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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, 2008



| ̈ | 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller 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   ̈    Non-accelerated filer  x    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, 2008, the registrant had 40,049,067 shares of $0.001 par value common stock outstanding.









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##### Table of Contents

Abraxis BioScience, Inc.

INDEX



|                              |  |                                                                                                                  |  |     
|----------------------------- |  | ---------------------------------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                                                  |  | Page
|PART I. Financial Information |  |                                                                                                                 
|                              |  |                                                                                                                 
|Item 1.                       |  | Financial Statements (Unaudited)                                                                                 |  | 3   
|                              |  |                                                                                                                 
|                              |  | Condensed consolidated and combined balance sheets  June 30, 2008 and December 31, 2007                         |  | 3   
|                              |  |                                                                                                                 
|                              |  | Condensed consolidated and combined statements of operations  Three and six months ended June 30, 2008 and 2007 |  | 4   
|                              |  |                                                                                                                 
|                              |  | Condensed consolidated and combined statements of cash flows  Six months ended June 30, 2008 and 2007           |  | 5   
|                              |  |                                                                                                                 
|                              |  | Notes to unaudited condensed consolidated and combined financial statements  June 30, 2008                      |  | 6   
|                              |  |                                                                                                                 
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                            |  | 13  
|                              |  |                                                                                                                 
|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                                                                                                              



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PART I. FINANCIAL INFORMATION



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

Abraxis BioScience, Inc.

Condensed Consolidated and Combined Balance Sheets

(in thousands, except share data)



|                                                                                                                                                                           |  |              |           |   |                  |   |          
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | - | ---------------- | - | ---------
|                                                                                                                                                                           |  | June 30,2008 |           |   | December 31,2007
|                                                                                                                                                                           |  | (unaudited)  |           |   |                 
|Assets                                                                                                                                                                     |  |              |           |   |                  |   |          
|Current assets:                                                                                                                                                            |  |              |           |   |                  |   |          
|Cash and cash equivalents                                                                                                                                                  |  | $            | 656,969   |   |                  | $ | 705,125  
|Accounts receivable, net of chargebacks of $998 in 2008 and $1,172 in 2007 and credit returns of $136 in 2008 and $414 in 2007                                             |  |              | 32,192    |   |                  |   | 43,944   
|Related party receivable                                                                                                                                                   |  |              | 2,516     |   |                  |   | 1,958    
|Inventories                                                                                                                                                                |  |              | 67,641    |   |                  |   | 73,677   
|Prepaid expenses and other current assets                                                                                                                                  |  |              | 14,421    |   |                  |   | 18,572   
|Deferred income taxes                                                                                                                                                      |  |              | 58,562    |   |                  |   | 33,696   
|                                                                                                                                                                           |  |              |           |   |                  |   |          
|Total current assets                                                                                                                                                       |  |              | 832,301   |   |                  |   | 876,972  
|Property, plant and equipment, net                                                                                                                                         |  |              | 152,644   |   |                  |   | 145,120  
|Investment in Drug Source Company, LLC                                                                                                                                     |  |              | 9,051     |   |                  |   | 9,275    
|Intangible assets, net                                                                                                                                                     |  |              | 193,984   |   |                  |   | 205,231  
|Goodwill                                                                                                                                                                   |  |              | 241,361   |   |                  |   | 241,361  
|Other non-current assets                                                                                                                                                   |  |              | 33,147    |   |                  |   | 24,296   
|                                                                                                                                                                           |  |              |           |   |                  |   |          
|Total assets                                                                                                                                                               |  | $            | 1,462,488 |   |                  | $ | 1,502,255
|                                                                                                                                                                           |  |              |           |   |                  |   |          
|                                                                                                                                                                           |  |             
|Liabilities and stockholders equity                                                                                                                                       |  |              |           |   |                  |   |          
|Current liabilities:                                                                                                                                                       |  |              |           |   |                  |   |          
|Accounts payable                                                                                                                                                           |  | $            | 26,454    |   |                  | $ | 33,579   
|Accrued liabilities                                                                                                                                                        |  |              | 44,113    |   |                  |   | 54,927   
|Accrued litigation costs                                                                                                                                                   |  |              | 58,257    |   |                  |   |         
|Accounts payable to related parties                                                                                                                                        |  |              |          |   |                  |   | 6,986    
|Income taxes payable                                                                                                                                                       |  |              |          |   |                  |   | 5,010    
|Deferred revenue                                                                                                                                                           |  |              | 42,501    |   |                  |   | 41,289   
|                                                                                                                                                                           |  |              |           |   |                  |   |          
|Total current liabilities                                                                                                                                                  |  |              | 171,325   |   |                  |   | 141,791  
|Deferred income taxes                                                                                                                                                      |  |              | 57,262    |   |                  |   | 32,396   
|Long-term portion of deferred revenue                                                                                                                                      |  |              | 99,257    |   |                  |   | 121,138  
|Other non-current liabilities                                                                                                                                              |  |              | 14,844    |   |                  |   | 9,543    
|                                                                                                                                                                           |  |              |           |   |                  |   |          
|Total liabilities                                                                                                                                                          |  |              | 342,688   |   |                  |   | 304,868  
|                                                                                                                                                                           |  |             
|Stockholders equity:                                                                                                                                                      |  |              |           |   |                  |   |          
|Common stock$0.001 par value; 100,000,000 shares authorized; 40,027,978 and 39,993,684 shares issued and outstanding at June 30,
2008 and December 31, 2007, respectively |  |              | 40        |   |                  |   | 40       
|Additional paid-in capital                                                                                                                                                 |  |              | 1,196,316 |   |                  |   | 1,192,461
|Accumulated deficit/retained earnings                                                                                                                                      |  |              | (75,752   | ) |                  |   | 4,082    
|Accumulated other comprehensive (loss) income                                                                                                                              |  |              | (804      | ) |                  |   | 804      
|                                                                                                                                                                           |  |              |           |   |                  |   |          
|Total stockholders equity                                                                                                                                                 |  |              | 1,119,800 |   |                  |   | 1,197,387
|                                                                                                                                                                           |  |              |           |   |                  |   |          
|Total liabilities and stockholders equity                                                                                                                                 |  | $            | 1,462,488 |   |                  | $ | 1,502,255
|                                                                                                                                                                           |  |              |           |   |                  |   |          

See notes to condensed consolidated and combined financial statements.



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Abraxis BioScience, Inc.

Condensed Consolidated and Combined Statements of Operations



|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------- |  | ------------------------------------- | ------- | - | ------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                          |  | Three Months Ended June 30,           |         |   | Six Months Ended June 30, |  
|                                                                          |  | 2008                                  |         |   | 2007                      |   |         | 2008 |  |   | 2007    |  
|                                                                          |  | (unaudited)                           |        
|                                                                          |  | (in thousands, except per share data) |        
|Abraxane revenue                                                          |  | $                                     | 73,833  |   |                           | $ | 78,670  |      |  | $ | 153,765 |   |  | $ | 149,553 |  
|Other revenue                                                             |  |                                       | 3,789   |   |                           |   | 4,547   |      |  |   | 5,999   |   |  |   | 5,557   |  
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net revenue                                                               |  |                                       | 77,622  |   |                           |   | 83,217  |      |  |   | 159,764 |   |  |   | 155,110 |  
|Cost of sales                                                             |  |                                       | 9,945   |   |                           |   | 6,899   |      |  |   | 18,552  |   |  |   | 14,558  |  
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Gross profit                                                              |  |                                       | 67,677  |   |                           |   | 76,318  |      |  |   | 141,212 |   |  |   | 140,552 |  
|Operating expenses:                                                       |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Research and development                                                  |  |                                       | 21,693  |   |                           |   | 16,947  |      |  |   | 42,515  |   |  |   | 32,660  |  
|Selling, general and administrative                                       |  |                                       | 52,666  |   |                           |   | 73,209  |      |  |   | 97,966  |   |  |   | 122,247 |  
|Litigation costs                                                          |  |                                       | 58,257  |   |                           |   |        |      |  |   | 58,257  |   |  |   |        |  
|Acquired in-process research and development                              |  |                                       | 13,900  |   |                           |   |        |      |  |   | 13,900  |   |  |   |        |  
|Amortization of acquired intangible assets                                |  |                                       | 9,958   |   |                           |   | 9,653   |      |  |   | 19,611  |   |  |   | 19,305  |  
|Equity in net (income) loss of Drug Source Company, LLC                   |  |                                       | (24     | ) |                           |   | (1,178  | )    |  |   | 224     |   |  |   | (1,896  | )
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Total operating expense                                                   |  |                                       | 156,450 |   |                           |   | 98,631  |      |  |   | 232,473 |   |  |   | 172,316 |  
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Loss from operations                                                      |  |                                       | (88,773 | ) |                           |   | (22,313 | )    |  |   | (91,261 | ) |  |   | (31,764 | )
|Interest income and other                                                 |  |                                       | 4,829   |   |                           |   | 43      |      |  |   | 11,651  |   |  |   | 339     |  
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Loss before income taxes                                                  |  |                                       | (83,944 | ) |                           |   | (22,270 | )    |  |   | (79,610 | ) |  |   | (31,425 | )
|Provision (benefit) for income taxes                                      |  |                                       | 199     |   |                           |   | (8,299  | )    |  |   | 224     |   |  |   | (11,783 | )
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net loss                                                                  |  | $                                     | (84,143 | ) |                           | $ | (13,971 | )    |  | $ | (79,834 | ) |  | $ | (19,642 | )
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Basic and diluted net loss per common share                               |  | $                                     | (2.10   | ) |                           | $ | (0.35   | )    |  | $ | (2.00   | ) |  | $ | (0.49   | )
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|                                                                          |  |                                       |         |  
|The composition of stock-based compensation included above is as follows: |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Cost of sales                                                             |  | $                                     | 114     |   |                           | $ | 412     |      |  | $ | 165     |   |  | $ | 927     |  
|Research and development                                                  |  |                                       | 1,209   |   |                           |   | 1,218   |      |  |   | 2,399   |   |  |   | 3,612   |  
|Selling, general and administrative                                       |  |                                       | 2,786   |   |                           |   | 2,325   |      |  |   | 4,539   |   |  |   | 5,919   |  
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|                                                                          |  | $                                     | 4,109   |   |                           | $ | 3,955   |      |  | $ | 7,103   |   |  | $ | 10,458  |  
|                                                                          |  |                                       |         |   |                           |   |         |      |  |   |         |   |  |   |         |  

See notes to condensed consolidated and combined financial statements.



