holding variable interest. 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 one variable
interest entity, Dithera, Inc., and since we are the primary beneficiary, the variable interest entity 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.

Cash and Cash Equivalents

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

Cash Collateral for Reacquisition of Agreement

In November 2008, we entered into an agreement with AstraZeneca UK Limited under which, subject to the terms and conditions of the
agreement, we re-acquired the exclusive rights to market Abraxane® in the United States. As part of the agreement, we
provided $286 million ($268 million for termination payment and $18 million for estimated final payments due under the Co-Promotion Agreement) in irrevocable standby letters of credit to secure the future payments under the agreement. The letters of
credits were collateralized by $300.6 million of cash, which was included in Cash collateral for reacquisition of agreement in the balance sheet as of December 31, 2008. In March 2009, we made the final payments under the agreement
and were released from our obligation to maintain the cash collateral.



6



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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.

Fair Value Measurement

We adopted the provisions of the Financial Accounting Standards Boards (FASB) Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (SFAS 157), effective January 1,
2008, for our financial assets and liabilities and effective January 1, 2009, for non-financial assets and liabilities that are not remeasured on a recurring basis. Under this standard, 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. The adoption of SFAS 157 did not have a material impact on our consolidated financial
statements.

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 June 30, 2009 and 2008, we did not recognize any other than temporary impairment loss. For the six months ended June 30, 2009 and 2008, we recorded other than temporary losses
of $2.9 million and $0 respectively, on available for sale securities whose values, based on market quotation, had declined below their carrying value. The loss is included in Other income and expense in the condensed consolidated
statements of operations.

Treasury Stock

We account for treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or
charged to paid in capital in excess of par value using the average-cost method.

Recent Accounting Pronouncements

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which amends SFAS 107,
Disclosures about Fair Value of Financial Instruments, and APB Opinion 28, Interim Financial Reporting, to extend disclosure about the fair value of financial instruments to interim reporting periods in addition to annual financial
statements. We adopted FSP FAS 107-1 and APB 28-1 beginning April 1, 2009. As FSP FAS 107-1 and APB 28-1 provide only disclosure requirements, the adoption of this standard did not have a material impact on our consolidated financial
statements.

In April 2009, the FASB issued FASB Staff Position (FSP) FAS No. 115-2, Recognition and Presentation of
Other-Than-Temporary Impairments (FSP FAS 115-2), which revises and expands the guidance concerning the recognition and measurement of other-than-temporary impairments of debt securities classified as available for sale or held to maturity. FSP
FAS 115-2 also amends the disclosures concerning such impairments for both debt and equity securities. Adoption of FSP FAS 115-2 is effective for us beginning April 1, 2009 and did not have a material impact on our consolidated financial
statements.

In May 2009, the FASB issued FAS 165, Subsequent Events (FAS 165), to provide guidance on accounting for and
disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Entities are required to disclose the date through which subsequent events have been evaluated and the basis for
that date. FAS 165 was adopted beginning April 1, 2009, and did not have a material impact on our consolidated financial statements.

In June 2009, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R), (FAS 167). This Statement amends certain guidance in Interpretation 46(R) for determining whether an entity is a variable
interest entity and requires additional disclosures about an enterprises involvement in variable interest entities. FAS 167 will be effective for us beginning January 1, 2010 and will affect the method in which we assess our variable
interest in an entity. Adoption of FAS 167 is not expected to have a material impact on our consolidated financial statements.



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In June 2009, the FASB issued Statement No. 168, The FASB Codificationand the Hierarchy of Generally Accepted Accounting Principles (FAS 168)a replacement of FASB Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles. FAS 168 establishes the FASB Accounting Standards
Codification (Codification) as the single source of authoritative accounting principles recognized by the FASB for nongovernmental entities and will supersede all existing FASB, AICPA, and Emerging Issues Task Force (EITF) pronouncements and related
literatures. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Henceforth, future changes to GAAP will be issued in
the form of Accounting Standards Updates which will serve to update the Codification itself. FAS 168 is effective for us beginning July 1, 2009 and had no impact on our consolidated financial statements.

(2) Earnings Per Share Information

Basic (loss)
income per common share is computed by dividing net (loss) income attributable to common shareholders by the weighted-average number of common shares outstanding during the reporting period. Diluted (loss) income per common share is computed by
dividing net (loss) income 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. Calculations of basic and diluted loss per common share information are based on the following (in thousands, except per share data):



|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------ |  | ------------------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                             |  | Three Months EndedJune 30,            |         |   | Six Months EndedJune 30, |  
|                                                             |  | 2009                                  |         |   | 2008                     |   |         | 2009 |  |   | 2008    |  
|                                                             |  | (in thousands, except per share data) |        
|Basic and dilutive numerator:                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net loss attributable to common shareholders                 |  | $                                     | (23,433 | ) |                          | $ | (84,143 | )    |  | $ | (46,354 | ) |  | $ | (79,834 | )
|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Denominator:                                                 |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Weighted average common shares outstandingbasic and diluted |  |                                       | 40,113  |   |                          |   | 40,018  |      |  |   | 40,100  |   |  |   | 40,007  |  
|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net loss per common sharebasic and diluted                  |  | $                                     | (0.58   | ) |                          | $ | (2.10   | )    |  | $ | (1.16   | ) |  | $ | (2.00   | )
|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Potentially dilutive shares not included                     |  |                                       | 189     |   |                          |   | 199     |      |  |   | 219     |   |  |   | 190     |  
|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

(3) Inventories

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



|                |  |                |        |                  |   |       
|--------------- |  | -------------- | ------ | ---------------- | - | ------
|                |  | June 30,  2009 |        | December 31,2008
|                |  | (in thousands)
|Finished goods  |  | $              | 8,502  |                  | $ | 14,477
|Work in process |  |                | 10,328 |                  |   | 9,615 
|Raw materials   |  |                | 34,839 |                  |   | 39,414
|                |  |                |        |                  |   |       
|                |  | $              | 53,669 |                  | $ | 63,506
|                |  |                |        |                  |   |       

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 considered the market, pricing and demand for competing products, its 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 June 30,
2009 or December 31, 2008 was pending regulatory approval.



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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.

(4) Investments in Expression Pathology

In April 2009, we acquired preferred stock in Expression Pathology, Inc. (EPI), providing us with a 52% ownership interest, for an aggregate purchase price of $6.7 million. EPI is a developer of technology for tissue
protein analysis and is developing proprietary, personalized medicine clinical assays that relate measurement of protein biomarkers to specific patient treatment decisions. EPIs proprietary technologies include the Liquid Tissue® technology for the extraction of proteins from formalin-fixed tissue and the Director technology for the laser microdissection of tissue. We accounted for EPI as a business combination and the assets and liabilities of EPI are consolidated in our
unaudited condensed consolidated financial statements from the date of acquisition.

The following table summarizes the estimated fair
values of the assets acquired and liabilities recorded after our investment at the acquisition date on April 1, 2009 (in thousands):



|                                                |  |   |       
|----------------------------------------------- |  | - | ------
|Current assets (including cash of $6.6 million) |  | $ | 6,675 
|Property, plant and equipment                   |  |   | 72    
|Intangible and other long-term assets           |  |   | 9,543 
|                                                |  |   |       
|Total assets                                    |  | $ | 16,290
|                                                |  |   |       
|                                                | 
|Current liabilities                             |  | $ | 621   
|Deferred tax liability                          |  |   | 3,580 
|Other long-term liabilities                     |  |   | 89    
|                                                |  |   |       
|Total liabilities                               |  |   | 4,290 
|Non-controlling interest                        |  |   | 5,275 
|Abraxis investment in Expression Pathology     |  |   | 6,725 
|                                                |  |   |       
|Total liabilities and equity                    |  | $ | 16,290
|                                                |  |   |       

Acquired intangible assets of $9.5 million represent technologies used by EPI to develop new
assays for use in testing drug efficacy of certain drugs with certain cancer types. The intangible assets are all definite-lived intangibles and have weighted average lives of approximately 16 years.

