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American Pharmaceutical Partners, American Bioscience Merge to Form Abraxis Bioscience
PharmaManufacturing.com
11/28/2005
The all-stock transaction, which will combine the two companies under a new name, Abraxis BioScience, is expected to close in the first half of 2006. ABI currently owns approximately 64.4% 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," said Patrick Soon-Shiong, M.D., executive chairman of APP and chairman and CEO of ABI. "By integrating breakthrough science (validated by the successful commercial launch of the first in-class albumin bound particle chemotherapeutic), applying proprietary nab technologies to compounds of known activity (thus enabling rapid clinical development) and leveraging the manufacturing and distribution expertise as well as sales and marketing infrastructure of APP, we are creating a differentiated biopharmaceutical enterprise with the potential for high, sustainable growth and a lower development risk profile."
"The newly merged entity will be well positioned to discover and synthesize pharmaceutical product candidates and rapidly advance them through the regulatory process to commercialization. We believe this transforming event of combining APP and ABI will maximize the opportunity for sustained high growth, and enhance long-term profitability and shareholder value," he said.
Oncology treatments
ABI will immediately bring to the new company 50% 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 Company, a leading oncology company in Japan, for upfront and milestone payments in excess of $50 million in addition to substantial royalties.
ABI also brings a deep pipeline of proprietary oncology and critical care products based on the company's novel nab technology platform, including Abraxane; an extensive clinical development program to expand Abraxane indications; natural product, therapeutic and reverse peptide libraries; a world class research, clinical development and regulatory team; and intellectual property built around the nab tumor targeting technology platform and a tumor-secreted protein (SPARC: Secreted Protein, Acidic and Rich in Cysteine). ABI has 130 issued and 126 pending patents around the nab platform, Abraxane and the product pipeline.
"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," Dr. Soon-Shiong noted. "The efficacy risk should be mitigated by developing new drugs using active agents already approved by the FDA. We anticipate that at least 6 INDs will be filed through 2006 and 2007, including nab-docetaxel, a solvent-free nab form of the leading taxane Taxotere, which has a current market size of in excess of $1 billion."
ABI's oncology pipeline candidates target multiple molecular tumor targets including tubulin (nab-docetaxel), m-tor (nab rapamycin), HSP-90 (nab-17AAG), topo-isomerase 1 plus tubulin (nab-thiocolchicine dimer), and the vascular endothelial cell (oral seco-taxane).
The new company will be well positioned to establish itself as a leader in oncology utilizing the nab platform, which combines biologically interactive human albumin with an active pharmaceutical agent in a nanoparticle state. The nab platform enables the development of a new class of compounds that take advantage of receptor mediated pathways (gp60) and specific protein binding (SPARC), which has been shown to result in improved efficacy and therapeutic index. Recent clinical data show that SPARC, a protein known to be secreted by multiple tumor types, has been found to target albumin, a key component of nab chemotherapy. Clinical data to date support a direct correlation between high antitumor activity of Abraxane and tumor types known to express SPARC.
APP will bring to the combined company an injectables franchise focused on oncology, critical care and anti-infective markets, a leading product market shares across 186 products, a strong history of product approvals and a robust product pipeline that currently includes more than 20 ANDAs pending at the FDA and over 40 additional products in development. The company has developed a strategy to compete in the large low-molecular-weight heparin market. It also will bring the only commercial scale protein-engineered nanoparticle manufacturing capacity in the U.S., an established relationship with key group purchasing organizations and a track record of high growth and profitability.
Based on estimated revenues of more than $500 million for 2005, APP's compounded annual growth rate from 1998 through this year is more than 33%. The combined company is expected to have positive operating cash flow. ABI's operating expenses are estimated to be approximately $50 million in 2005 and are anticipated to be between $75-$100 million in 2006.
Abraxis BioScience management
Following the closing, a highly experienced management team with a proven track record will lead the new company. Patrick Soon-Shiong, M.D., currently executive chairman of APP and chief executive officer of ABI, has assumed the duties of chairman and chief executive officer of APP. He succeeds Al Heller, who has stepped down from that position and from the company's board of directors.
Abraxis BioScience is expected to be organized along operating divisions with leadership positions in each division to be announced by the end of this year. One operating division will be American Pharmaceutical Partners. In addition, there will be a proprietary business division and R&D division.
For more information, visit APP's website at www.appdrugs.com and www.abraxisoncology.com.