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Abraxis BioScience, Inc.

Condensed Consolidated and Combined Statements of Cash Flows



|                                                                                   |  |                          |         |   |      |   |         |  
|---------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                   |  | Six Months EndedJune 30, |        
|                                                                                   |  | 2008                     |         |   | 2007 |  
|                                                                                   |  | (unaudited)              |        
|                                                                                   |  | (in thousands)           |        
|Cash flows from operating activities:                                              |  |                          |         |   |      |   |         |  
|Net loss                                                                           |  | $                        | (79,834 | ) |      | $ | (19,642 | )
|Adjustments to reconcile net loss to net cash used in operating activities:        |  |                          |         |   |      |   |         |  
|Depreciation and amortization                                                      |  |                          | 6,829   |   |      |   | 4,430   |  
|Amortization of acquired intangible assets                                         |  |                          | 19,611  |   |      |   | 19,305  |  
|Amortization of deferred revenue                                                   |  |                          | (20,669 | ) |      |   | (19,538 | )
|Acquired in-process research and development charge                                |  |                          | 13,900  |   |      |   |        |  
|Stock-based compensation                                                           |  |                          | 7,103   |   |      |   | 10,458  |  
|Deferred income taxes                                                              |  |                          |        |   |      |   | (7,784  | )
|Equity in net loss (income) of Drug Source Company, LLC, net of dividends received |  |                          | 224     |   |      |   | (1,896  | )
|Changes in operating assets and liabilities:                                       |  |                          |         |   |      |   |         |  
|Accounts receivable, net                                                           |  |                          | 11,859  |   |      |   | (21,936 | )
|Related party receivable                                                           |  |                          | (558    | ) |      |   | (1      | )
|Inventories                                                                        |  |                          | 6,127   |   |      |   | 1,190   |  
|Prepaid expenses and other current assets                                          |  |                          | 6,454   |   |      |   | (3,170  | )
|Accounts payable and accrued expenses                                              |  |                          | (31,490 | ) |      |   | 20,821  |  
|Accrued litigation costs                                                           |  |                          | 58,257  |   |      |   |        |  
|Related party payables                                                             |  |                          | (6,986  | ) |      |   |        |  
|Other non-current assets and liabilities                                           |  |                          | (2,020  | ) |      |   | (1,200  | )
|                                                                                   |  |                          |         |   |      |   |         |  
|Net cash used in operating activities                                              |  |                          | (11,193 | ) |      |   | (18,963 | )
|                                                                                   |  |                         
|Cash flows from investing activities:                                              |  |                          |         |   |      |   |         |  
|Purchases of property, plant and equipment                                         |  |                          | (13,248 | ) |      |   | (16,382 | )
|Cash paid for acquisition, net of cash acquired                                    |  |                          | (14,998 | ) |      |   |        |  
|Purchases of investments and marketable securities                                 |  |                          | (9,393  | ) |      |   | (1,783  | )
|                                                                                   |  |                          |         |   |      |   |         |  
|Net cash used in investing activities                                              |  |                          | (37,639 | ) |      |   | (18,165 | )
|                                                                                   |  |                         
|Cash flows from financing activities:                                              |  |                          |         |   |      |   |         |  
|Net proceeds from the exercise of stock options                                    |  |                          | 639     |   |      |   |        |  
|Net transactions with parent company                                               |  |                          |        |   |      |   | 37,097  |  
|                                                                                   |  |                          |         |   |      |   |         |  
|Net cash provided by financing activities                                          |  |                          | 639     |   |      |   | 37,097  |  
|Effect of exchange rates on cash                                                   |  |                          | 37      |   |      |   | (77     | )
|                                                                                   |  |                          |         |   |      |   |         |  
|Net decrease in cash and cash equivalents                                          |  |                          | (48,156 | ) |      |   | (108    | )
|Cash and cash equivalents, beginning of period                                     |  |                          | 705,125 |   |      |   | 525     |  
|                                                                                   |  |                          |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                           |  | $                        | 656,969 |   |      | $ | 417     |  
|                                                                                   |  |                          |         |   |      |   |         |  

See notes to condensed consolidated financial statements



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##### Table of Contents

ABRAXIS BIOSCIENCE, INC.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

June 30, 2008

(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,
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 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 exploits 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 this nab technology platform. We own the worldwide rights to Abraxane®, a 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.

The accompanying unaudited condensed consolidated and combined 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, 2008 are not necessarily indicative of the results that may be expected for the year ended December 31, 2008 or other future periods. The balance sheet information at December 31, 2007 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. All material intercompany balances and
transactions have been eliminated in consolidation and combination and certain balances in prior periods have been reclassified to conform to the presentation adopted in the current period.

Separation

On November 13,
2007, Abraxis BioScience, Inc. (Old Abraxis) was separated into two independent publicly-traded companies: one holding the former Abraxis Pharmaceutical Products business (which is referred to as the hospital-based business);
and the other holding the former Abraxis Oncology and Abraxis Research businesses (which is referred to as the proprietary business). Following the separation, the proprietary business changed its name from New Abraxis, Inc. to Abraxis
BioScience, Inc. and the hospital-based business is operated under the name APP Pharmaceuticals, Inc. Unless the context requires otherwise, references to Abraxis, New Abraxis, we, us or
our refer to Abraxis BioScience, Inc. (formerly New Abraxis, Inc.) and its subsidiaries, including its operating subsidiary Abraxis BioScience, LLC; references to APP or APP LLC refer to APP Pharmaceuticals, Inc.
and its subsidiaries, including its operating subsidiary APP Pharmaceuticals, LLC ; references to Old Abraxis refer to Abraxis BioScience, Inc. prior to the separation; and references to the separation or spin-off
refer to the transactions in which the proprietary business and hospital-based business of Old Abraxis were separated into two independent public companies. References to the historical assets, liabilities, products, businesses or activities of our
company are generally intended to refer to the historical assets, liabilities, products, businesses or activities of the business as it was conducted as part of Old Abraxis prior to the separation.

In connection with the separation, stockholders of Old Abraxis as of November 13, 2007
received one share of our company for every four shares of Old Abraxis held as of that date. In addition, in connection with the separation, we entered into a separation and distribution agreement that provided for, among other things, the principal
corporate transactions required to effect the separation and other specified terms governing our relationship with APP after the spin-off. We also entered into various agreements with APP, including (i) a transition services agreement pursuant
to which we and APP agreed to continue to provide each other with various services on an interim, transitional basis, for periods up to 24 months depending on the particular service; (ii) a manufacturing agreement whereby we and APP agreed to
manufacture Abraxane® and certain other products and to provide other manufacturing-related services for a period of four or five years; (iii) an employees matters agreement providing
for each companys respective obligations to employees and former employees who are or were associated with their respective businesses, and for other employment and employee benefit matters; (iv) various real estate leases; and (v) a
tax allocation agreement.



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##### Table of Contents

Basis of Consolidation and Combination

The accompanying condensed consolidated and combined financial statements reflect the consolidated operations of Abraxis BioScience, Inc. and its
subsidiaries as an independent, publicly-traded company as of and subsequent to November 13, 2007 and a combined reporting entity comprising the assets and liabilities that constituted the proprietary business of Old Abraxis for periods prior
to November 13, 2007. The condensed consolidated and combined financial statements include the assets, liabilities and results of operations of our wholly-owned operating subsidiary, Abraxis BioScience, LLC; direct and indirect wholly-owned
subsidiaries of Abraxis BioScience, LLC, Abraxis BioScience Switzerland GmbH, Abraxis BioScience Canada, Inc., VivoRx AutoImmune, Inc., Jefferson XIII, LLC, Chicago BioScience, LLC, Shimoda Biotech (Proprietary) Limited and Platco Technologies
(Proprietary) Limited; as well as majority-owned subsidiaries of Abraxis BioScience, LLC, Resuscitation Technologies, LLC and Cenomed BioSciences, LLC. Additionally, the condensed consolidated and combined 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 and combination.

The combined financial statements for periods prior to and including November 13, 2007 may not be indicative of our future performance and do not necessarily reflect what our condensed consolidated and combined
results of operations, financial position, and cash flows would have been had we operated as an independent, publicly-traded company during the periods presented, including changes in our capitalization as a result of the separation. To the extent
that an asset, liability, revenue or expense is directly associated with our company, it is reflected in the accompanying consolidated and combined financial statements. Certain general corporate overhead and other expenses for periods prior to the
separation have been allocated to us. Management believes such allocations were reasonable; however, they may not be indicative of our actual results had we been operating as an independent, publicly traded company for the periods presented. See
Note 4Related Party Transactions for further information regarding allocated expenses.

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.

Available For Sale
Securities

We determine the appropriate classification of our investments in debt and equity securities at the time of purchase and
re-evaluate such determinations at each balance sheet date. We consider our marketable equity investments available-for-sale as defined in Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain
Investments in Debt and Equity Securities. Accordingly, these investments are recorded at fair value and the unrealized gains and losses, net of tax, are included in the determination of comprehensive income and reported in stockholders
equity. As of June 30, 2008, we had $12.4 million included in Other non-current assets in marketable equity securities that were designated as available-for-sale securities. At December 31, 2007, we had $3.7 million in
available for sale equity securities. For the three and six months ended June 30, 2008 and 2007, we had no realized loss on available-for-sale securities.

In May 2008, we purchased notes having an aggregate principal amount of $5.0 million from a privately held company. The notes are convertible senior secured notes due 2018 and earns interest at nine percent per annum.
The notes are convertible into an ownership interest of up to 49% of the privately held company. In addition, at the option of the privately held company, we may be required to purchase additional notes having an aggregate principal amount of up to
$5.0 million within six months from the closing date. The $5.0 million convertible notes are designated as available for sale securities and are measured at fair value each reporting period.

