Abraxis BioScience (ABII)

Abraxane^® Revenue

We recognize revenue from the sale of Abraxane^® 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 wholesalers receive the product. At the time of sale, as further described below, we reduce sales and provide for estimated chargebacks, bad debts, customer or Medicaid rebates, product returns and customer credits. Our methodology used to estimate and provide for these sales provisions was consistent across all periods presented. Accruals for sales allowance are presented in our financial statements as a reduction of sales and accounts receivable and, for customer or Medicaid rebates, in accrued liabilities. We regularly review information related to these estimates and adjust 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. 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.

Our sales provisions totaled $41.0 million, $32.8 million, and $30.5 million in 2009, 2008, and 2007 respectively. Related reserves totaled $13.8 million and $9.2 million at December 31, 2009 and 2008, respectively.

Co-Promotion Agreement: In April 2006, we entered into a Co-Promotion and Strategic Marketing Services Agreement with AstraZeneca UK Limited, a wholly owned subsidiary of AstraZeneca PLC. In November 2008, we entered into an agreement to end the Co-Promotion Agreement, with the agreement effectively ending in January 2009. We recorded revenue of $36.4 million in each of the years ended December 31, 2008 and 2007 relating to deferred revenue associated with an up-front cash payment from AstraZeneca of $200 million in 2006 under the Co-Promotion Agreement.

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Abraxane^® Revenue

We recognize revenue from the sale of Abraxane^® 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 wholesalers receive the product. At the time of sale, as further described below, we reduce sales and provide for estimated chargebacks, bad debts, customer or Medicaid rebates, product returns and customer credits. Our methodology used to estimate and provide for theses sales provisions was consistent across all periods presented. Accruals for sales allowance are presented in our financial statements as a reduction of sales and accounts receivable and, for customer or Medicaid rebates, in accrued liabilities. We regularly review information related to these estimates and adjust 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. 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.

Our sales provisions totaled $32.8 million, $30.5 million and $18.5 million in 2008, 2007 and 2006 respectively. Related reserves totaled $9.2 million and $7.9 million at December 31, 2008 and 2007, respectively.

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Co-Promotion Agreement: On April 26, 2006, we entered into a Co-Promotion and Strategic Marketing Services Agreement with AstraZeneca UK Limited, a wholly owned subsidiary of AstraZeneca PLC (see Note 3—Acquisitions and Other Transactions). The parties entered into an agreement to end the Co-Promotion Agreement in November 2008, with the agreement effectively ending in January 2008. We recorded revenue of $36.4 million in each of the years ended December 31, 2008 and 2007 and $18.2 million in 2006 relating to deferred revenue associated with an up-front cash payment from AstraZeneca of $200 million in 2006 under the Co-Promotion Agreement. At December 31, 2008 and 2007, unearned revenue associated with the Co-Promotion Agreement of $0 and $145.5 million, respectively, was recorded as deferred revenue on the balance sheet.

Abraxane^® Revenue

We recognize revenue from the sale of Abraxane^® 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

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the wholesalers receive the product. At the time of sale, as further described below, we reduce sales and provide for estimated chargebacks, contractual allowances, customer or Medicaid rebates, product returns and customer credits. Our methodology used to estimate and provide for theses sales provisions was consistent across all periods presented. Accruals for sales allowance are presented in our financial statements as a reduction of sales and accounts receivable and, for contractual allowances, in accrued liabilities. We regularly review information related to these estimates and adjust 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. We believe that this internal historical data, in conjunction with periodic review of available third-party data (as described below) and updated for any applicable changes in available information, provides a reliable basis for such estimates.

We periodically, as we believe is warranted, review the wholesale supply levels of our product by reviewing inventory reports purchased or available from wholesalers, evaluating our unit sales volume and incorporating data from third-party market research firms. Based on these activities, we attempt to keep a consistent wholesale stocking level of approximately two to six weeks. From time to time we enter into inventory management agreements with our wholesale customers which require us to pay a fee in connection with their distribution of our product or other services, possibly including sales data and other services and contractual rights for us. In addition, we may be required to enter into such agreements in the future in order to maintain our relationships with other such wholesalers. We are unable to ascertain the potential impact of any such future agreements on our sales, but do not believe that such agreements would result in a substantial change in wholesale stocking levels of our product as compared to current levels.

Our sales provisions totaled $30.5 million, $18.5 million and $26.5 million in 2007, 2006 and 2005 respectively. Related reserves totaled $7.9 million and $5.5 million at December 31, 2007 and 2006, respectively.

Co-Promotion Agreement: On April 26, 2006, we entered into a Co-Promotion and Strategic Marketing Services Agreement with AstraZeneca UK Limited, a wholly owned subsidiary of AstraZeneca PLC (see “Note 4—Acquisition of Assets”).

During the years ended December 31, 2007 and 2006, we recorded revenue of $36.4 million and $18.2 million, respectively, relating to deferred revenue associated with the co-promotion agreement. At December 31, 2007 and 2006, unearned revenue associated with the co-promotion agreement of $145.5 million and $181.8 million, respectively, was recorded as deferred revenue on the balance sheet. The remaining deferred revenue will be recorded as revenue ratably over the remaining four-year term of the agreement.

Abraxane^®
Revenue

We recognize revenue from the sale of AbraxaneFACE="Times New Roman" SIZE="1">^® 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

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the wholesalers receive the product. At the time of sale, as further described below, we reduce sales and provide for estimated chargebacks, contractual
allowances, customer or Medicaid rebates, product returns and customer credits. Our methodology used to estimate and provide for theses sales provisions was consistent across all periods presented. Accruals for sales allowance are presented in our
financial statements as a reduction of sales and accounts receivable and, for contractual allowances, in accrued liabilities. We regularly review information related to these estimates and adjust 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. We believe that this internal historical data, in conjunction with periodic review of available third-party data (as described below) and updated for any applicable changes in
available information, provides a reliable basis for such estimates.

We periodically, as we believe is warranted, review the wholesale
supply levels of our product by reviewing inventory reports purchased or available from wholesalers, evaluating our unit sales volume and incorporating data from third-party market research firms. Based on these activities, we attempt to keep a
consistent wholesale stocking level of approximately two to six weeks. From time to time we enter into inventory management agreements with our wholesale customers which require us to pay a fee in connection with their distribution of our product or
other services, possibly including sales data and other services and contractual rights for us. In addition, we may be required to enter into such agreements in the future in order to maintain our relationships with other such wholesalers. We are
unable to ascertain the potential impact of any such future agreements on our sales, but do not believe that such agreements would result in a substantial change in wholesale stocking levels of our product as compared to current levels.

Our sales provisions totaled $30.5 million, $18.5 million and $26.5 million in 2007, 2006 and 2005 respectively. Related reserves totaled $7.9 million
and $5.5 million at December 31, 2007 and 2006, respectively.

Co-Promotion Agreement: On April 26, 2006, we entered
into a Co-Promotion and Strategic Marketing Services Agreement with AstraZeneca UK Limited, a wholly owned subsidiary of AstraZeneca PLC (see “Note 4—Acquisition of Assets”).