Abraxis Bioscience Inc. New (ABII) filed Quarterly Report for the period ended 2009-06-30.
Abraxis BioScience is a fully integrated biotechnology company dedicated to delivering progressive therapeutics and core technologies that offer patients and medical professionals safer and more effective treatments for cancer and other critical illnesses. The Abraxis portfolio includes the world\'s first and only protein-based nanoparticle chemotherapeutic compound which is based on its proprietary tumor targeting system known as the nab Technology platform. From the discovery and research phase to development and commercialization Abraxis BioScience is committed to rapidly enriching the company\'s pipeline and accelerating the delivery of breakthrough therapies that will transform the lives of the patients who need them. Abraxis with headquarters in Los Angeles California trades on the Nasdaq Global Market under the symbol `ABII.` Abraxis Bioscience Inc. New has a market cap of $1.26 billion; its shares were traded at around $31.52 with and P/S ratio of 3.6.
Highlight of Business Operations:
In January 2009, we announced that our board of directors approved a plan to spin-off a newly-formed subsidiary, Abraxis Health, Inc., as a new independent, stand-alone company holding a significant portion of our drug discovery, pilot manufacturing and development business. If the spin-off occurs, our stockholders would own (i) shares of Abraxis Health and (ii) shares of our common stock, and we would continue to operate our existing business, excluding the drug discovery, manufacturing and development business to be held by Abraxis Health. In connection with the proposed spin-off, Abraxis Health would enter into several agreements with us related to, among other things, manufacturing, transition services, tax allocations and a number of ongoing commercial relationships. In addition, in connection with the proposed spin-off, we plan to contribute $25 million of our cash balance to Abraxis Health as well as provide a $200 million secured credit facility to Abraxis Health.
Net revenue for the three months ended June 30, 2009 increased by $7.5 million, or 9.7% to $85.1 million as compared to $77.6 million for the same period in 2008. Included in net revenue for the three months ended June 30, 2008 was $9.1 million of recognized deferred revenue related to the co-promotion agreement ended in January 2009.
Abraxane revenue for the three months ended June 30, 2009 increased $1.4 million to $75.2 million compared to $73.8 million for the same period in 2008. Excluding the recognition of deferred revenue associated with the co-promotion agreement, total Abraxane revenue for the three months ended June 30, 2009 increased by $10.5 million, or 16.1%, to $75.2 million as compared to $64.7 million for the same period in the previous year. The increase was due to higher volume and average net selling price in the United States, and incremental revenue from global expansion into the China and Australian markets and increased volume in the European Union compared to the same period in the prior year.
Other revenue for the three months ended June 30, 2009 increased by $6.2 million or 163.2% to $10.0 million compared to $3.8 million for the same period in 2008 primarily due to certain raw materials sales in the second quarter of 2009.
Gross profit for the three months ended June 30, 2009 was $70.5 million, or 82.8% of net revenue, as compared to $67.7 million, or 87.2% of net revenue, for the same period in 2008. The decrease was primarily due to increased volume of sales of lower margin products, including sales of Abraxane in China and the European Union. Excluding recognized deferred revenue related to the co-promotion agreement, gross profit as a percentage of net revenue for the three months ended June 30, 2009 was 82.8% as compared to 85.5% for the same period in 2008.
Selling, general and administrative expense for the three months ended June 30, 2009 decreased $6.4 million to $47.1 million, or 55.3% of net revenue, from $53.5 million, or 69.0% of net revenue, for the same period in 2008. The reacquisition of Abraxane® marketing rights in the U.S. yielded savings due to elimination of commission payments. These savings were partially offset by increased investment in the global expansion of Abraxane® primarily in China and the European Union, infrastructure build-out costs and increased spending on U.S. sales and marketing.
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