We review periodically our available-for-sale securities 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. As of June 30, 2008, we believe that the cost basis of our available-for-sale securities was recoverable in all material respects.

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



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financial assets and liabilities. 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.

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                              
|        |  |  
|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, 2008:



|                              |  |                                                             |       |                                            |   |                                        |  |                            |       |  |   |       
|----------------------------- |  | ----------------------------------------------------------- | ----- | ------------------------------------------ | - | -------------------------------------- |  | -------------------------- | ----- |  | - | ------
|                              |  | Basis of fair value measurements                            |       |                                           
|                              |  | Quoted prices inactive markets foridentical assets(Level 1) |       | Significant otherobservableinputs(Level
2) |   | Significantunobservableinputs(Level 3) |  | Balance as ofJune 30, 2008
|                              |  | (in thousands)                                             
|Assets:                       |  |                                                             |       |                                            |   |                                        |  |                            |       |  |   |       
|Available-for-sale securities |  | $                                                           | 7,512 |                                            | $ |                                       |  | $                          | 4,901 |  | $ | 12,413
|                              |  |                                                             |       |                                            |   |                                        |  |                            |       |  |   |       
|Total                         |  | $                                                           | 7,512 |                                            | $ |                                       |  | $                          | 4,901 |  | $ | 12,413
|                              |  |                                                             |       |                                            |   |                                        |  |                            |       |  |   |       

The level 3 asset represents senior secured convertible notes that were purchase in May 2008. The
value of the senior secured convertible notes at June 30, 2008, approximates their purchase price.

There were no re-measurements to
fair value during the three months ended June 30, 2008 of financial assets and liabilities that are not measured at fair value on a recurring basis.

Recent Accounting Pronouncements

In December 2007, the FASB issued Statement No. 141(R),
Business Combination (SFAS 141R) and Statement No. 160, Accounting and Reporting of Noncontrolling Interest in Consolidated Financial Statements, an Amendment of ARB No. 51 (SFAS 160). These new
standards will significantly change the accounting for and reporting of business combination transactions and noncontrolling (minority) interests consolidated financial statements. SFAS 141R and SFAS 160 are required to be adopted simultaneously and
are effective for the first annual reporting period beginning on or after December 15, 2008. Earlier application is not permitted. SFAS 141R and SFAS 160 could have a significant impact on our accounting for future business combinations and
other business arrangements after the implementation of these statements.

In December 2007, the FASB ratified EITF No. 07-1, 
Accounting for Collaborative Agreements (EITF 07-1). EITF 07-1 provides guidance regarding financial statement presentation and disclosure of collaborative arrangements. EITF 07-1 will be applicable to arrangements we may
enter into regarding development and commercialization of products and product candidates. EITF 07-1 is effective for us as of January 1, 2009, and its adoption is not expected to have a material impact on our consolidated results of operations
or financial position.

(2) Earnings Per Share Information

Basic loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted loss per common share is computed by dividing net loss by
the weighted-average number of common shares used for the basic calculations plus any potentially dilutive shares for the portion of the year that the shares were outstanding, unless the impact is anti-dilutive. For the three and six months ended
June 30, 2007, basic and diluted loss per share were computed using the number of shares of our common stock outstanding after the



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separation on November 13, 2007. All potentially dilutive employee stock awards were excluded from the computation of diluted loss per common share for
all periods, as the effect on net loss per share was anti-dilutive. Calculations of basic and diluted loss per common share information are based on the following:



|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------ |  | ------------------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                             |  | Three Months EndedJune 30,            |         |   | Six Months EndedJune 30, |  
|                                                             |  | 2008                                  |         |   | 2007                     |   |         | 2008 |  |   | 2007    |  
|                                                             |  | (in thousands, except per share data) |        
|Basic and dilutive numerator:                                |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net loss                                                     |  | $                                     | (84,143 | ) |                          | $ | (13,971 | )    |  | $ | (79,834 | ) |  | $ | (19,642 | )
|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Denominator:                                                 |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Weighted average common shares outstandingbasic and diluted |  |                                       | 40,018  |   |                          |   | 39,990  |      |  |   | 40,007  |   |  |   | 39,990  |  
|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net loss per common sharebasic and diluted                  |  | $                                     | (2.10   | ) |                          | $ | (0.35   | )    |  | $ | (2.00   | ) |  | $ | (0.49   | )
|                                                             |  |                                       |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Potentially dilutive shares not included                     |  |                                       | 199     |   |                          |   |        |      |  |   | 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 30,2008   |        |   | December 31,2007 |  
|                |  | (in thousands) |       
|Finished goods  |  | $              | 11,280 |   |                  | $ | 1,072  |  
|Work in process |  |                | 10,200 |   |                  |   | 9,274  |  
|Raw materials   |  |                | 47,046 |   |                  |   | 64,553 |  
|                |  |                |        |   |                  |   |        |  
|                |  |                | 68,526 |   |                  |   | 74,899 |  
|Reserve         |  |                | (885   | ) |                  |   | (1,222 | )
|                |  |                |        |   |                  |   |        |  
|                |  | $              | 67,641 |   |                  | $ | 73,677 |  
|                |  |                |        |   |                  |   |        |  

Inventories consist of products currently approved for marketing. From time to time, 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. As of June 30, 2008 and December 31, 2007, capitalized inventory products pending regulatory
approval were immaterial.

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) Related Party Transactions

Receivables from related parties totaled $2.5 million and $2.0 million at June 30, 2008 and December 31, 2007, respectively, and payables to related parties totaled $7.0 million at December 31, 2007. Receivables from related
parties at June 30, 2008 included $1.5 million in receivables from APP and $1.0 million in receivables from Drug Source Company. At December 31, 2007, we had receivables of $2.0 million from Drug Source Company and a $7.0 million payable
to APP.

Transactions with APP Pharmaceuticals, Inc.

In connection with the separation 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



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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 and combined statement of operations are summarized in the following table:



|                                     |  |                            |      |                          |      |   |      |  |   |       |   |  |   |  
|------------------------------------ |  | -------------------------- | ---- | ------------------------ | ---- | - | ---- |  | - | ----- | - |  | - | -
|                                     |  | Three Months EndedJune 30, |      | Six Months EndedJune 30,
|                                     |  | 2008                       |      |                          | 2007 |   | 2008 |  |   | 2007 
|                                     |  | (in thousands)            
|Other revenue:                       |  |                            |      |                          |      |   |      |  |   |       |   |  |   |  
|Net rental income                    |  | $                          | 647  |                          |      | $ |     |  | $ | 1,294 |   |  | $ | 
|Cost of sales:                       |  |                            |      |                          |      |   |      |  |   |       |   |  |   |  
|Manufacturing and distribution costs |  |                            | 534  |                          |      |   |     |  |   | 841   |   |  |   | 
|Facility management fees             |  |                            | 750  |                          |      |   |     |  |   | 1,500 |   |  |   | 
|Selling, general and administrative  |  |                            |      |                          |      |   |      |  |   |       |   |  |   |  
|Net general and administrative costs |  |                            | (189 | )                        |      |   |     |  |   | (564  | ) |  |   | 

Allocated Expenses

Prior to the separation, our product development and general and administrative functions were fully integrated with Old Abraxis, including accounting,
treasury, payroll, internal audit, information technology, corporate income tax, legal and investor relations. In addition, Old Abraxis provided manufacturing services to us at cost. After the separation, certain of these arrangements (see above)
continue on a temporary basis for a period generally not to exceed 24 months, or four or five years in the case of manufacturing-related activities and lease arrangements. The unaudited consolidated and combined financial statements for the three
and six months ended June 30, 2007 reflect the application of certain estimates and allocations, and management believes the methods used to allocate these operating expenses are reasonable. The allocation methods include relative head count,
sales, square footage and management knowledge. These allocated operating expenses totaled $15.2 million and $31.1 million for the three and six months ended June 30, 2007, respectively.

(5) Acquisition

In April 2008, we acquired Shimoda Biotech (Pty) Ltd and its subsidiary, Platco Technologies (Pty) Ltd, located in Plettenberg Bay, South Africa. Shimoda Biotech focuses on the development of new pharmaceutical
products by combining successful off-patent molecules with a novel cyclodextrin drug delivery platform, seeking to exploit the faster onset and improved bioavailability characteristics of that platform. Platco Technologies focuses on the development
of novel platinum-based anti-cancer drugs. Shimodas first cyclodextrin-based product, Dyloject® (diclofenac sodium solution for injection), is an injectable painkiller for the
treatment of post-surgical pain. Dyloject® is the worlds first solubilized intravenous formulation of diclofenac. Diclofenac is a non-steroidal anti-inflammatory drugs (NSAID).
Dyloject® was launched in December 2007 in the United Kingdom by Javelin Pharmaceuticals under an exclusive worldwide license agreement pursuant to which Shimoda Biotech will receive
milestone payments and royalties.

Under the terms of the agreement, we acquired
100% of the equity of both Shimoda Biotech and Platco Technologies for an initial upfront payment at closing of $15.1 million, plus potential additional payments upon the achievement of specified milestones. The purchase price paid, including
transaction costs of $0.3 million, was allocated to the net assets and liabilities acquired based on their respective fair values at the acquisition date, which included $8.0 million of intangible assets associated with Dyloject® and $6.9 million in liabilities relating to net milestones payments to be paid in the future. Additionally, $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. The results of Shimoda Biotech and Platco Technologies have been
included in the condensed consolidated financial statements as of the acquisition date.



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(6) Accrued Liabilities

Accrued liabilities consisted of the following at:



|                                    |  |                |        |                  |   |       
|----------------------------------- |  | -------------- | ------ | ---------------- | - | ------
|                                    |  | June 30,2008   |        | December 31,2007
|                                    |  | (in thousands)
|Sales and marketing                 |  | $              | 12,728 |                  | $ | 15,466
|Payroll and employee benefits       |  |                | 11,758 |                  |   | 12,249
|Legal and insurance                 |  |                | 11,906 |                  |   | 12,234
|Restricted stock units  short-term |  |                |       |                  |   | 12,614
|Other                               |  |                | 7,721  |                  |   | 2,364 
|                                    |  |                |        |                  |   |       
|                                    |  | $              | 44,113 |                  | $ | 54,927
|                                    |  |                |        |                  |   |       

(7) Income Taxes

Our effective tax rate as of June 30, 2008 is 0.26%. The rate was computed based on special state tax rules that were used to compute our taxable base on our gross receipts. We also took into consideration the
minimum taxes requirement as part of our state tax expense computation as well as our foreign taxes requirements. The effective tax rate as of June 30, 2008 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.

We adopted the provisions of FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (FIN 48), on January 1, 2007. This interpretation clarifies what criteria must be met prior to the recognition of the financial statement benefit of a position taken in a tax return
in accordance with FASB Statement No. 109, Accounting for Income Taxes. As of June 30, 2008, we had $5.5 million of gross unrecognized tax benefits, which are included in Other non-current liabilities in the accompanying
condensed consolidated balance sheet. During the three months ended June 30, 2008, the gross amount of our unrecognized tax benefits increased by approximately $0.3 million as a result of tax positions taken when we were a part of Old Abraxis.
The majority of this 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, 2008, we had no accruable interest
or penalties. We are a new entity, and we have yet to file any tax returns; therefore, we do not have any returns currently subject to examination by tax authorities or any open audits.

(8) Comprehensive Loss

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



|                                                       |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------ |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                       |  | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |  
|                                                       |  | 2008                       |         |   | 2007                     |   |         | 2008 |  |   | 2007    |  
|                                                       |  | (in thousands)             |        
|Foreign currency translation adjustments               |  | $                          | (397    | ) |                          | $ | (5      | )    |  | $ | 2,028   |   |  | $ | (78     | )
|Unrealized (loss) gain on marketable equity securities |  |                            | (1,142  | ) |                          |   | (351    | )    |  |   | (3,636  | ) |  |   | 148     |  
|                                                       |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Other comprehensive (loss) income                      |  |                            | (1,539  | ) |                          |   | (356    | )    |  |   | (1,608  | ) |  |   | 70      |  
|Net loss                                               |  |                            | (84,143 | ) |                          |   | (13,971 | )    |  |   | (79,834 | ) |  |   | (19,642 | )
|                                                       |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Comprehensive loss                                     |  | $                          | (85,682 | ) |                          | $ | (14,327 | )    |  | $ | (81,442 | ) |  | $ | (19,572 | )
|                                                       |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

At June 30, 2008 and December 31, 2007, we had cumulative foreign currency translation
gain adjustments of $2.2 million and $0.3 million, respectively. In addition, at June 30, 2008 and December 31, 2007, we had cumulative unrealized losses on marketable equity securities of $3.0 million and $0.4 million, respectively.



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(9) Contingencies

On July 19, 2006, Élan Pharmaceutical Intl Ltd. filed a lawsuit against Old
Abraxis in the U.S. District Court for the District of Delaware alleging that Old Abraxis willfully infringed upon two of their patents by asserting that Abraxane® uses technology protected
by Élan-owned patents. Élan seeks unspecified damages and an injunction. In August 2006, Old Abraxis filed a response to Élans complaint contending that it did not infringe on the Élan patents and that the
Élan patents are invalid. On June 13, 2008, the jury ruled that we infringed upon one of Élans patent, which runs until 2011, and awarded Élan $55.2 million in damages for sales of Abraxane® through the judgment date. We are pursuing post-trial motions and are appealing the jury ruling. We assumed any liability of Old Abraxis relating to this litigation in connection with the separation. As of
June 30, 2008, we recorded accrued litigation costs of $58.3 million for this matter, which includes $2.2 million of pre-judgment interest

On or about December 7, 2005, several stockholder derivative and class action lawsuits were filed against Old Abraxis, its directors and American BioScience, Inc. (ABI) in the Delaware Court of Chancery relating to the 2006
merger between Old Abraxis (then known as American Pharmaceutical Partners) and ABI. Old Abraxis was a nominal defendant in the stockholder derivative actions. The lawsuits allege that Old Abraxis directors breached their fiduciary duties to
stockholders by causing Old Abraxis to enter into the merger agreement, which, it is alleged unjustly enriched ABIs stockholders and caused the value of the shares held by Old Abraxis public stockholders to be significantly diminished.
The lawsuits seek, among other things, an unspecified amount of damages and the rescission of the merger. In May 2007, the plaintiffs voluntarily dismissed the derivative and unjust enrichment claims, and the action is proceeding as a putative class
action solely against the individual defendants. We are no longer a party to this action, but we assumed any liability of Old Abraxis relating to this litigation in connection with the separation.

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. No amounts were accrued for the stockholder derivative and class action matters described above as of June 30, 2008 as the action is proceeding as a putative class action solely against the
individual defendants (and not our company) nor could we reasonably estimate the maximum potential exposure or the range of possible loss or accurately predict or determine the eventual outcome of this matter. 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.



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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 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;
| | - |  | -------------------------------------------------------------------------------------------------



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



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



| |  |  | the risk that the benefits from the separation may not be fully realized or may take longer to realize than expected; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | the risks of operating as a stand-alone company and loss of certain benefits associated with common ownership.
| | - |  | --------------------------------------------------------------------------------------------------------------

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, 2007, including Item 1: Business; Item 1A: Risk Factors; Item 6: Selected Financial Data; and Item 8: Financial Statements
and Supplemental Data.



13



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##### Table of Contents

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, 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 in high concentrations preferentially to all tumors secreting a protein called SPARC, which attracts and binds to albumin.

Separation

On November 13, 2007, Old Abraxis
was separated into two independent publicly-traded companies: one holding the former Abraxis Pharmaceutical Products business, or the hospital-based business; and our company, which holds the former Abraxis Oncology and Abraxis Research businesses,
or the proprietary business. In connection with the separation, we changed our name from New Abraxis, Inc. to Abraxis BioScience, Inc. (and the hospital-based business is operated under the name APP Pharmaceuticals, Inc.).

In connection with the separation, stockholders of Old Abraxis as of November 13, 2007
received one share of our company for every four shares of Old Abraxis held as of that date. Additionally, in connection with the separation, we entered into a separation and distribution agreement that provided for, among other things, the
principal corporate transactions required to effect the separation and other specified terms governing our relationship with APP after the spin-off. We also entered into various agreements with APP, including (i) a transition services agreement
pursuant to which we and APP agreed to continue to provide each other with various services on an interim, transitional basis, for periods up to 24 months depending on the particular service; (ii) a manufacturing agreement whereby we and APP
agreed to manufacture Abraxane® and certain other products and to provide other manufacturing-related services for a period of four or five years; (iii) an employees matters agreement
providing for each companys respective obligations to employees and former employees who are or were associated with their respective businesses, and for other employment and employee benefit matters; (iv) various real estate leases; and
(v) a tax allocation agreement.

Also, in connection with the separation, APP
contributed $700 million in cash to us. We are using this contribution primarily to establish our presence globally in connection with the worldwide commercialization of Abraxane®, to
support clinical trial activity to expand indications for Abraxane®, to invest in research and development to commercialize our clinical and discovery pipelines and for potential strategic
opportunities as well as for general corporate purposes, including working capital and capital expenditures.



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##### Table of Contents

RESULTS OF OPERATIONS

Three Months Ended June 30, 2008 and June 30, 2007

The following table sets forth the results of our operations
for the three months ended June 30, 2008 and 2007, and forms the basis for the following discussion of our operating activities:



|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|------------------------------------------------------------ |  | ------------------------------------------------ | ------- | - | ------------------------------------------ | - | ------- | - |  | - | ------- | - |  | ------ | --
|                                                             |  | Three Months Ended June 30,                      |         |   | Change Favorable(Unfavorable)2008 vs. 2007 |  
|                                                             |  | 2008                                             |         |   | 2007                                       |   |         | $ |  |   | %       |  
|                                                             |  | (unaudited, in thousands, except per share data) |        
|Consolidated and combined statements of operations data:     |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Revenue:                                                     |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Abraxane                                                     |  | $                                                | 73,833  |   |                                            | $ | 78,670  |   |  | $ | (4,837  | ) |  | (6     | )%
|Other                                                        |  |                                                  | 3,789   |   |                                            |   | 4,547   |   |  |   | (758    | ) |  | (17    | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Net revenue                                                  |  |                                                  | 77,622  |   |                                            |   | 83,217  |   |  |   | (5,595  | ) |  | (7     | )%
|Cost of sales                                                |  |                                                  | 9,945   |   |                                            |   | 6,899   |   |  |   | (3,046  | ) |  | (44    | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Gross profit                                                 |  |                                                  | 67,677  |   |                                            |   | 76,318  |   |  |   | (8,641  | ) |  | (11    | )%
|Operating expenses:                                          |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Research and development                                     |  |                                                  | 21,693  |   |                                            |   | 16,947  |   |  |   | (4,746  | ) |  | (28    | )%
|Selling, general and administrative                          |  |                                                  | 52,666  |   |                                            |   | 73,209  |   |  |   | 20,543  |   |  | 28     | % 
|Litigation costs                                             |  |                                                  | 58,257  |   |                                            |   |        |   |  |   | (58,257 | ) |  |       |   
|Acquired in-process research and development                 |  |                                                  | 13,900  |   |                                            |   |        |   |  |   | (13,900 | ) |  |       |   
|Amortization of acquired intangible assets                   |  |                                                  | 9,958   |   |                                            |   | 9,653   |   |  |   | (305    | ) |  | (3     | )%
|Equity in net income of Drug Source Co., LLC                 |  |                                                  | (24     | ) |                                            |   | (1,178  | ) |  |   | (1,154  | ) |  | (98    | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Total operating expenses                                     |  |                                                  | 156,450 |   |                                            |   | 98,631  |   |  |   | (57,819 | ) |  | (59    | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Loss from operations                                         |  |                                                  | (88,773 | ) |                                            |   | (22,313 | ) |  |   | (66,460 | ) |  | (298   | )%
|Interest income and other                                    |  |                                                  | 4,829   |   |                                            |   | 43      |   |  |   | 4,786   |   |  | 11,130 | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Loss before income taxes                                     |  |                                                  | (83,944 | ) |                                            |   | (22,270 | ) |  |   | (61,674 | ) |  | (277   | )%
|Provision (benefit) for income taxes                         |  |                                                  | 199     |   |                                            |   | (8,299  | ) |  |   | 8,498   |   |  | (102   | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Net loss                                                     |  | $                                                | (84,143 | ) |                                            | $ | (13,971 | ) |  | $ | (70,172 | ) |  | (502   | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |        |   
|Basic and diluted net loss per common share                  |  | $                                                | (2.10   | ) |                                            | $ | (0.35   | ) |  |   |         |   |  |        |   
|Basic and diluted weighted average common shares outstanding |  |                                                  | 40,018  |   |                                            |   | 39,990  |   |  |   |         |   |  |        |   

Net Revenue

Net revenue for the three months ended June 30, 2008 decreased by $5.6 million, or 6.7%, to $77.6 million as compared to $83.2 million for the same period in 2007. Net revenue for the three months ended
June 30, 2008 included $10.2 million of recognized deferred revenue relating to the co-promotion agreement with AstraZeneca and the license agreements with Taiho and Green Cross as compared to $9.8 million of recognized deferred revenue for the
same period in the prior year.

Abraxane revenue for the three months ended June 30, 2008 decreased $4.8 million to $73.8 million
compared to $78.7 million for the same period of 2007. Revenue for the most recent quarter was impacted by a delay of anticipated product orders. Excluding the recognition of deferred revenue, total Abraxane revenue for the three months ended
June 30, 2008 decreased to $64.7 million, or 6.6% from the previous years comparable period.

Gross Profit

Gross profit for the three months ended June 30, 2008 was $67.7 million, or 87.2% of net revenue, as compared to $76.3 million, or 91.7% of net
revenue, for the same period of 2007. Excluding the recognized deferred revenue, gross profit as a percentage of net revenue for the three months ended June 30, 2008 was 85.5%. The decrease in gross profit reflected lower production volumes.



15



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##### Table of Contents

Research and Development

Research and development expense for the three months ended June 30, 2008 increased $4.7 million, or 28.0%, to $21.7 million as compared to $16.9
million for the same period in 2007. The increase was primarily due to pre-launch costs related to our Phoenix, Arizona manufacturing facility, which was acquired in July 2007, and increases in spending related to clinical trials and research
projects.

Selling, General and Administrative

Selling, general and administrative expense for the three months ended June 30, 2008 decreased $20.5 million to $52.7 million, or 67.8% of net revenue, from $73.2 million, or 88.0% of net revenue, for the same
period in 2007. The decrease primarily reflected higher legal costs incurred in the second quarter of 2007, as well as lower shared marketing expenses under the AstraZeneca co-promotion agreement and lower marketing personnel and program expenses.
This was partially offset by additional commission expense relating to the co-promotion agreement.

Litigation Costs

In June 2008, a jury ruled that we infringed upon one of Élans patent, which runs until 2011, and awarded Élan $55.2 million in
damages for sales of Abraxane through the judgment date. We are pursuing post-trial motions and are appealing the jury ruling (See Note 10  Contingencies to the condensed consolidated financial statements for further discussion). For
the three months ended June 30, 2008, we accrued $58.3 million for this matter, which includes $2.2 million of pre-judgment interest.

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 acquired intangible assets

Amortization of acquired intangible assets increased in the three months ended June 30, 2008 as compared to the same period in 2007 because of incremental amortization associated with the Shimoda Biotech and Platco Technologies
acquisitions in April 2008.

Equity Income in Drug Source Company, LLC

Drug Source Company, LLC is 50% owned by us and is a selling agent of raw material to the pharmaceutical industry. Our investment in Drug Source Company
is intended to both generate a return on our investment and to strengthen our future strategic sourcing capabilities over time. Because our 50% ownership interest in Drug Source Company does not provide financial or operational control of Drug
Source Company, we account for our interest in Drug Source Company under the equity method. Income from Drug Source Company in the second quarter of 2008 was lower than the corresponding period in 2007 due to a higher reserve taken on certain
accounts receivable balances.

Other Non-Operating Items

Interest income and other consisted primarily of interest earned on invested cash and other miscellaneous items. The increase in interest income and other
for the three months ended June 30, 2008 of $4.8 million was primarily related to interest earned on cash investments. For the three months ended June 30, 2008, the average yield on cash investments was 2.8%.

Provision for Income Taxes

Our
effective tax rate for the three months ended June 30, 2008 was approximately 0.02%. 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. We also took into
consideration minimum tax requirements as part of our state tax expense computation. The effective tax rate for the three months ended June 30, 2008 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.



16



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##### Table of Contents

Six Months Ended June 30, 2008 and June 30, 2007

The following table sets forth the results of our operations for the six months ended June 30, 2008 and 2007, and forms the basis for the following
discussion of our operating activities:



|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|------------------------------------------------------------ |  | ------------------------------------------------ | ------- | - | ------------------------------------------ | - | ------- | - |  | - | ------- | - |  | ----- | --
|                                                             |  | Six Months Ended June 30,                        |         |   | Change Favorable(Unfavorable)2008 vs. 2007 |  
|                                                             |  | 2008                                             |         |   | 2007                                       |   |         | $ |  |   | %       |  
|                                                             |  | (unaudited, in thousands, except per share data) |        
|Consolidated and combined statements of operations data:     |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Revenue:                                                     |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Abraxane                                                     |  | $                                                | 153,765 |   |                                            | $ | 149,553 |   |  | $ | 4,212   |   |  | 3     | % 
|Other                                                        |  |                                                  | 5,999   |   |                                            |   | 5,557   |   |  |   | 442     |   |  | 8     | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Net revenue                                                  |  |                                                  | 159,764 |   |                                            |   | 155,110 |   |  |   | 4,654   |   |  | 3     | % 
|Cost of sales                                                |  |                                                  | 18,552  |   |                                            |   | 14,558  |   |  |   | (3,994  | ) |  | (27   | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Gross profit                                                 |  |                                                  | 141,212 |   |                                            |   | 140,552 |   |  |   | 660     |   |  | 0     | % 
|Operating expenses:                                          |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Research and development                                     |  |                                                  | 42,515  |   |                                            |   | 32,660  |   |  |   | (9,855  | ) |  | (30   | )%
|Selling, general and administrative                          |  |                                                  | 97,966  |   |                                            |   | 122,247 |   |  |   | 24,281  |   |  | 20    | % 
|Litigation costs                                             |  |                                                  | 58,257  |   |                                            |   |        |   |  |   | (58,257 | ) |  |      |   
|Acquired in-process research and development                 |  |                                                  | 13,900  |   |                                            |   |        |   |  |   | (13,900 | ) |  |      |   
|Amortization of acquired intangible assets                   |  |                                                  | 19,611  |   |                                            |   | 19,305  |   |  |   | (306    | ) |  | (2    | )%
|Equity in net (income) loss of Drug Source Co., LLC          |  |                                                  | 224     |   |                                            |   | (1,896  | ) |  |   | (2,120  | ) |  | (112  | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Total operating expenses                                     |  |                                                  | 232,473 |   |                                            |   | 172,316 |   |  |   | (60,157 | ) |  | (35   | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Loss from operations                                         |  |                                                  | (91,261 | ) |                                            |   | (31,764 | ) |  |   | (59,497 | ) |  | (187  | )%
|Interest income and other                                    |  |                                                  | 11,651  |   |                                            |   | 339     |   |  |   | 11,312  |   |  | 3,337 | % 
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Loss before income taxes                                     |  |                                                  | (79,610 | ) |                                            |   | (31,425 | ) |  |   | (48,185 | ) |  | (153  | )%
|Provision (benefit) for income taxes                         |  |                                                  | 224     |   |                                            |   | (11,783 | ) |  |   | (12,007 | ) |  | (102  | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Net loss                                                     |  | $                                                | (79,834 | ) |                                            | $ | (19,642 | ) |  | $ | (60,192 | ) |  | (306  | )%
|                                                             |  |                                                  |         |   |                                            |   |         |   |  |   |         |   |  |       |   
|Basic and diluted net loss per common share                  |  | $                                                | (2.00   | ) |                                            | $ | (0.49   | ) |  |   |         |   |  |       |   
|Basic and diluted weighted average common shares outstanding |  |                                                  | 40,007  |   |                                            |   | 39,990  |   |  |   |         |   |  |       |   

Net Revenue

Net revenue for the six months ended June 30, 2008 increased by $4.7 million, or 3.0%, to $159.8 million as compared to $155.1 million for the same period in 2007. Net revenue for the six months ended
June 30, 2008 included $20.4 million of recognized deferred revenue relating to the AstraZeneca co-promotion agreement and the license agreements with Taiho and Green Cross as compared to $19.6 million of recognized deferred revenue for the
same period in the prior year.

Abraxane revenue for the six months ended June 30, 2008 increased $4.2 million to $153.8 million
compared to $149.6 million for the same period in 2007. The increase was primarily due to a price increase which took effect in January 2008 and slightly higher unit sales of Abraxane in the first quarter of 2008. Excluding the recognition of
deferred revenue, total Abraxane revenue for the six months ended June 30, 2008 increased to $135.6 million, or 3.2%, as compared to $131.4 million for the previous years comparable period.

Gross Profit

Gross profit for the
six months ended June 30, 2008 was $141.2 million, or 88.4% of net revenue, as compared to $140.6 million, or 90.6% of net revenue, for the same period in 2007. Excluding the recognized deferred revenue, gross profit as a percentage of net
revenue for the six months ended June 30, 2008 was 86.9% as compared to 89.4% for the same period in 2007, with the decrease primarily due to lower second quarter 2008 production volumes.



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##### Table of Contents

Research and Development

Research and development expense for the six months ended June 30, 2008 increased $9.9 million, or 30.2%, to $42.5 million as compared to $32.7
million for the same period in 2007. The increase was primarily due to pre-launch costs related to our Phoenix, Arizona manufacturing facility acquired in July 2007 and increased regulatory and research project spending.