The fair value of the 48% noncontrolling interest in EPI was estimated to be $5.3 million at the time of the acquisition and was determined using a cash
flow model. As EPI is a private company, the fair value is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement as defined in SFAS 157.

(5) Fair Value

Fair value measurement

In accordance with SFAS No. 157, Fair Value Measurements, 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. SFAS 157 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



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|        |  |   |  |                                                                                                                                                                                                             
|------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |  
|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.

The following fair value hierarchy table presents information about each major category of our
financial assets measured at fair value on a recurring basis as of June 30, 2009. All of the investments below reflect strategic investments.



|                             |  |                                                             |       |                                            |   |                                        |  |                            |       |  |   |       
|---------------------------- |  | ----------------------------------------------------------- | ----- | ------------------------------------------ | - | -------------------------------------- |  | -------------------------- | ----- |  | - | ------
|                             |  | Basis of fair value measurements                            |       |                                           
|                             |  | Quoted prices inactive markets foridentical assets(Level 1) |       | Significant otherobservableinputs(Level 2) |   | Significantunobservableinputs(Level 3) |  | Balance as ofJune 30, 2009
|                             |  | (in thousands)                                             
|Marketable equity securities |  | $                                                           | 3,548 |                                            | $ |                                       |  | $                          |      |  | $ | 3,548 
|Marketable debt securities   |  |                                                             |      |                                            |   |                                       |  |                            | 9,193 |  |   | 9,193 
|Derivatives                  |  |                                                             |      |                                            |   | 2,049                                  |  |                            |      |  |   | 2,049 
|                             |  |                                                             |       |                                            |   |                                        |  |                            |       |  |   |       
|Total                        |  | $                                                           | 3,548 |                                            | $ | 2,049                                  |  | $                          | 9,193 |  | $ | 14,790
|                             |  |                                                             |       |                                            |   |                                        |  |                            |       |  |   |       

Gains or losses considered to be temporary are included in accumulated other comprehensive loss at
each measurement date. Other than temporary losses are included in other expense in the statement of operations.

The level 3 marketable
securities represent convertible notes that were purchased in May and November 2008, with the exception of embedded features that required separate accounting as derivatives pursuant to Statement 133 and are subject to Level 2 fair value
measurements. 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.

There were no re-measurements to fair value during the six months ended
June 30, 2009 of assets and liabilities that were not measured at fair value on a recurring basis.

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 June 30, 2009 and December 31, 2008, the carrying amounts of items comprising current assets and current liabilities approximate fair
value due to the short-term nature of these financial instruments.

(6) Related Party Transactions

Receivables from related parties totaled $2.7 million and $1.9 million at June 30, 2009 and December 31, 2008, respectively. Receivables from
related parties at June 30, 2009 included $1.9 million in receivables from Drug Source Company and $0.8 million in receivables from APP Pharmaceuticals, Inc. (APP). At December 31, 2008, we had receivables of $1.6 million from Drug Source
Company and $0.3 million from APP.

Transactions with APP Pharmaceuticals

In connection with the separation of APP Pharmaceuticals, Inc. (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 EndedJune 30, |     |      | Six Months EndedJune 30, |     
|                                     |  | 2009                       |     | 2008 |                          |      | 2009 |  | 2008 |      
|                                     |  | (in thousands)             |    
|Other revenue:                       |  |                            |     |      |                          |      |      |  |      |       |  |   |       |  
|Net rental income                    |  | $                          | 647 |      | $                        | 647  |      |  | $    | 1,416 |  | $ | 1,294 |  
|Cost of sales:                       |  |                            |     |      |                          |      |      |  |      |       |  |   |       |  
|Manufacturing and distribution costs |  |                            | 29  |      |                          | 534  |      |  |      | 329   |  |   | 841   |  
|Facility management fees             |  |                            | 750 |      |                          | 750  |      |  |      | 1,250 |  |   | 1,500 |  
|Selling, general and administrative  |  |                            |     |      |                          |      |      |  |      |       |  |   |       |  
|Net general and administrative costs |  |                            | 295 |      |                          | (189 | )    |  |      | 658   |  |   | (564  | )



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(7) Accrued Liabilities

Accrued liabilities consisted of the following at:



|                              |  |                |        |                  |   |       
|----------------------------- |  | -------------- | ------ | ---------------- | - | ------
|                              |  | June 30,  2009 |        | December 31,2008
|                              |  | (in thousands)
|Sales and marketing           |  | $              | 15,691 |                  | $ | 13,125
|Payroll and employee benefits |  |                | 12,983 |                  |   | 14,797
|Legal                         |  |                | 26,225 |                  |   | 17,632
|Milestone                     |  |                |       |                  |   | 3,950 
|Other                         |  |                | 1,905  |                  |   | 3,516 
|                              |  |                |        |                  |   |       
|                              |  | $              | 56,804 |                  | $ | 53,020
|                              |  |                |        |                  |   |       

(8) Income Taxes

Our effective tax rate for the three and six months ended June 30, 2009 was 0.5% and 0.1%, respectively, resulting in a benefit for income taxes. The rate was computed based on special state tax rules that
were used to compute our taxable base on our gross receipts. The effective tax rate is different from the statutory rate primarily as a result of the application of a valuation allowance against the net income tax benefit for the year.

As of June 30, 2009, we had $5.5 million of gross unrecognized tax benefits for uncertain tax positions taken in our income tax return. This tax
benefit is included in Other non-current liabilities in the accompanying condensed consolidated balance sheet. During the six months ended June 30, 2009, the gross amount of our unrecognized tax benefits did not change from the
amount included in our balance sheet at December 31, 2008. The majority of the unrecognized tax benefits, if and when recognized, would affect our effective tax rate. We do not anticipate that any of the unrecognized tax benefits will reverse
in the next twelve months.

We recognize interest and penalties related to unrecognized tax benefits in our income tax expense. At
June 30, 2009, we had no accruable interest or penalties. We do not have any returns currently subject to examination by tax authorities or any open audits.

