This excerpt taken from the ABII 8-K filed Nov 8, 2007.
Separation from Abraxis BioScience
We were incorporated under the laws of the State of Delaware in June 2007 as a wholly-owned subsidiary of Abraxis BioScience, Inc. We will have no material assets or activities until Abraxis BioScience contributes to us the business described in this information statement, which is expected to occur immediately prior to the distribution. Following the distribution, we will be an independent public company. Prior to the distribution, we will enter into several agreements with Abraxis BioScience related to, among other things, manufacturing, transition services and a number of ongoing commercial relationships. The transition services agreement provides for specified charges at fair market value based on the providing companys actual costs of providing the services. With limited exceptions, these transition services are not expected to extend beyond two years from the distribution date. The pricing terms for goods and services covered by the commercial agreements will reflect negotiated prices.
Our financial statements, which are discussed below, reflect the historical financial position, results of operations and cash flows of the proprietary products business to be transferred to us from Abraxis BioScience as part of the separation and distribution. The sales and marketing portion of our business has historically been
owned and operated by Abraxis BioScience. Prior to the completion of the merger between American BioScience, Inc. and American Pharmaceutical Partners, Inc. (which was subsequently renamed as Abraxis BioScience, Inc.) in April 2006, the research and development portion of our business was operated by American BioScience. We sometimes refer to American BioScience as ABI, American Pharmaceutical Partners as APP and the merger between ABI and APP as the 2006 Merger. Our financial statements have been prepared and are presented as if we had been operating as a separate entity using the historical cost basis of the assets and liabilities of Abraxis BioScience and including the historical operations of the proprietary products business to be transferred to us from Abraxis BioScience as part of the separation. For each of the periods presented, we were fully integrated with Abraxis Bioscience and the accompanying financial statements reflect the application of certain estimates and allocations. Our statements of operations include all revenues and costs that are directly attributable to Abraxis BioSciences proprietary products business to be transferred to us. In addition, certain expenses of Abraxis BioScience have been allocated to us using various assumptions that, in the opinion of management, are reasonable. These expenses include an allocated share of product development and other operating expenses (primarily related to facility, human resources, accounting and other administrative costs) which were allocated to us based on estimated time and resources devoted to Abraxane®. The allocated costs totaled $25.8 million, $13.2 million and $7.5 million for the years ended December 31, 2006, 2005 and 2004, respectively, and $31.1 million and $15.6 million for the six months ended June 30, 2007 and 2006, respectively. The financial information included herein may not necessarily reflect our financial position, results of operations and cash flows in the future or what our financial position, results of operations and cash flows would have been had we been a stand-alone company during the periods presented.