Selling, General and Administrative

Selling, general and administrative expense for the six months ended June 30, 2008 decreased $24.3 million to $98.0 million, or 61.3% of net revenue, from $122.2 million, or 78.8% of net revenue, for the same period in 2007. The
decrease was due primarily to higher legal costs incurred in the second quarter of 2007, reduced shared marketing and other expenses under the co-promotion agreement associated with lower U.S. Abraxane sales and lower marketing expenses. The
decrease in selling, general and administrative expense was partially offset by additional commission expense relating to the co-promotion agreement.

Litigation Costs

On June 13, 2008, a
jury ruled that we infringed upon one of Élans patent, which runs until 2011, and awarded Élan $55.2 million in damages for sales of Abraxane® through the judgment date.
We are pursuing post-trial motions and are appealing the jury ruling (See Note 10  Contingencies to the condensed consolidated financial statements for further discussion). As of June 30, 2008, we accrued $58.3 million for this
matter, which includes $2.2 million of pre-judgment interest.

Acquired In-Process Research and Development

In connection with the purchase of Shimoda Biotech and Platco Technologies 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 acquired
intangible assets

Amortization of acquired intangible assets increased in the six months ended June 30, 2008 as compared to the
same period in 2007 because of incremental amortization associated with the Shimoda Biotech and Platco Technologies acquisitions in April 2008.

Equity Income in Drug Source Company, LLC

Our equity in Drug Source Company for the six months ended June 30, 2008 was
a loss of $0.2 million versus income of $1.9 million for the corresponding period in 2007. For the six months ended June 30, 2008, Drug Source Company results were negatively impacted by higher than anticipated product returns and an increased
reserve taken on certain receivable balances.

Other Non-Operating Items

Interest income and other consisted primarily of interest earned on invested cash and other miscellaneous items. The increase in interest income and other
in the six months ended June 30, 2008 of $11.3 million was primarily related to interest earned on cash investments. For the six months ended June 30, 2008, the average yield on cash investments was 3.3%.

Provision for Income Taxes

Our
effective tax rate for the six months ended June 30, 2008 was approximately 0.07%. The rate is computed based on special state tax rules that were used to compute our taxable base on our gross receipts. We also took into consideration minimum
tax requirements as part of our state tax expense computation. The effective tax rate for the six months ended June 30, 2008 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

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 30,2008              |           |   | December 31,2007 |  
|                                                            |  | (unaudited)               |           |   |                  |  
|                                                            |  | (in thousands)            |          
|Summary Financial Position                                  |  |                           |           |   |                  |   |           |  
|Cash, cash equivalents and short-term investments           |  | $                         | 656,969   |   |                  | $ | 705,125   |  
|Working capital                                             |  |                           | 660,976   |   |                  |   | 735,181   |  
|Total assets                                                |  |                           | 1,462,488 |   |                  |   | 1,502,255 |  
|Total stockholders equity                                  |  |                           | 1,119,800 |   |                  |   | 1,197,387 |  
|                                                            | 
|                                                            |  | Six Months Ended June 30, |          
|                                                            |  | 2008                      |           |   | 2007             |  
|                                                            |  | (unaudited, in thousands) |          
|Summary of Sources and (Uses) of Cash and Cash Equivalents: |  |                           |           |   |                  |   |           |  
|Operating activities                                        |  | $                         | (11,193   | ) |                  | $ | (18,963   | )
|Purchases of property, plant and equipment                  |  |                           | (13,248   | ) |                  |   | (16,382   | )
|Cash paid for acquisition, net of cash acquired             |  |                           | (14,998   | ) |                  |   |          |  
|Purchases of investments and other marketable securities    |  |                           | (9,393    | ) |                  |   | (1,783    | )
|Financing activities                                        |  |                           | 639       |   |                  |   | 37,097    |  

Sources and Uses of Cash

Operating Activities

Net cash used in operating activities was $11.2 million for the six months
ended June 30, 2008 compared to net cash used in operating activities of $19.0 million for the same period in 2007. The increase in cash from operations of $7.8 million was primarily due to decreases in accounts accounts payable offset by an
increase in accounts receivable. Additionally, higher interest income earned on our cash balance in 2008 also increased cash from operating activities over the prior year.

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. Additionally, we purchased investments and marketable securities,
which we classify as available for sale securities.

Net cash used for the acquisition of property, plant and equipment for the six months
ended June 30, 2008 totaled $13.2 million. The majority of this amount related to expenditures for the modernization of our Melrose Park, Illinois and Phoenix, Arizona manufacturing facilities. For the six months ended June 30, 2008, we
purchased $9.4 million in marketable securities and other investments. Additionally, in 2008, net cash paid for acquisition of $15.0 million relates to our acquisition of Shimoda Biotech and Platco Technologies.

Net cash used for acquisition of property, plant and equipment for the six months ended June 30, 2007 was $16.4 million. This amount primarily
related to the acquisition of our Puerto Rico facility. In addition, we paid $1.8 million for investments and marketable securities in 2007.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2008 represented cash
received upon the exercise of options. Net cash provided by financing activities for the six months ended June 30, 2007 included $37.1 million in net transactions with parent company. For periods prior to November 13, 2007, net
transactions with parent company were presented in lieu of stockholders equity as the assets and liabilities that comprised our company were a part of Old Abraxis.



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##### Table of Contents

Sources of Financing and Capital Requirements

We have historically funded our research and development activities through product licenses fees, including milestones, and borrowings, whereas our
primary sources of liquidity have been cash flow from operations and funding from Old Abraxis with which we had inter-company transactions prior to the separation.

We received a $700 million cash contribution from APP in connection with the separation. We are
using this cash contribution primarily to establish our presence globally in connection with the worldwide commercialization of Abraxane® , to support clinical trial activity to expand
indications for Abraxane® , to invest in research and development to commercialize our clinical and discovery pipelines and for potential strategic opportunities as well as for general
corporate purposes, including working capital and capital expenditures. We generally purchase short-term, investment grade, interest-bearing securities for cash investments.

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

We believe the $700 million contributed to us, together with any cash generated from operations, will be sufficient to finance our operations for at
least the next twelve months. In the event we engage in future acquisitions or significant capital projects, we may have to raise additional capital through additional borrowings or the issuance of debt or equity securities.

CRITICAL ACCOUNTING POLICIES AND 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 financial statements and the reported amounts of revenue and expense during the reporting period. The most significant estimates in our combined financial statements are discussed below. Actual
results could vary from those estimates.

Revenue Recognition

Abraxane® Revenue Recognition

We recognize revenue from the sale of a product when title and risk of loss have transferred to the customer, collection is reasonably
assured and we have no further performance obligation. This is typically when the product is received by the customer. At the time of sale, as further described below, we reduce sales and provide for estimated chargebacks, contractual allowances or
customer rebates, product returns and customer credits and Medicaid rebates. Our methodology used to estimate and provide for these sales provisions was consistent across all periods presented. Accruals for sales provisions are presented in our
consolidated and combined financial statements as a reduction of net revenue and accounts receivable and, for contractual allowances, an increase in accrued liabilities. We regularly review information related to these estimates and adjust our
reserves accordingly if, and when, actual experience differs from estimates.

We have internal historical information on chargebacks,
rebates and customer returns and credits which we use as the primary factor in determining the related reserve requirements. Due to the nature of our product and its primary use in hospital and clinical settings with generally consistent demand, we
believe that this internal historical data, in conjunction with periodic review of available third-party data and updated for any applicable changes in available information, provides a reliable basis for such estimates.

Research Revenue Recognition

Research revenue generally consists of amounts earned from the development and research to advance the commercial application of pharmaceutical compounds for third parties. Such research revenue may include upfront license fees, milestone



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payments and reimbursement of development and other costs, and royalties. Non-refundable upfront license fees under which we have continuing involvement in
the form of development, manufacturing or commercialization are recognized as revenue ratably over either the development period, if the development risk is significant, or the estimated product useful life, if the development risk has been
substantially eliminated. Achievement-based milestone payments are recognized as revenue when the milestone objective is attained and the earnings process relating to such payments is complete. Royalties are recognized as earned in accordance with
the contract terms when royalties from licensees can be reliably measured and collectibility is reasonably assured. Royalty estimates are made in advance of amounts collected using historical and forecasted trends.

Other Deferred Revenue

Other
deferred revenue primarily consists of upfront payments earned from our co-promotion and license agreements. Such deferred revenue is recognized as earned ratably over the life of each agreement.

Sales Provisions

Our sales provisions totaled $16.3 million and $14.3 million for the six months ended
June 30, 2008 and 2007, respectively, and related reserves totaled $8.0 million and $7.9 million at June 30, 2008 and December 31, 2007, respectively. The increase in reserves relates primarily to contractual allowance reserves
associated with increased sales of Abraxane®, as well as the timing of the related payments.

Chargebacks

Following industry practice, we typically sell our product to independent
pharmaceutical wholesalers at wholesale list price. The wholesaler in turn sells our product to an end user, normally a hospital or alternative healthcare facility, at a lower contractual price previously established between us and the end user via
a group purchasing organization, or GPO. GPOs enter into collective purchasing contracts with pharmaceutical suppliers to secure more favorable product pricing on behalf of their end-user members.

Our initial sale to the wholesaler, and the resulting receivable, are recorded at our wholesale list price. However, as most of these selling prices will
be reduced to a lower end-user contract price, at the time of sale revenue is reduced by, and a provision recorded for, the difference between the list price and estimated end-user contract price. When the wholesaler ultimately sells the product to
the end user at the end-user contract price, the wholesaler charges us, a chargeback, for the difference between the list price and the end-user contract price and such chargeback is offset against our initial estimated contra asset. The most
significant estimates inherent in the initial chargeback provision relate to wholesale units pending chargeback and the ultimate end-user contract selling price. We base our estimation for these factors primarily on internal sales and chargeback
processing experience, estimated wholesaler inventory stocking levels, current contract pricing and our expectation for future contract pricing changes.

Our net chargeback reserve totaled $1.0 million and $1.2 million at June 30, 2008 and
December 31, 2007, respectively. Due to information constraints in the distribution channel, it has not been practical, and has not been necessary, for us to capture and quantify the impact of current versus prior year activity on the
chargeback provision. Information constraints within the distribution channel primarily relate to our inability to track product through the channel on a unit or specific lot basis. In addition, for the most part, we do not receive information from
our customers with respect to what level of their sales are subject to chargeback. The lack of information on a specific lot basis precludes us from tracking actual chargeback activity to the period of our initial sale. As a result, we rely on
internal data, external IMS data and management estimates in order to estimate the amount of inventory in the channel subject to future chargeback. The amount of inventory in the channel is comprised of physical inventory at the distributor and end
user sales that the distributor has yet to report. Physical inventory in the channel is determined by the difference between our sales less end user sales as reported by IMS. As IMS data is reported approximately one month after end user sales, the
last month of end user sales is determined by a mathematical trend incorporating IMS data for prior months. We estimate yet to be reported end user sales based on a historical average number of days to process chargeback activities from the date of
the end user sale. We also review current year chargeback activity to determine whether material changes in the provision relate to prior period sales; such changes have not been material to our statements of operations. As a proprietary product,
Abraxane® does not require significant chargeback reserves. A one percent increase in wholesale units pending chargeback at June 30, 2008 would decrease total revenue in the six months
ended June 30, 2008 by less than $0.1 million.

Contractual Allowances, Returns and Credits and Bad Debts

Contractual allowances, generally rebates or administrative fees, are offered to certain wholesale customers, GPOs and end-user
customers, consistent with pharmaceutical industry practices. Settlement of rebates and fees may generally occur



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from one to 15 months from date of sale. We provide a general provision for contractual allowances at the time of sale based on the historical
relationship between sales and such allowances. Upon receipt of chargeback, due to the availability of product and customer specific information on these programs, we then establish a specific provision for fees or rebates based on the specific
terms of each agreement. Our reserve for contractual allowances totaled $6.0 million and $6.2 million at June 30, 2008 and December 31, 2007, respectively. A one percent increase in contractual allowances for the six months ended
June 30, 2008 would decrease net sales by $0.4 million. Contractual allowances are reflected in the condensed consolidated and combined financial statements as a reduction of net revenue and as a current accrued liability.

Consistent with industry practice, our return policy permits our customers to return product within a window of time before and after the expiration of
product dating. We provide for product returns and other customer credits at the time of sale by applying historical experience factors generally based on our historic data on credits issued by credit category or product, relative to related sales
and we provide specifically for known outstanding returns and credits. Our reserve for customer credits and product returns totaled $0.1 million and $0.4 million at June 30, 2008 and December 31, 2007, respectively. At June 30, 2008,
a one percent increase in the estimated reserve requirements for customer credits and product returns would have decreased net revenue for the six months ended June 30, 2008 by less than $0.1 million.

We establish a reserve for bad debts based on general and identified customer credit exposure. Our historic bad debt losses are not significant.

Inventories

Inventories consist of products currently approved for marketing and may include certain products pending regulatory approval. From time to time, 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. As of June 30, 2008 and December 31, 2007, capitalized inventory products pending regulatory approval were immaterial.

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

Expense Recognition

Cost of sales represents the costs of the products which we have sold and consists of labor, raw materials, components, packaging, quality assurance and
quality control, shipping and manufacturing overhead costs and the cost of finished products purchased from third parties.

Research and
development costs are expensed as incurred or consumed and consist primarily of salaries and other personnel-related expenses, as well as depreciation of equipment, allocable facility, raw material and production expenses and contract and consulting
fees.

Selling, general and administrative expenses consist primarily of salaries, commissions and other personnel-related expenses, as
well as costs for travel, trade shows and conventions, promotional material and catalogs, advertising and promotion, co-promotion commission to AstraZeneca, facilities, risk management, legal and professional fees.

Up to the date of the separation on November 13, 2007, our product development and general and administrative functions were fully integrated with
Old Abraxis, including accounting, treasury, payroll, internal audit, information technology, corporate income tax, legal and investor relations. In addition, Old Abraxis provided manufacturing services to us at cost. After the separation, certain
of these arrangements will continue on a temporary basis for a period generally not to exceed 24 months (or four or five years with respect to the manufacturing arrangement and real estate leases). The accompanying condensed consolidated and
combined financial statements reflect the application of certain estimates and



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allocations, and management believes the methods used to allocate these operating expenses are reasonable. The allocation methods include relative head
count, sales, square footage and management knowledge. These allocated operating expenses totaled $15.2 million and $31.1 million for the three and six months ended June 30, 2007, respectively. The financial information in the
consolidated and combined financial statements does not include all the expenses that would have been incurred had we been a separate, stand-alone entity for the periods prior to November 13, 2007. As such, the financial information for the
three and six months ended June 30, 2007 and 2008 does not reflect the combined financial position, results of operations and cash flows of us in the future or what they would have been, had we been a separate, stand-alone entity for the
periods prior to November 13, 2007.

Stock-Based Compensation

We account for stock based compensation in accordance with FAS 123R, which requires the recognition of compensation cost for all share-based payments
(including employee stock options) at fair value. We use the straight-line attribution method to recognize share-based compensation expenses over the applicable vesting period of the award. Generally, options currently granted expire ten years from
the grant date and vest ratably over a four-year period. Restricted stock units (RSUs) granted under the 2001 Stock Incentive Plan generally vest ratably over a four-year period, while awards under the American BioScience Restricted Unit
Plan II (RSU Plan II) generally vested with respect to one half of the units on April 18, 2008 and will vest with respect to the remaining one half of the units on April 18, 2010.

To determine stock-based compensation, we use the Black-Scholes option pricing model to estimate the fair value of options granted under equity incentive
plans and rights to acquire stock granted under our stock participation plan. Compensation expense associated with RSU awards under the 2001 Stock Incentive Plan is accounted for under the equity method in accordance with FAS 123(R).

Awards under RSU Plan I and RSU Plan II entitle the holders on each vesting date to convert the vested portion of their awards into that number of shares
of our common stock equal to the value of the vested portion of the award divided by the lower of (i) the average closing price of our common stock over the three consecutive trading days ending on and including the second full trading day
preceding the vesting date and (ii) $66.63 (which is the adjusted price following the separation). Accordingly, compensation expense related to these RSU plans is based on the lower of the market price or $66.63 and is expensed under the
liability method in accordance with FAS 123(R) on a straight-line basis over the applicable vesting period.

We assumed an agreement
between Old Abraxis and RSU Plan LLC (RSU LLC), of which our chief executive officer and chairman is a member. Under the terms of this agreement, RSU LLC has agreed that prior to the date on which restricted stock units issued pursuant
to RSU Plan II become vested, RSU LLC will deliver, or cause to be delivered, to us the number of our shares of common stock or cash (or a combination thereof) in an amount sufficient to satisfy the obligations to participants under RSU Plan II of
the vested restricted stock units. We are required to satisfy our obligations under the RSU Plan II by paying to the participants in RSU Plan II cash and/or shares of our common stock in the same proportion as was delivered by the RSU LLC. The
intention of this agreement is to have RSU LLC satisfy our obligations under the RSU Plan II so that there will not be any further dilution to our stockholders as a result of our assumption of RSU Plan II.

Income Taxes

Deferred tax
assets and liabilities are recognized for future tax consequences attributable to differences between the consolidated and combined financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net
operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect of deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated financial statements in the period that includes the legislative enactment date.

Acquisitions

We account for
acquired businesses using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated
fair values of the net assets acquired is recorded as goodwill. Amounts allocated to acquired in-process research and development are expensed at the date of acquisition. When we acquire net assets that do not constitute a business under generally
accepted accounting principles in the United States, no goodwill is recognized.

The judgments made in determining the estimated fair value
assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our results of operations. Accordingly, for significant items, we typically obtain assistance from third-party valuation specialists.
The valuations are based on information available near the acquisition date and are based on expectations and assumptions that have been deemed reasonable by management.



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Determining the useful life of an intangible asset also requires judgment, as different types of
intangible assets will have different useful lives and certain assets may even be considered to have indefinite useful lives. For example, the useful life of the right associated with a pharmaceutical products exclusive patent will be finite
and generally will result in amortization expense being recorded in our results of operations over a determinable period. However, the useful life associated with a brand that has no patent protection but that retains, and is expected to retain, a
distinct market identity could be considered to be indefinite and the asset would not be amortized.

Impairment of long-lived assets

We review all of our long-lived assets, including goodwill and other intangible assets, for impairment indicators at least annually
and we perform detailed impairment testing for goodwill annually and for all other long-lived assets whenever impairment indicators are present. Examples of those events or circumstances that may be indicative of impairment include:



| |  |  | A significant adverse change in legal factors or in the business climate that could affect the value of the asset, including a successful challenge of our patent
rights that could result in generic competition earlier than expected.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A significant adverse change in the extent or manner in which an asset is used, including restrictions imposed by the FDA or other regulatory authorities that could
affect our ability to manufacture or sell a product.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A projection or forecast that demonstrates losses associated with an asset, including a change in a government reimbursement program that could result in an
inability to sustain projected product revenues or profitability or the introduction of a competitors product that could result in a significant loss of market share.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The value of intangible assets is determined primarily using the income method, which starts with a forecast of all expected future net cash
flows. Accordingly, the potential for impairment for intangible assets may exist if actual revenues are significantly less than those initially forecasted or actual expenses are significantly more than those initially forecasted. Some of the more
significant estimates and assumptions inherent in the intangible asset impairment estimation process include: the amount and timing of projected future cash flows; the discount rate selected to measure the risks inherent in the future cash flows;
and the assessment of the assets life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory or economic barriers to entry as well as expected changes in standards of practice for
indications addressed by the asset.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued Statement No. 141(R), Business Combination (SFAS 141R) and Statement No. 160, Accounting and Reporting of Noncontrolling Interest in Consolidated
Financial Statements, an Amendment of ARB No. 51 (SFAS 160). These new standards will significantly change the accounting for and reporting of business combination transactions and noncontrolling (minority) interests consolidated
financial statements. SFAS 141R and SFAS 160 are required to be adopted simultaneously and are effective for the first annual reporting period beginning on or after December 15, 2008. Earlier application is not permitted. SFAS 141R and SFAS 160
could have a significant impact on our accounting for future business combinations and other business arrangements after the implementation of these statements.

