Abraxis BioScience (ABII)

Substantial sales of our common stock following the separation and distribution could depress the market price of our common stock.

All of the shares of our common stock issued in the distribution, other than shares issued to our affiliates, will be eligible for immediate resale in the public market. Although shares issued to our affiliates are not immediately freely tradable, under the provisions of the registration rights agreement entered into in connection with the 2006 Merger, we will grant registration rights to the former ABI shareholders, including our Chief Executive Officer, Dr. Soon-Shiong. Under the registration rights agreement, the former ABI shareholders will have the right to require us to register all or a portion of the shares of our common stock they receive in the distribution. In addition, the former ABI shareholders may require us to include their shares in future registration statements that we file and our Chief Executive Officer may require us to register shares for resale on a Form S-3 registration statement. Upon registration, the registered shares generally will be freely tradeable in the public market without restriction. However, in connection with any underwritten offering, the holders of registrable securities will agree to lock up any other shares for up to 90 days and will agree to a limit on the maximum number of shares that can be registered for the account of the holders of registrable securities under so-called “shelf” registration statements. Please see “Certain Relationships and Related Transactions—Registration Rights” for additional information regarding our registration obligations.

It is possible that some Abraxis BioScience stockholders will sell shares of our common stock received in the distribution for various reasons, including the fact that our business profile or market capitalization as an independent company does not fit their investment objectives. Substantial sales of our shares, or the perception that such sales might occur, could depress the market price for our shares. Our Chief Executive Officer and entities affiliated with him will beneficially own approximately 84% of our outstanding common stock following the separation. In connection with Old Abraxis requesting from the Internal Revenue Service a private letter ruling regarding the U.S. federal income tax consequences of the transactions, our Chief Executive Officer, his wife and certain entities affiliated with him have represented to the Internal Revenue Service that they have no current plan or intention to sell their shares after the distribution. We cannot predict whether substantial amounts of our common stock will be sold in the open market following the distribution.