(9) Comprehensive (Loss) Income

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



|                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                           |  | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |  
|                                                           |  | 2009                       |         |   | 2008                     |   |         | 2009 |  |   | 2008    |  
|                                                           |  | (in thousands)             |        
|Foreign currency translation adjustments                   |  | $                          | 821     |   |                          | $ | (397    | )    |  | $ | (1,204  | ) |  | $ | 2,028   |  
|Unrealized gain (loss) on marketable equity securities     |  |                            | 727     |   |                          |   | (1,142  | )    |  |   | 2,821   |   |  |   | (3,636  | )
|                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Other comprehensive income (loss)                          |  |                            | 1,548   |   |                          |   | (1,539  | )    |  |   | 1,617   |   |  |   | (1,608  | )
|Net loss                                                   |  |                            | (24,280 | ) |                          |   | (84,143 | )    |  |   | (47,581 | ) |  |   | (79,834 | )
|                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Comprehensive loss                                         |  | $                          | (22,732 | ) |                          | $ | (85,682 | )    |  | $ | (45,964 | ) |  | $ | (81,442 | )
|                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|                                                           |  |                            |         |  
|Comprehensive loss attributable to noncontrolling interest |  | $                          | (847    | ) |                          | $ |        |      |  | $ | (1,227  | ) |  | $ |        |  
|                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Comprehensive loss attributable to common shareholders     |  | $                          | (21,885 | ) |                          | $ | (85,682 | )    |  | $ | (44,737 | ) |  | $ | (81,442 | )
|                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  



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At June 30, 2009 and 2008, we had cumulative foreign currency translation gain adjustments of $0.1
million and $2.2 million, respectively. In addition, at June 30, 2009 and 2008, we had cumulative unrealized gains of $0.5 million and unrealized loss adjustments of $3.1 million, respectively on marketable securities.

(10) Equity

A summary of changes in equity for the
six months ended June 30, 2009 is provided below:



|                                                             |  |                      |  |        |    |                           |   |           |               |  |   |                           |   |  |                                            |          |   |                         |   |        |             |  |   |        |   |  |   |         |  
|------------------------------------------------------------ |  | -------------------- |  | ------ | -- | ------------------------- | - | --------- | ------------- |  | - | ------------------------- | - |  | ------------------------------------------ | -------- | - | ----------------------- | - | ------ | ----------- |  | - | ------ | - |  | - | ------- | -
|                                                             |  | Stockholders Equity |  |        |    |                           |   |           |              
|                                                             |  | Common Stock         |  |        |    |                           |   |           |               |  |   |                           |   |  |                                            |          |   |                         |   |       
|                                                             |  | Shares               |  | Amount |    | AdditionalPaid-In Capital |   |           | TreasuryStock |  |   | RetainedEarnings(Deficit) |   |  | AccumulatedOtherComprehensive(Loss) Income |          |   | Non-controllingInterest |   |        | TotalEquity | 
|                                                             |  | (in thousands)       | 
|Balance at December 31, 2008                                 |  | 40,066               |  | $      | 40 |                           | $ | 1,203,092 |               |  | $ |                          |   |  | $                                          | (272,689 | ) |                         | $ | (971   | )           |  | $ |       |   |  | $ | 929,472 |  
|Exercise of stock options                                    |  | 5                    |  |        |   |                           |   | 285       |               |  |   |                          |   |  |                                            |         |   |                         |   |       |             |  |   |       |   |  |   | 285     |  
|Net settlement of vested restricted stocks                   |  | 47                   |  |        |   |                           |   | (1,704    | )             |  |   |                          |   |  |                                            |         |   |                         |   |       |             |  |   |       |   |  |   | (1,704  | )
|Stock-based compensation                                     |  |                     |  |        |   |                           |   | 7,094     |               |  |   |                          |   |  |                                            |         |   |                         |   |       |             |  |   |       |   |  |   | 7,094   |  
|Repurchase of common stock                                   |  |                     |  |        |   |                           |   |          |               |  |   | (874                      | ) |  |                                            |         |   |                         |   |       |             |  |   |       |   |  |   | (874    | )
|Noncontrolling interest related to business combination      |  |                     |  |        |   |                           |   |          |               |  |   |                          |   |  |                                            |         |   |                         |   |       |             |  |   | 5,156  |   |  |   | 5,156   |  
|Comprehensive loss:                                          |  |                     |  |        |   |                           |   |          |               |  |   |                          |   |  |                                            |         |   |                         |   |       |             |  |   |       |   |  |   |         |  
|Net loss                                                     |  |                     |  |        |   |                           |   |          |               |  |   |                          |   |  |                                            | (46,354  | ) |                         |   |       |             |  |   | (1,227 | ) |  |   | (47,581 | )
|Unrealized gain on available-for-sale securities, net of tax |  |                     |  |        |   |                           |   |          |               |  |   |                          |   |  |                                            |         |   |                         |   | 2,821  |             |  |   |       |   |  |   | 2,821   |  
|Foreign currency translation adjustments                     |  |                     |  |        |   |                           |   |          |               |  |   |                          |   |  |                                            |         |   |                         |   | (1,204 | )           |  |   |       |   |  |   | (1,204  | )
|                                                             |  |                      |  |        |    |                           |   |           |               |  |   |                           |   |  |                                            |          |   |                         |   |        |             |  |   |        |   |  |   |         |  
|Comprehensive loss                                           |  |                     |  |        |   |                           |   |          |               |  |   |                          |   |  |                                            |         |   |                         |   |       |             |  |   |       |   |  |   | (45,964 | )
|                                                             |  |                      |  |        |    |                           |   |           |               |  |   |                           |   |  |                                            |          |   |                         |   |        |             |  |   |        |   |  |   |         |  
|Balance at June 30, 2009                                     |  | 40,118               |  | $      | 40 |                           | $ | 1,208,767 |               |  | $ | (874                      | ) |  | $                                          | (319,043 | ) |                         | $ | 646    |             |  | $ | 3,929  |   |  | $ | 893,465 |  
|                                                             |  |                      |  |        |    |                           |   |           |               |  |   |                           |   |  |                                            |          |   |                         |   |        |             |  |   |        |   |  |   |         |  

(11) Stock Repurchase Program

On April 20, 2009, we announced that our board of directors approved a program to repurchase up to $100 million of our common stock. Share repurchases may be commenced, suspended or discontinued at any time
without prior notice. During the three months ended June 30, 2009, we repurchased 20,500 shares of common stock for an aggregate amount of $0.9 million pursuant to the stock repurchase program. We plan to retire the shares repurchased under the
program.

(12) Sale of Assets

In March
2009, we sold the shares of our wholly owned subsidiary, Abraxis BioScience Switzerland GmbH, which held the plant, property and equipment located in Barbengo, Switzerland. We received $2.0 million in proceeds from the sale and recorded a gain of
approximately $2.7 million, of which $0.6 million were gains from foreign currency exchange. The gain is included in selling, general and administrative expenses in the condensed consolidated statements of operations for the six months ended
June 30, 2009. We initially recorded an impairment charge of $9.2 million for these assets in the third quarter of 2008.

(13) Proposed Spin-off

In January 2009, we announced that our board of directors approved a plan to spin-off its newly-formed subsidiary, Abraxis Health, Inc.
as a new independent, stand-alone company holding a significant portion our drug discovery, manufacturing and development business. 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, 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. In addition, in connection with the proposed spin-off, we plan to contribute $25 million
of our cash balance to Abraxis Health as well as provide a $200 million secured credit facility to Abraxis Health.



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##### Table of Contents

The proposed spin-off is subject to a number of closing conditions, including 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. 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 an amended registration statement on Form 10 with the SEC on August 4, 2009. Stockholders are urged to read Abraxis Healths Form 10
registration statement, including any amendments or supplements thereto, carefully because it contains and will contain important information about the proposed spin-off.

(14) Contingencies

Certain legal proceedings in which we are involved are discussed in Note 13 to
the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2008. There have been no material developments to the legal proceedings discussed in our 2008 Annual Report.

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.

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.

(15) Subsequent Events

We have evaluated material subsequent events requiring recognition or disclosure through
August 7, 2009, the date of issuance of our consolidated financial statements.



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##### Table of Contents

|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 global launch of Abraxane®;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | 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;
| | - |  | -------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | 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;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | 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, 2008, 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 the nab® technology platform. This nab® technology platform is the first to exploit the tumors biology against itself, taking advantage of an albumin-specific,
receptor-mediated transport system and allowing the delivery of a drug from the vascular space across the blood vessel wall to the underlying tumor tissue. Abraxane® is the first clinical and commercial validation of our nab® 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 our nab®
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.



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##### Table of Contents

Proposed 2009 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 a significant portion of our
drug discovery, pilot manufacturing and development business. 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, 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. In addition, in connection with the proposed spin-off, we plan to contribute $25 million of our cash balance to Abraxis Health as well as provide a $200 million
secured credit facility to Abraxis Health.

The proposed spin-off is subject to a number of closing conditions, including 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. 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 an amended registration statement on Form 10 with the SEC on August 4, 2009. Stockholders are urged to read Abraxis
Healths Form 10 registration statement, including any amendments or supplements thereto, carefully because it contains and will contain important information about the proposed spin-off.

Investments in Expression Pathology

In April 2009, we acquired preferred stock in Expression Pathology, Inc. (EPI), providing us with a 52% ownership interest, for an aggregate purchase price of $6.7 million. EPI is a developer of technology for tissue protein analysis and is
developing proprietary, personalized medicine clinical assays that relate measurement of protein biomarkers to specific patient treatment decisions. EPIs proprietary technologies include the Liquid Tissue® technology for the extraction of proteins from formalin-fixed tissue and the Director technology for the laser microdissection of tissue. We accounted for EPI as a business combination and the assets and liabilities of EPI is consolidated in our
unaudited condensed consolidated financial statements from the date of acquisition.

Stock Repurchase Program

On April 20, 2009, we announced that our board of directors approved a program to repurchase up to $100 million of our 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. During the three months ended June 30, 2009, we repurchased 20,500 shares of common stocks for
$0.9 million pursuant to the stock repurchase program.

Universal Shelf Registration Statement

On June 18, 2008, we filed a registration statement on Form S-3, filed 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.



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##### Table of Contents

RESULTS OF OPERATIONS

Three Months Ended June 30, 2009 and June 30, 2008

The following table sets forth the results of our operations
for the three months ended June 30, 2009 and 2008, and forms the basis for the following discussion of our operating activities:



|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|------------------------------------------------------------ |  | ------------------------------------------------ | ------- | - | ------------------------------------------ | - | ------- | - |  | - | ------- | - |  | ---- | --
|                                                             |  | Three Months Ended June 30,                      |         |   | Change Favorable(Unfavorable)2009 vs. 2008 |  
|                                                             |  | 2009                                             |         |   | 2008                                       |   |         | $ |  |   | %       |  
|                                                             |  | (unaudited, in thousands, except per share data) |        
|Consolidated statements of operations data:                  |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Revenue:                                                     |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Abraxane                                                     |  | $                                                | 75,155  |   |                                            | $ | 73,833  |   |  | $ | 1,322   |   |  | 2    | % 
|Other                                                        |  |                                                  | 9,974   |   |                                            |   | 3,789   |   |  |   | 6,185   |   |  | 163  | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Net revenue                                                  |  |                                                  | 85,129  |   |                                            |   | 77,622  |   |  |   | 7,507   |   |  | 10   | % 
|Cost of sales                                                |  |                                                  | 14,616  |   |                                            |   | 9,945   |   |  |   | (4,671  | ) |  | (47  | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Gross profit                                                 |  |                                                  | 70,513  |   |                                            |   | 67,677  |   |  |   | 2,836   |   |  | 4    | % 
|Operating expenses:                                          |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Research and development                                     |  |                                                  | 39,901  |   |                                            |   | 21,693  |   |  |   | (18,208 | ) |  | (84  | )%
|Selling, general and administrative                          |  |                                                  | 47,056  |   |                                            |   | 53,535  |   |  |   | 6,479   |   |  | 12   | % 
|Litigation costs                                             |  |                                                  |        |   |                                            |   | 57,388  |   |  |   | 57,388  |   |  | 100  | % 
|Acquired in-process research and development                 |  |                                                  |        |   |                                            |   | 13,900  |   |  |   | 13,900  |   |  | 100  | % 
|Amortization of intangible assets                            |  |                                                  | 9,957   |   |                                            |   | 9,958   |   |  |   | 1       |   |  |     |   
|Equity in net income of Drug Source Co., LLC                 |  |                                                  | (329    | ) |                                            |   | (24     | ) |  |   | 305     |   |  | 1271 | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Total operating expenses                                     |  |                                                  | 96,585  |   |                                            |   | 156,450 |   |  |   | 59,865  |   |  | 38   | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Loss from operations                                         |  |                                                  | (26,072 | ) |                                            |   | (88,773 | ) |  |   | 62,701  |   |  | 71   | % 
|Interest income                                              |  |                                                  | 741     |   |                                            |   | 4,577   |   |  |   | (3,836  | ) |  | (84  | )%
|Other income                                                 |  |                                                  | 937     |   |                                            |   | 252     |   |  |   | 685     |   |  | 272  | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Loss before income taxes                                     |  |                                                  | (24,394 | ) |                                            |   | (83,944 | ) |  |   | 59,550  |   |  | 71   | % 
|(Benefit) provision for income taxes                         |  |                                                  | (114    | ) |                                            |   | 199     |   |  |   | 313     |   |  | 157  | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Net loss                                                     |  | $                                                | (24,280 | ) |                                            | $ | (84,143 | ) |  | $ | 59,863  |   |  | 71   | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Net loss attributable to non controlling interest            |  |                                                  | (847    | ) |                                            |   |        |   |  |   | (847    | ) |  |     |   
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Net loss attributable to controlling interest                |  | $                                                | (23,433 | ) |                                            | $ | (84,143 | ) |  | $ | 60,710  |   |  | 72   | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Basic and diluted net loss per common share                  |  | $                                                | (0.58   | ) |                                            | $ | (2.10   | ) |  |   |         |   |  |      |   
|Basic and diluted weighted-average common shares outstanding |  |                                                  | 40,113  |   |                                            |   | 40,018  |   |  |   |         |   |  |      |   

Net Revenue

Net revenue for the three months ended June 30, 2009 increased by $7.5 million, or 9.7% to $85.1 million as compared to $77.6 million for the same period in 2008. Included in net revenue for the three months
ended June 30, 2008 was $9.1 million of recognized deferred revenue related to the co-promotion agreement ended in January 2009.

Abraxane revenue for the three months ended June 30, 2009 increased $1.4 million to $75.2 million compared to $73.8 million for the same period in 2008. Excluding the recognition of deferred revenue associated with the co-promotion
agreement, total Abraxane revenue for the three months ended June 30, 2009 increased by $10.5 million, or 16.1%, to $75.2 million as compared to $64.7 million for the same period in the previous year. The increase was due to higher volume and
average net selling price in the United States, and incremental revenue from global expansion into the China and Australian markets and increased volume in the European Union compared to the same period in the prior year.

Other revenue for the three months ended June 30, 2009 increased by $6.2 million or 163.2% to $10.0 million compared to $3.8 million for the same
period in 2008 primarily due to certain raw materials sales in the second quarter of 2009.



