Abraxis BioScience (ABII)

12. Leases and Commitments

Leases

We have entered into various operating lease agreements for warehouses, office space, automobiles, communications, information technology equipment and software and office equipment, including real estate leases as described in Note 6—Related Party Transactions. Rental expense amounted to $11.4 million, $10.1 million, and $5.6 million for the years ended December 31, 2009, 2008 and 2007, respectively. Related party rent expense totaled $2.8 million, and $3.3 million for the years ended December 31, 2009 and 2008, respectively.

As of December 31, 2009, future annual minimum lease payments related to non-cancelable operating leases, including amounts pertaining to related party leases are as follows:

Purchase Obligations

As of December 31, 2009, we purchased all of our approved paclitaxel supply from one supplier. We believe our supply risk with respect to this supplier is minimal given that the supplier is well-regarded within the industry and we have not historically experienced supply shortages with this supplier. Additionally, we maintain

83

Table of Contents

an adequate safety stock supply of paclitaxel to mitigate any supply disruption. As of December 31, 2009 and 2008, our inventory included $21.0 million and $34.4 million, respectively, of paclitaxel. As of December 31, 2009, we have no commitment agreement to purchase any paclitaxel in 2010.

We also have other material supply agreements that require us to purchase approximately $32.3 million of material supply in each of the next five years.

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 patients enrolled in the clinical study. If all milestones in these agreements were achieved, related milestone commitments to be paid by us in 2010 through 2014 would approximate $83.0 million. Based on our current estimates of patient enrollment, approximately $53.4 million would be payable in 2010, approximately $24.1 million would be payable in 2011, approximately $2.9 million would be payable in 2012, approximately $1.5 million would be payable in 2013 and approximately $1.1 million would be payable in 2014.

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 these libraries, which we expect to occur within the next five years.

We have entered into various collaborative agreements under which we have agreed to provide funding to academic and clinical trial organizations of up to $53.8 million for research and other projects over the next five years. Even though we cannot predict the timing, we generally can control the timing and amount of spending as the projects require our approval in advance of funding.

8. Leases and Commitments

Leases

We have entered into various operating lease agreements for warehouses, office space, automobiles, communications, information technology equipment and software and office equipment, including real estate leases as described in Note 7—Related Party Transactions. Rental expense amounted to $10.1 million, $5.6 million and $3.3 million for the years ended December 31, 2008, 2007 and 2006, respectively.

As of December 31, 2008, future annual minimum lease payments related to non-cancelable operating leases, including amounts pertaining to related party leases are as follows:

Purchase Obligations

As of December 31, 2008, we purchased all of our approved paclitaxel supply from one supplier. We believe our supply risk with respect to this supplier is minimal given that the supplier is well-regarded within the industry and we have not historically experienced supply shortages with this supplier. Additionally, we maintain an adequate safety stock supply of paclitaxel to mitigate any supply disruption. As of December 31, 2008 and 2007, our inventory included $34.4 million and $35.9 million, respectively, of paclitaxel. As of December 31, 2008, we have no commitment agreement to purchase any paclitaxel in 2009.

We also have other material supply agreements that require us to purchase approximately $26.6 million of material supply in each of the next five years.

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 patients enrolled in the clinical study. If all milestones in these agreements were achieved, related milestone

79

Table of Contents

commitments to be paid by us in 2009 through 2013 would approximate $42.6 million. Based on our current estimates of patient enrollment, approximately $8 million would be payable in 2009, approximately $13.6 million would be payable in 2010, approximately $9 million would be payable in 2011, approximately $6 million would be payable in 2012 and approximately $6 million would be payable in 2013.

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 these libraries, which we expect to occur within the next five years.

We have entered into various collaborative agreements under which we have agreed to provide funding to academic and clinical trial organizations of up to $65.5 million for research and other projects over the next five years. Even though we cannot predict the timing, we generally can control the timing and amount of spending as the projects require our approval in advance of funding.

7. Leases and Commitments

We have entered into various operating lease agreements for warehouses, office space, automobiles, communications, information technology equipment and software and office equipment, including real estate leases as described in Note 6—Related Party Transactions. Rental expense amounted to $5.6 million, $3.3 million and $1.2 million for the years ended December 31, 2007, 2006 and 2005, respectively.

81

Table of Contents

As of December 31, 2007, future annual minimum lease payments related to non-cancelable operating leases, including amounts pertaining to related party leases are as follows:

Purchase Obligations

As of December 31, 2007, we purchased all of our approved paclitaxel supply from one supplier. We believe our supply risk with respect to this supplier is minimal given that the supplier is well-regarded within the industry and we have not historically experienced supply shortages with this supplier. Additionally, we maintain an adequate safety stock supply of paclitaxel to mitigate any supply disruption. As of December 31, 2007, our inventory included $35.9 million of paclitaxel (whole plant). As of December 31, 2007, we have a commitment agreement to purchase $3.5 million of paclitaxel in 2008.

We also have equipment supply agreements that requires us to purchase approximately $0.2 million of equipment in each of the next five years.

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 patients enrolled in the clinical study. If all milestones in these agreements were achieved, related milestone commitments to be paid by us in 2008 through 2012 would approximate $29.8 million. Based on our current estimates of patient enrollment, approximately $17.3 million would be payable in 2008, approximately $7.1 million would be payable in 2009, approximately $3.4 million would be payable in 2010, approximately $1.8 million would be payable in 2011 and approximately $0.2 million would be payable in 2012.

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 these libraries, which we expect to occur within the next five years.

We have entered into various collaborative agreements under which we have agreed to provide funding to academic and clinical trial organizations of up to $65.2 million for research and other projects over periods of time of up to six years. Even though we cannot predict the timing, we generally can control the timing and amount of spending as the projects require our approval in advance of funding.

8. Leases and Commitments

New Abraxis has entered into various operating lease agreements for warehouses, office space, automobiles, communications, information technology equipment and software and office equipment. Rental expense amounted to $3.3 million, $1.2 million and $0.9 million for the years ended December 31, 2006, 2005 and 2004, respectively.

F-18

Table of Contents

As of December 31, 2006, future annual minimum lease payments related to non-cancelable operating leases were as follows: