Abraxis BioScience (ABII)

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.

Available For Sale Securities

We determine the appropriate classification of our investments in debt and equity securities at the time of purchase and reevaluate 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, which is based on quoted market prices (Level 1 valuation) and the unrealized gains and losses, net of tax, are included in the determination of comprehensive income and reported in stockholders’ equity. As of March 31, 2008, we had $5.6 million in marketable equity securities that are designated as available-for-sale securities. At December 31, 2007, we had $3.7 million in available for sale equity securities. For the three months ended March 31, 2008 and 2007, we had no realized loss on available for sale securities.

7

Table of Contents

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 March 31, 2008, we believe that the cost basis of our available-for-sale securities was recoverable in all material respects.