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##### Table of Contents

Gross Profit

Gross profit for the three months ended June 30, 2009 was $70.5 million, or 82.8% of net revenue, as compared to $67.7 million, or 87.2% of net revenue, for the same period in 2008. The decrease was primarily due
to increased volume of sales of lower margin products, including sales of Abraxane in China and the European Union. Excluding recognized deferred revenue related to the co-promotion agreement, gross profit as a percentage of net revenue for the
three months ended June 30, 2009 was 82.8% as compared to 85.5% for the same period in 2008.

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. The following table summarizes our research and development expenses for the three months
ended June 30, 2009 and 2008:



|                               |  |                             |        |      |   |       
|------------------------------ |  | --------------------------- | ------ | ---- | - | ------
|                               |  | Three Months Ended June 30,
|                               |  | 2009                        |        | 2008
|                               |  | (in thousands)             
|Discovery                      |  | $                           | 4,882  |      | $ | 4,599 
|Drug development               |  |                             | 10,439 |      |   | 6,238 
|Clinical trials                |  |                             | 16,688 |      |   | 3,873 
|Other research and development |  |                             | 7,892  |      |   | 6,983 
|                               |  |                             |        |      |   |       
|                               |  | $                           | 39,901 |      | $ | 21,693
|                               |  |                             |        |      |   |       

Research and development expense for the three months ended June 30, 2009 increased $18.2
million, or 83.9%, to $39.9 million as compared to $21.7 million for the same period in 2008. Over 50% of the increase was due to additional spending on Phase III clinical trials for non-small cell lung cancer, pancreatic cancer and melanoma. The
remainder of the increase is attributable to investment in early stage discovery and other research and development projects.

Selling,
General and Administrative

Selling, general and administrative expense for the three months ended June 30,
2009 decreased $6.4 million to $47.1 million, or 55.3% of net revenue, from $53.5 million, or 69.0% of net revenue, for the same period in 2008. The reacquisition of Abraxane® marketing rights in the U.S. yielded savings due to elimination of commission payments. These savings were partially offset by increased investment in the global
expansion of Abraxane® primarily in China and the European Union, infrastructure build-out costs and increased spending on
U.S. sales and marketing.

Litigation Costs

For the three months ended June 30, 2008, we have accrued litigation costs of $57.4 million for a matter which we are appealing.



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##### Table of Contents

Acquired In-Process Research and Development

In connection with the purchase of Shimoda Biotech (Proprietary) Limited and Platco Technologies (Proprietary) Limited in April 2008, we acquired certain
research and development projects that were required to be expensed in accordance with generally accepted accounting principles. Approximately $13.9 million of the purchase price was expensed as in-process research and development for projects that,
as of the acquisition date, had not yet reached technological or regulatory feasibility and had no alternative future uses in their current states.

Amortization of Intangible Assets

Amortization of intangible assets for the three months ended June 30, 2009 was $9.9
million, the same as for the comparable period in the prior year.

Equity Income in Drug Source Company, LLC

Income from Drug Source Company in the second quarter of 2009 was higher than the corresponding period in 2008 due to lower operating costs and increased
sales volume, which partially offset decreasing margins. Additionally, a $1.6 million adjustment to accounts receivable contributed to higher operating expenses in the second quarter of 2008.

Other Non-Operating Items

Interest
income consisted primarily of interest earned on invested cash. The decrease in interest income for the three months ended June 30, 2009 of $3.8 million was due to lower investment balances and interest rates in 2009 as compared to 2008. For
the three months ended June 30, 2009, the average yield on cash investments was 0.8%.

Net other income increased $0.7 million for the
three months ended June 30, 2009 compared to the same period in 2008 primarily due to gains recognized on the fair value of derivatives.

Provision for Income Taxes

Our effective tax rate for the three months ended June 30, 2009 was approximately 0.5%,
resulting in a benefit for income taxes. The rate is computed based on special state tax rules that were used to compute our taxable base on our gross receipts in certain states. The effective tax rate for the three months ended June 30, 2009
is different from the statutory rate primarily as a result of the application of a valuation allowance against the net income tax benefit for the year.



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##### Table of Contents

RESULTS OF OPERATIONS

Six Months Ended June 30, 2009 and June 30, 2008

The following table sets forth the results of our operations for
the six months ended June 30, 2009 and 2008, and forms the basis for the following discussion of our operating activities:



|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|------------------------------------------------------------ |  | ------------------------------------------------ | ------- | - | ------------------------------------------ | - | ------- | - |  | - | ------- | - |  | ---- | --
|                                                             |  | Six Months Ended June 30,                        |         |   | Change Favorable(Unfavorable)2009 vs. 2008 |  
|                                                             |  | 2009                                             |         |   | 2008                                       |   |         | $ |  |   | %       |  
|                                                             |  | (unaudited, in thousands, except per share data) |        
|Consolidated statements of operations data:                  |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Revenue:                                                     |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Abraxane                                                     |  | $                                                | 145,773 |   |                                            | $ | 153,765 |   |  | $ | (7,992  | ) |  | (5   | )%
|Other                                                        |  |                                                  | 11,938  |   |                                            |   | 5,999   |   |  |   | 5,939   |   |  | 99   | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Net revenue                                                  |  |                                                  | 157,711 |   |                                            |   | 159,764 |   |  |   | (2,053  | ) |  | (1   | )%
|Cost of sales                                                |  |                                                  | 23,743  |   |                                            |   | 18,552  |   |  |   | (5,191  | ) |  | (28  | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Gross profit                                                 |  |                                                  | 133,968 |   |                                            |   | 141,212 |   |  |   | (7,244  | ) |  | (5   | )%
|Operating expenses:                                          |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Research and development                                     |  |                                                  | 74,878  |   |                                            |   | 42,515  |   |  |   | (32,363 | ) |  | (76  | )%
|Selling, general and administrative                          |  |                                                  | 89,559  |   |                                            |   | 98,835  |   |  |   | 9,276   |   |  | 9    | % 
|Litigation costs                                             |  |                                                  |        |   |                                            |   | 57,388  |   |  |   | 57,388  |   |  | 100  | % 
|Acquired in-process research and development                 |  |                                                  |        |   |                                            |   | 13,900  |   |  |   | 13,900  |   |  | 100  | % 
|Amortization of intangible assets                            |  |                                                  | 19,907  |   |                                            |   | 19,611  |   |  |   | (296    | ) |  | (2   | )%
|Equity in net (income) loss of Drug Source Co., LLC          |  |                                                  | (1,360  | ) |                                            |   | 224     |   |  |   | 1,584   |   |  | 707  | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Total operating expenses                                     |  |                                                  | 182,984 |   |                                            |   | 232,473 |   |  |   | 49,489  |   |  | 21   | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Loss from operations                                         |  |                                                  | (49,016 | ) |                                            |   | (91,261 | ) |  |   | 42,245  |   |  | 46   | % 
|Interest income                                              |  |                                                  | 1,887   |   |                                            |   | 11,112  |   |  |   | (9,225  | ) |  | (83  | )%
|Other (expense) income                                       |  |                                                  | (503    | ) |                                            |   | 539     |   |  |   | (1,042  | ) |  | (193 | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Loss before income taxes                                     |  |                                                  | (47,632 | ) |                                            |   | (79,610 | ) |  |   | 31,978  |   |  | 40   | % 
|Provision for income taxes                                   |  |                                                  | (51     | ) |                                            |   | 224     |   |  |   | 275     |   |  | 123  | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Net loss                                                     |  | $                                                | (47,581 | ) |                                            | $ | (79,834 | ) |  | $ | 32,253  |   |  | 40   | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Net loss attributable to non controlling interest            |  |                                                  | (1,227  | ) |                                            |   |        |   |  |   | (1,227  | ) |  |     |   
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Net loss attributable to controlling interest                |  | $                                                | (46,354 | ) |                                            | $ | (79,834 | ) |  | $ | 33,480  |   |  | 42   | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |      |   
|Basic and diluted net loss per common share                  |  | $                                                | (1.16   | ) |                                            | $ | (2.00   | ) |  |   |         |   |  |      |   
|Basic and diluted weighted-average common shares outstanding |  |                                                  | 40,100  |   |                                            |   | 40,007  |   |  |   |         |   |  |      |   

Net Revenue

Net revenue for the six months ended June 30, 2009 decreased by $2.1 million, or 1.3%, to $157.7 million as compared to $159.8 million for the same period in 2008. Included in net revenue for the six months ended
June 30, 2008 was $18.2 million of recognized deferred revenue related to the co-promotion agreement ended in January 2009.

