Two oncology forces unite as one: Merger consolidates global rights to Abraxane, deepens drug pipeline
LOS ANGELES—April 18, 2006—American Pharmaceutical Partners and American BioScience complete the merger, announced in January, to form Abraxis BioScience. The common stock began trading on April 19 on the Nasdaq National Market under the symbol "ABBI". The new company is organized along four key operating divisions: Abraxis Pharmaceutical Products, Abraxis Oncology, Abraxis Research, and Abraxis BioCapital.
SCHAUMBURG, Ill.—Publicly traded American Pharmaceutical Partners Inc. (APP) and privately held American BioScience Inc. (ABI) recently announced the signing of a definitive merger agreement. The all-stock transaction, which will create a new company called Abraxis BioScience, is expected to close in the first half of 2006. ABI currently owns just over 64 percent of the outstanding shares of APP.
"We believe this merger is a unique opportunity to combine the strengths of a development-stage biotechnology company with those of a growing and profitable injectable pharmaceutical business to create a fully integrated, global biopharmaceutical leader," says Dr. Patrick Soon-Shiong, executive chairman of APP and chairman and CEO of ABI.
As part of the transaction, APP will also issue 86 million additional shares to ABI shareholders, reports Rob Whetstone, managing director of PondelWilkinson Inc., which handles investor relations for APP. He adds that APP will continue as a division of Abraxis BioScience.
'This is a significant step in the evolution of these companies and much more than just a name change," Whetstone asserts. "People will see a completely new entity ultimately coming out of this, one that combines the best of specialty pharmaceutical company APP with the extensive pipeline and proof of principle of the technology within ABI. Also, finally under one roof the new entity will have the worldwide rights to Abraxane."
Abraxane, which is for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy already is the focus of 74 clinical trials. Also, ABI is also involved in seven Phase 3 studies on other drugs—but there are many candidates yet to mine for drug discovery efforts. At least six INDs will be filed in 2006 and 2007 alone, Soon-Shiong reports.
ABI will immediately bring to the new company 50 percent of the profits from North American sales of Abraxane as well as the marketing rights for the rest of the world. A regulatory filing for Abraxane has been submitted in Canada. Regulatory filings for Abraxane in Europe and Mexico are anticipated in the first half of 2006 and other countries, including China, Russia, Korea, Australia, New Zealand, Hong Kong and Taiwan, in 2006 and early 2007. Recently, the marketing rights to Abraxane for Japan were licensed to Taiho Pharmaceutical Co. in Japan for up-front and milestone payments in excess of $50 million in addition to royalties.
For its part, APP brings to the combined company an injectables franchise focused on oncology, critical care and anti-infective markets, a strong history of product approvals and a robust product pipeline that currently includes more than 20 ANDAs pending at the FDA and more than 40 additional products in development.
"We expect to be able to use ABI's patented nab technology in other applications to facilitate the efficient, rapid creation of new drug products," Soon-Shiong says. "The efficacy risk should be mitigated by developing new drugs using active agents already approved by the FDA."
"APP already had a deep pipeline, but now that you combine that with the blockbuster potential of Abraxane and what is in the ABI pipeline, you have the makings of a very interesting global force in the biopharmaceutical industry," Whetstone concludes.