Abraxis BioScience (ABII)

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual obligations represent future cash commitments and liabilities under agreements with third parties, and exclude contingent liabilities for which we cannot reasonably predict future payment. Accordingly, the table below excludes contractual obligations relating to milestones and royalty payments due to third parties contingent upon certain future events. Such events could include, but are not limited to, development milestones, regulatory approvals and product sales. The following information summarizes our contractual obligations and other commitments, consisting solely of operating leases, as of December 31, 2006:

Purchase Obligations

We have agreements for the bulk purchase of paclitaxel. As of December 31, 2006, we had a commitment to purchase $3.1 million of paclitaxel in 2007.

Clinical Trial and Other Commitments

We have entered into various clinical trial agreements with third parties for the management, planning and execution of clinical trials. These agreements generally include milestone payments based on the number of patient enrolled in the clinical study. If all milestones in these agreements were achieved, related milestone commitments to be paid by us in 2007 through 2011 would approximate $5.4 million. Based on our current estimates of patient enrollment, approximately $3.4 million would be payable in 2007, approximately $1.2 million would be payable in 2008, approximately $0.5 million would be payable in 2009 and less than $0.2 million would be payable in each of 2010 and 2011.

We own a library of natural drug discovery soil samples and related strains acquired from around the world, which is intended for use in the discovery of new chemical entities. We are committed to paying up to $4.2 million upon the achievement of certain milestones related to this library.

We do not currently have any off-balance sheet arrangements that are material or reasonably likely to be material to our financial position or results of operations.

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Table of Contents

AstraZeneca 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, to co-promote Abraxane^® in the United States. Under the terms of the agreement, AstraZeneca paid us an up-front fee of $200.0 million and will equally share in future costs associated with advertising and promotions of Abraxane^® in the United States and certain clinical trials that are part of the overall clinical development program. Further milestone payments will be made to us upon the achievement of new indication approvals within pre-specified timelines. The co-promotion agreement, which began on July 1, 2006, will run for five and a half years. AstraZeneca will receive a 22% commission on net sales of Abraxane^® during the term of the agreement, with a trailing commission of ten percent for the first year and five percent for the second year following the five and a half year term. We will retain all responsibility for clinical and regulatory development, manufacture and distribution of the product.

Taiho License Agreement: On May 27, 2005, we entered into a license agreement with Taiho Pharmaceutical Co., Ltd, or Taiho, a subsidiary of Otsuka Pharmaceutical Ltd., under which we granted Taiho the exclusive rights to market and sell Abraxane^® in Japan to Taiho. Under the agreement, the parties established a steering committee, comprised of three representatives of from each of our company and Taiho, to oversee the preclinical and clinical development of Abraxane^® in Asia for the treatment of breast, lung, gastric, and other solid tumors. The steering committee is required to meet at least once annually. In addition, under the agreement, the steering committee established a development working group, comprised of an equal number of representatives from both our company and Taiho, which is required to meet at least once quarterly until regulatory approval of Abraxane^® is first obtained in Japan. The agreement provides for a non-refundable $20.0 million upfront payment, $38.5 million in potential milestone payments contingent upon the achievement of various clinical, regulatory and sales objectives and, following regulatory approval of Abraxane^® in Japan, royalties based on net sales under the agreement. Due to our continuing involvement under the agreement through the steering committee and the development working group, the $20.0 million non-refundable upfront payment has been deferred. At the time the upfront payment was made, we estimated that it would take approximately five years to receive regulatory approval for the first indication of Abraxane^® in Japan (following which approval, the steering committee’s responsibilities would be substantially diminished) and, based on internal market assessments, that Abraxane^® could begin to face competition in Japan as early as seven years after entering into the agreement. We believe these estimates remain accurate. Accordingly, the upfront payment is being recognized as research revenue ratably over seven years.