Abraxane
revenue for the six months ended June 30, 2009 decreased $8.0 million to $145.8 million compared to $153.8 million for the same period in 2008. Excluding the recognition of deferred revenue associated with the co-promotion agreement, total
Abraxane revenue for the six months ended June 30, 2009 increased by $10.2 million, or 7.5%, to $145.8 million as compared to $135.6 million for the same period in the previous year. The increase was due to higher volume and average net selling
price in the United States, and incremental revenue from global expansion into the China and Australian markets and increased volume in the European Union compared to the prior year.

Other revenue for the six months ended June 30, 2009 increased by $5.9 million or 99.0% to $11.9 million as compared to $6.0 million for the same
period in 2008 primarily due to certain raw materials sales in the second quarter of 2009.



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Gross Profit

Gross profit for the six months ended June 30, 2009 was $134.0 million, or 84.9% of net revenue, as compared to $141.2 million, or 88.4% of net revenue for the same period in 2008. The decrease was primarily due
to increased volume of sales of lower margin products, including sales of Abraxane in China and the European Union. Excluding recognized deferred revenue related to the co-promotion agreement, gross profit as a percentage of net revenue for the six
months ended June 30, 2009 was 84.9% as compared to 86.9% in 2008.

Research and Development

Research and development expense for the six months ended June 30, 2009 increased $32.4 million, or 76.1%, to $74.9 million as compared to $42.5
million for the same period in 2008. Over 40% of the increase was due to increased spending on Phase III clinical trials for non-small cell lung cancer, pancreatic cancer and melanoma. The remainder is attributable to investment in early stage and
other research and development projects. The following table summarizes our research and development expenses for the six months ended June 30, 2009 and 2008:



|                               |  |                           |        |      |   |       
|------------------------------ |  | ------------------------- | ------ | ---- | - | ------
|                               |  | Six Months Ended June 30,
|                               |  | 2009                      |        | 2008
|                               |  | (in thousands)           
|Discovery                      |  | $                         | 9,367  |      | $ | 7,251 
|Drug development               |  |                           | 19,105 |      |   | 12,047
|Clinical trials                |  |                           | 28,475 |      |   | 10,280
|Other research and development |  |                           | 17,931 |      |   | 12,937
|                               |  |                           |        |      |   |       
|                               |  | $                         | 74,878 |      | $ | 42,515
|                               |  |                           |        |      |   |       

Selling, General and Administrative

Selling, general and administrative expense for the six months ended June 30, 2009 decreased $9.2 million to $89.6 million, or
56.8% of net revenue, from $98.8 million, or 61.9% of net revenue, for the same period in 2008. The reacquisition of Abraxane® marketing rights in the U.S. yielded savings due to the elimination of commission payments partially offset by increased investment in the global expansion of
Abraxane® primarily in China and the European Union, infrastructure build-out costs and increased spending on U.S. sales and
marketing.

Litigation Costs

For the six months ended June 30, 2008, we have accrued litigation costs of $57.4 million for a matter which we are appealing.

Acquired In-Process Research and Development

In connection with the purchase of Shimoda Biotech (Proprietary) Limited and
Platco Technologies (Proprietary) Limited in April 2008, we acquired certain research and development projects that were required to be expensed in accordance with generally accepted accounting principles. Approximately $13.9 million of the purchase
price was expensed as in-process research and development for projects that, as of the acquisition date, had not yet reached technological or regulatory feasibility and had no alternative future uses in their current states.

Amortization of Intangible Assets

Amortization of intangible assets for the six months ended June 30, 2009 was $19.9 million compared to $19.6 million for the same period in the prior year.

Equity Income in Drug Source Company, LLC

Income from Drug Source Company for the six months ended
June 30, 2009 was $1.4 compared to a net loss of $0.2 million for the corresponding period in 2008 due to overall increased sales volume and lower operating costs, which partially offset decreasing margins.

Other Non-Operating Items

Interest
income consisted primarily of interest earned on invested cash. The decrease in interest income for the six months ended June 30, 2009 of $9.2 million was due to lower investment balances and interest rates in 2009 as compared to 2008. For the
six months ended June 30, 2009, the average yield on cash investments was 1.1%.



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Other expense increased $1.0 million for the six months ended June 30, 2009 primarily due to other
than temporary loss on marketable securities partially offset by gains on the sale of marketable securities and increases in the fair value of derivatives.

Provision for Income Taxes

Our effective tax rate for the six months ended June 30, 2009 was
approximately 0.1%, resulting in a benefit for income taxes. The rate is computed based on special state tax rules that were used to compute our taxable base on our gross receipts in certain states. The effective tax rate for the six months ended
June 30, 2009 is different from the statutory rate primarily as a 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:



|                                                            |  |                           |           |   |                  |   |           |  
|----------------------------------------------------------- |  | ------------------------- | --------- | - | ---------------- | - | --------- | -
|                                                            |  | June 30,2009              |           |   | December 31,2008 |  
|                                                            |  | (unaudited, in thousands) |          
|Summary Financial Position                                  |  |                           |           |   |                  |   |           |  
|Cash and cash equivalents                                   |  | $                         | 258,251   |   |                  | $ | 306,390   |  
|Cash collateral for reacquisition of agreement              |  |                           |          |   |                  |   | 300,631   |  
|Working capital                                             |  |                           | 299,405   |   |                  |   | 386,148   |  
|Total assets                                                |  |                           | 1,125,353 |   |                  |   | 1,438,584 |  
|Total equity                                                |  |                           | 893,465   |   |                  |   | 929,472   |  
|                                                            | 
|                                                            |  | Six Months Ended June 30, |          
|                                                            |  | 2009                      |           |   | 2008             |  
|                                                            |  | (unaudited, in thousands) |          
|Summary of Sources and (Uses) of Cash and Cash Equivalents: |  |                           |           |   |                  |   |           |  
|Operating activities                                        |  | $                         | 15,016    |   |                  | $ | (11,193   | )
|Purchases of property, plant and equipment                  |  |                           | (68,382   | ) |                  |   | (13,248   | )
|Cash paid for acquisition, net of cash acquired             |  |                           |          |   |                  |   | (14,998   | )
|Purchases of investments and other marketable securities    |  |                           |          |   |                  |   | (9,393    | )
|Financing activities                                        |  |                           | (589      | ) |                  |   | 639       |  

Sources and Uses of Cash

Operating Activities

Net cash provided by operating activities was $15.0 million for the six
months ended June 30, 2009 compared to net cash used in operating activities of $11.2 million for the same period in 2008. The increase in cash provided by operations of $26.2 million was primarily due to (i) a decrease, in excess of
accruals, for cash collateral for reacquisition of agreement, and (ii) a decrease in related party receivable, inventories, prepaid expenses and accounts payable. These amounts were offset by an increase in accounts receivable.