In December 2007, the FASB ratified EITF No. 07-1,  Accounting for Collaborative Agreements (EITF 07-1). EITF 07-1 provides guidance regarding financial statement presentation and
disclosure of collaborative arrangements, as defined. EITF 07-1 will be applicable to arrangements we may enter into regarding development and commercialization of products and product candidates. EITF 07-1 is effective for us as of January 1,
2009, and its adoption is not expected to have a material impact on our consolidated results of operations or financial position.



|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, Switzerland 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 combined financial statement 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.



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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, 2008, 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. The average
maturity of the debt securities in which we invest has been less than 90 days and the maximum maturity has been three months.

Interest Rate Risk: As of June 30, 2008, we had no debt obligations outstanding. Consequently, we have minimal current exposure to changes in interest rates on borrowings.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Under the rules and
regulations of the Securities and Exchange Commission, we are not required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 until we file our Annual Report on Form 10-K for our fiscal year ending
December 31, 2008. In our Annual Report on Form 10-K for the fiscal year ending December 31, 2008, management and our independent registered public accounting firm will be required to provide an assessment as to the effectiveness of
our internal control over financial reporting.

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, 2008.



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PART II. OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

On or about December 7,
2005, several stockholder derivative and class action lawsuits were filed against Old Abraxis, its directors and ABI in the Delaware Court of Chancery relating to the 2006 merger between Old Abraxis (then known as American Pharmaceutical Partners)
and ABI. Old Abraxis was a nominal defendant in the stockholder derivative actions. The lawsuits allege that Old Abraxis directors breached their fiduciary duties to stockholders by causing Old Abraxis (then known as American Pharmaceutical
Partners) to enter into the merger agreement, which, it is alleged unjustly enriched ABIs stockholders and caused the value of the shares held by Old Abraxis public stockholders to be significantly diminished. The lawsuits seek, among
other things, an unspecified amount of damages and the rescission of the merger. In May 2007, the plaintiffs voluntarily dismissed the derivative and unjust enrichment claims, and the action is proceeding as a putative class action solely against
the individual defendants. We are no longer a party to this action, but we assumed any liability of Old Abraxis relating to this litigation in connection with the separation.

On July 19, 2006, Élan Pharmaceutical Intl Ltd. filed a lawsuit against Old
Abraxis in the U.S. District Court for the District of Delaware alleging that Old Abraxis willfully infringed upon two of their patents by asserting that Abraxane® uses technology protected
by Élan-owned patents. Élan seeks unspecified damages and an injunction. In August 2006, Old Abraxis filed a response to Élans complaint contending that it did not infringe on the Élan patents and that the
Élan patents are invalid. On June 13, 2008, the jury ruled that we infringed upon one of Élans patent, which runs until 2011, and awarded Élan $55.2 million in damages for sales of Abraxane® through the judgment date. We are pursuing post-trial motions and are appealing the jury ruling. We assumed any liability of Old Abraxis relating to this litigation in connection with the separation.

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 six months ended June 30, 2008 and the year ended
December 31, 2007, total Abraxane® revenue was $153.8 million and $324.7 million, respectively, including $18.2 million and $36.4 million, respectively, of recognized deferred revenue
relating to the co-promotion agreement with AstraZeneca. Because Abraxane® is our only approved product, Abraxane® revenue
represented approximately 96% and 97% of our revenues for the six months ended June 30, 2008 and year ended December 31, 2007, 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.
| | - |  | -------------------------------------------------------------



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

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 and 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.



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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 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. We believe our current paclitaxel inventory
is sufficient to meet our needs for at least the next 18 months. 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.



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

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

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

We may have potential conflicts of interest with APP.

Conflicts of interest may arise between APP and us in a number of areas relating to our past and ongoing relationships, including:



| |  |  | business opportunities that may be attractive to both APP and us;
| | - |  | -----------------------------------------------------------------



| |  |  | manufacturing and transitional service arrangements we have entered into with APP;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | lease agreements we have entered into with APP; and
| | - |  | ---------------------------------------------------



| |  |  | employee retention and recruiting.
| | - |  | ----------------------------------



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Our Chief Executive Officer and Chairman of our board of directors, Patrick Soon-Shiong, M.D., owns
approximately 80% of the outstanding capital stock of APP and us. He is also the Chairman of the APP board of directors. Accordingly, he may experience conflicts of interest with respect to decisions involving business opportunities and similar
matters that may arise in the ordinary course of our business, on the one hand, and the business of APP, on the other hand.

Resolutions of
some potential conflicts of interest are subject to review and approval by the audit committee of our board of directors or approval by another independent committee of our board of directors. We still may be unable, however, to resolve some
potential conflicts of interest with APP and Dr. Soon-Shiong and, even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.

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;
| | - |  | -----------------------------------------------------------------



| |  |  | 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



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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, 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.

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, 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, Chief Executive Officer, David OToole, Chief Financial Officer, Bruce
Wendel, Executive Vice President of Corporate Operations and Development, Neil P. Desai, Vice President of Research and Development, 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.



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

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

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

As part of our business strategy and growth plan, we 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

We have no 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 we have included in this
Quarterly Report on Form 10-Q 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 incur 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. For additional
information about our past financial performance in relation to our current and future financial performance, please see Managements Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in
this Quarterly Report on Form 10-Q.



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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 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.

Our accounting and other management systems and resources may not be adequately prepared to meet the
financial reporting and other requirements to which we are now subject. If we are unable to achieve and maintain effective internal controls, our business, financial position and results of operations could be adversely affected.

Our financial results previously were included within the consolidated results of Old Abraxis. However, we were not directly subject to the reporting and
other requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result of the separation, we are now directly subject to the reporting and other obligations under the Exchange Act, including the requirements of
Section 404 of the Sarbanes-Oxley Act of 2002, which will require annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm addressing
such assessments. These reporting and other obligations will place significant demands on our management and administrative and operational resources, including accounting resources.

To comply with these requirements, we will need to upgrade our systems, including information technology, implement additional financial and management
controls, reporting systems and procedures and hire additional legal, accounting and finance staff. If we are unable to upgrade our financial and management controls, reporting systems, information technology and procedures in a timely and effective
fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired. In addition, if we are unable to conclude that our internal control over financial reporting is effective
(or if the auditors are unable to attest that our managements report is fairly stated or they are unable to express an opinion on our managements assessment or on the effectiveness of our internal controls), we could lose investor
confidence in the accuracy and completeness of our financial reports.

Our management will be responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those written policies and procedures
that:



| |  |  | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles
generally accepted in the United States;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provide reasonable assurance that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on
our financial statements.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Any failure to achieve and maintain effective internal controls could have an adverse effect
on our business, financial position and results of operations.



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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. On July 6, 2008,
APP entered into a merger agreement with Fresenius SE and certain of its direct and indirect subsidiaries. Pursuant to the merger agreement, Fresenius will acquire all of the outstanding common stock of APP. Pursuant to the tax allocation agreement
and the merger agreement, the acquisition is conditioned upon receipt by APP of a tax opinion, in form and substance reasonably acceptable to us, that the acquisition should not affect the qualification of the distribution under Section 355 and
Section 368(a)(1)(D) of the Internal Revenue Code and the nonrecognition of gain to APP in the distribution. Under the terms of the tax allocation agreement, we are generally liable for, and are required to indemnify APP against, any tax
liability arising as a result of the distribution failing to qualify for tax-free treatment unless, notwithstanding such tax opinion, such tax liability is imposed as a result of an acquisition of APP, including the acquisition of APP by Fresenius,
or certain other specified acts of APP.

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

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

We will be dependent upon APP to manufacture Abraxane® for a term of four or five 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



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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 Chief
Executive Officer 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 Chief Executive Officer and entities affiliated with him collectively own approximately 80% 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 Chief Executive Officer. 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 Chief Executive Officer may require us to register shares for resale on a Form S-3 registration statement. 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 Chief Executive Officer and entities affiliated with him own over 80% of our
outstanding common stock. In connection with Old Abraxis requesting from the Internal Revenue Service a private letter ruling regarding the U.S. federal income tax consequences of the transactions, our Chief Executive Officer, his wife and certain
entities affiliated with him have represented to the Internal Revenue Service that they have no current plan or intention to sell their shares after the separation.

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;
| | - |  | -----------------------------------------------------



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| |  |  | 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 Chief Executive Officer (who with
members of his immediate family and entities affiliated with him own approximately 80% 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.

Under U.S. federal bankruptcy laws or comparable provisions of state fraudulent
transfer laws, you could be required to return all or a portion of the shares received in the distribution.

In connection with the
separation, Old Abraxis incurred $1 billion in indebtedness and contributed $700 million of those proceeds to us prior to the separation. If Old Abraxis is insolvent or rendered insolvent as a result of the distribution of our common stock to
the holders of Old Abraxis common stock, or if any of Old Abraxis and/or one or more of its subsidiaries that incurs a portion of the indebtedness is insolvent or rendered insolvent either as a result of the incurrence of the indebtedness or the
ultimate dividend/transfer of the proceeds of such indebtedness to us, there is a risk that a creditor (or a creditor representative) of Old Abraxis could bring fraudulent transfer claims to recover all or a portion of our common stock received in
the separation and distribution and that the persons receiving such distributions would be required to return all or a portion of such distributions if such claims were successful. It was a condition to the completion of the transactions that Old
Abraxis received opinions of a valuation firm with respect to Old Abraxis and its subsidiaries solvency at the time it declared the distributions and at the time the distributions were made.



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

None.



|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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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/ DAVID D. OTOOLEDavid D. OToole Executive Vice President and Chief Financial Officer (Principal Financial and Accounting
Officer)


Date: August 14, 2008



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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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|              |  |                                                                                                                                                                                                                                                                                                                                                                                     
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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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|              |  |                                                                                                                                                                                                                                                                                       
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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                                                                                                                                                                                              
|              | 
|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