Investing Activities

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

Net cash used for the acquisition of property, plant and equipment for the six months ended June 30, 2009 totaled $68.4 million. The majority of
this amount related to the purchase of our Costa Mesa research facility and expenditures for the modernization of our Melrose Park, Illinois and Phoenix, Arizona manufacturing facilities. For the six months ended June 30, 2009, we also had
proceeds from the sale of marketable securities of $3.7 million and proceeds of $2.0 million from the sale of our subsidiary in Barbengo, Switzerland.

For the six months ended June 30, 2008, we acquired $13.2 million of property, plant and equipment and we purchased $9.4 million in marketable securities and other investments. Additionally, in 2008, we paid
$15.0 million to acquire Shimoda Biotech and Platco Technologies.



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Financing Activities

Net cash used by financing activities for the six months ended June 30, 2009 included purchases of our common stock on the open market under our share repurchase program and cash received upon the exercise of
stock options.

Net cash provided by financing activities for the six months ended June 30, 2008 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 $25 million of our cash balance to Abraxis Health as well as provide a $200 million secured credit facility to Abraxis
Health. As currently proposed, Abraxis Health would be able to borrow a maximum of $50 million during the first six months following the spin-off and no more than an additional $50 million during the six months thereafter. 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, 2008, we filed a registration statement on Form S-3, filed 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:



| |  |  | expansion of product sales into international markets;
| | - |  | ------------------------------------------------------



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



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



| |  |  | the need for manufacturing expansion and improvement;
| | - |  | -----------------------------------------------------



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



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



| |  |  | 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

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about
Fair Value of Financial Instruments, which amends SFAS 107, Disclosures about Fair Value of Financial Instruments, and APB Opinion 28, Interim Financial Reporting, to extend disclosure about the fair value of financial instruments
to interim reporting periods in addition to annual financial statements. We adopted FSP FAS 107-1 and APB 28-1 beginning April 1, 2009. As FSP FAS 107-1 and APB 28-1 provide only disclosure requirements, the adoption of this standard did
not have a material impact on our consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position (FSP) FAS
No. 115-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2), which revises and expands the guidance concerning the recognition and measurement of other-than-temporary impairments of debt securities
classified as available for sale or held to maturity. FSP FAS 115-2 also amends the disclosures concerning such impairments for both debt and equity securities. Adoption of FSP FAS 115-2 is effective for us beginning April 1, 2009 and did not
have a material impact on our consolidated financial statements.



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In May 2009, the FASB issued FAS 165, Subsequent Events (FAS 165), to provide guidance on
accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Entities are required to disclose the date through which subsequent events have been evaluated
and the basis for that date. FAS 165 was adopted beginning April 1, 2009, and did not have a material impact on our consolidated financial statements.

In June 2009, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R), (FAS 167). This Statement amends certain guidance in Interpretation 46(R) for determining whether an
entity is a variable interest entity and requires additional disclosures about an enterprises involvement in variable interest entities. FAS 167 will be effective for us beginning January 1, 2010 and will affect the method in which we
assess our variable interest in an entity. Adoption of FAS 167 is not expected to have a material impact on our consolidated financial statements.

In June 2009, the FASB issued Statement No. 168, The FASB Codification and the Hierarchy of Generally Accepted Accounting Principles (FAS 168)a replacement of FASB Statement No. 162, The Hierarchy of Generally
Accepted Accounting Principles. FAS 168 establishes the FASB Accounting Standards Codification (Codification) as the single source of authoritative accounting principles recognized by the FASB for nongovernmental entities and will supersede all
existing FASB, AICPA, and Emerging Issues Task Force (EITF) pronouncements and related literatures. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. Henceforth, future changes to GAAP will be issued in the form of Accounting Standards Updates which will serve to update the Codification itself. FAS 168 is effective for us beginning July 1, 2009 and had
no impact 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, Europe, South Africa 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. As of
June 30, 2009, there were no outstanding hedge arrangements.

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 June 30, 2009, we did not recognize any other than temporary impairment loss. For the six months ended June 30, 2009, we realized other than temporary losses of $2.9 million
on available for sale securities whose values, based on market quotation, had declined below their carrying value.



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##### Table of Contents

Interest Rate Risk: As of June 30, 2009, 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 Chief 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 Chief 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 June 30, 2009.

During the
three months ended June 30, 2009, 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.

On April 15, 2009, we completed the transition of our financial accounting and
reporting processes to our new ERP system as part of a phased implementation plan. The new ERP system, which we began developing during 2008, was designed and implemented to separate the Company from the APP Pharmaceuticals, Inc. ERP system. The
implementation of this new ERP system involves changes to our procedures for control over financial reporting. We followed a detailed implementation plan that required significant pre-implementation planning, design and testing. We have also
conducted and will continue to conduct extensive post-implementation review and process modification to ensure that internal controls over financial reporting are properly designed. To date, we have not experienced any significant difficulties in
our processes related to the implementation or operation of the new ERP system.



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##### Table of Contents

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 on our Annual Report on Form 10-K for the year ended December 31, 2008. There have been no material developments to the legal proceedings discussed in our
2008 Annual Report.

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 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, 2008 and six months ended June 30, 2009 and 2008, total Abraxane® revenue was
$335.6 million, $146.2 million and $153.8 million, respectively. Because Abraxane® is our only approved product,
Abraxane® revenue represented approximately 92% and 96% of our revenues for the six months ended June 30, 2009 and year
ended December 31, 2008, 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:



| |  |  | lower prices offered on similar products by other manufacturers, including generic forms of Taxol;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | substitute or alternative products or therapies;
| | - |  | ------------------------------------------------



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



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



| |  |  | interruptions in manufacturing or supply;
| | - |  | -----------------------------------------



| |  |  | changes in the prescribing practices of physicians;
| | - |  | ---------------------------------------------------



| |  |  | changes in third-party reimbursement practices; and
| | - |  | ---------------------------------------------------



| |  |  | 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:



| |  |  | slower than anticipated patient enrollment;
| | - |  | -------------------------------------------



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



| |  |  | adverse events occurring during the clinical trials.
| | - |  | ----------------------------------------------------



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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:



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



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



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



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



| |  |  | the product candidate was not economical to manufacture and commercialize;
| | - |  | --------------------------------------------------------------------------



| |  |  | 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
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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

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 (OIG). Our business is also subject to regulation in foreign 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 foreign 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. The FDA has the



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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 the FDA. 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 FDA and other 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 entered into agreements with Indena SpA and ScinoPharm Taiwan, Ltd. to supply us with paclitaxel, the active pharmaceutical
ingredient in Abraxane®. One of the suppliers is currently in the process of being qualified by the appropriate regulatory
authorities. We believe there currently are more than 15 potential commercial suppliers of paclitaxel raw material. 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, 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®. Many of our competitors have significantly
greater research and development, financial, sales and marketing, manufacturing, regulatory and other resources than us. 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.



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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 the patent infringement lawsuit
with Élan Pharmaceutical Intl Ltd. See Item 1Legal Proceedings above. Litigation or interference proceedings could force us to:



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



| |  |  | pay damages; or
| | - |  | ---------------



| |  |  | 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:



| |  |  | be found during clinical trials to be unsafe or ineffective;
| | - |  | ------------------------------------------------------------



| |  |  | fail to receive necessary regulatory approvals;
| | - |  | -----------------------------------------------



| |  |  | be difficult or uneconomical to produce in commercial quantities;
| | - |  | -----------------------------------------------------------------



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



| |  |  | 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 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
as qui 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, reimbursement by such payors is presently undergoing reform, and there is significant uncertainty at this time how
this will affect sales of certain pharmaceutical products. There is possible U.S. legislation or regulatory action affecting, among other things, pharmaceutical pricing and reimbursement, including under Medicaid and Medicare, and the importation of
prescription drugs that are marketed outside the U.S. and sold at prices that are regulated by governments of various foreign countries.

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. For Abraxane® and any other
proprietary products, which are marketed and sold under new drug applications, manufacturers are required to rebate the greater of (a) 15.1% of the average manufacturer price or (b) the difference between the average manufacturer price and
the lowest manufacturer price for products sold during a specified period.

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.



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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,
Massachusetts, New Mexico 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, Leon O. Moulder, Chief Executive Officer and President, Richard J. Rodgers, Chief Financial Officer, Mary Lynne
Hedley, Executive Vice President of Operations and Chief Scientific Officer, Bruce Wendel, Executive Vice President of Corporate Operations and Development, Dr. Edward Geehr, Executive Vice President of Operations, Marty J. Duvall, Senior Vice
President of Global Marketing and International Commercial Operations, Neil P. Desai, Senior Vice President of Global Research and Development, Lex H.T. Van Der Ploeg, Senior Vice President of Integrative Medicine and Translational Science, and
Nicholas Everett, Chief Scientist, Drug Discovery. 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.



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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 plan to expand our international sales 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:



| |  |  | regulatory requirements of differing nations;
| | - |  | ---------------------------------------------



| |  |  | inadequate protection of intellectual property;
| | - |  | -----------------------------------------------



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



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



| |  |  | currency fluctuations.
| | - |  | ----------------------

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

Risks Relating to Our Separation
from Old Abraxis

We have limited history operating as an independent company, and we may be unable to make the changes necessary to operate
successfully as an independent company.

Prior to the separation, our business was operated by Old Abraxis as part of its broader
corporate organization rather than as a stand-alone company. Old Abraxis assisted us by providing financing and corporate functions such as human resources, information technology, internal audit, tax and accounting functions. APP has no obligation
to provide assistance to us other than certain interim services. These interim services include, among other things, manufacturing services, information technology services, accounting and finance services and human resources support. Because our
business has not recently been operated as an independent company, we cannot assure you that we will be able to successfully implement the changes necessary to operate independently or that we will not incur additional costs operating independently
that would have a negative effect on our business, results of operations and financial condition.

In addition, prior to the separation,
our business was able to leverage Old Abraxis size, relationships and purchasing power in procuring goods, services and technology (including office supplies, computer software licenses and equipment), travel and all employee benefits plans
for which per employee cost was based on number of lives covered. Our separation from Old Abraxis has had a significant impact on the per employee cost for certain coverage such as health care and disability.

We are in the process of creating our own, or engaging third parties to provide, systems and business functions to replace many of the systems and
business functions Old Abraxis provided to us. We will also need to make significant investments to develop our independent ability to operate without Old Abraxis existing operational and administrative infrastructure. These initiatives will
be costly to implement, and we may not be successful in implementing these systems and business functions.

Our historical financial information may not
be representative of our future results as an independent company.

The historical financial information for periods prior to our
separation on November 13, 2007 may not reflect what our results of operations, financial position and cash flows would have been had we been an independent company for those periods. This is primarily because:



| |  |  | our historical and financial information reflects allocations for services historically provided to us by Old Abraxis, which allocations may not reflect the costs
we would have incurred for similar services as an independent company; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our historical and financial information does not reflect changes that we incurred or expect to incur as a result of our separation from Old Abraxis, including
changes in the cost structure, personnel needs, financing and operations of the contributed business as a result of the separation from Old Abraxis and from reduced economies of scale.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, we are now responsible for the additional costs associated with being an independent public company, including costs related to corporate
governance and listed and registered securities. Therefore, our historical financial statements before the separation on November 13, 2007 may not be indicative of our current or future performance as an independent company.



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Our separation from Old Abraxis may present significant challenges.

There is a significant degree of difficulty and management distraction inherent in having separated from Old Abraxis. These difficulties include:



| |  |  | preserving customer, supplier and other important relationships;
| | - |  | ----------------------------------------------------------------



| |  |  | the potential difficulty in retaining key officers and personnel; and
| | - |  | ---------------------------------------------------------------------



| |  |  | separating corporate infrastructure, including systems, insurance, accounting, legal, finance, tax and human resources.
| | - |  | -----------------------------------------------------------------------------------------------------------------------

We anticipate that it generally will take up to 24 months from the separation date to completely separate from Old Abraxis, with the exception of
manufacturing activities which APP will undertake for us and certain lease arrangements, which will last for a period of four or five years. Our separation from Old Abraxis may not be successfully or cost-effectively completed. The failure to do so
could have an adverse effect on our business, financial condition and results of operations.

The process of separating operations could
cause an interruption of, or loss of momentum in, the activities of one or more of our businesses. Members of our senior management may be required to devote considerable amounts of time to this separation process, which will decrease the time they
will have to manage our business, service existing customers, attract new customers and develop new products or strategies. If our senior management is not able to manage effectively the separation process, or if any significant business activities
are interrupted as a result of the separation process, our business could suffer.

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.



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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 beneficially own
approximately 83% 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



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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
83% 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;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | revisions in securities analysts estimates;
| | - |  | --------------------------------------------



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



| |  |  | 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 83% 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.



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|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

On April 20, 2009, we announced that our board of directors approved a program to repurchase up to $100 million of our common stock. Set forth below is information regarding stock repurchases made as of June 30, 2009.



|          |  |                                 |  |                             |  |                                                                              |  |                                                                                       |           
|--------- |  | ------------------------------- |  | --------------------------- |  | ---------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------- | ----------
|Period    |  | Total Number ofShares Purchased |  | Average PricePaid per Share |  | Total Number ofShares Purchased asPart of PubliclyAnnounced Plans orPrograms |  | ApproximateDollar Value ofShares that MayYet to BePurchased Underthe Plans
orPrograms
|June 4-11 |  |                                 |  |                             |  |                                                                              |  |                                                                                       |           
|June 2009 |  | 20,500                          |  | 42.59                       |  | 20,500                                                                       |  | $                                                                                     | 99,000,000



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

None.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.



|ITEM 6. | EXHIBITS
|------- | --------

The exhibits are as set forth in the
Exhibit Index.



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##### Table of Contents

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/ RICHARD J. RODGERSRichard J. RodgersSenior Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)


Date: August 7, 2009



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EXHIBIT INDEX



|              |  |                                                                                                                                                                                                                                                                                                                
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | 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)          



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##### Table of Contents

|              |  |                                                                                                                                                                                                                                                                                                                                                                                     
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                         
|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)                                                              
|              | 
|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)                                                                                                                   



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##### Table of Contents

|              |  |                                                                                                                                                                                                                                                                                       
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                           
|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.                                                                                                                                                                                     
|              | 
|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.
|- | ---------------



40