APP Pharmaceuticals Reports Record Net Revenues of $647 Million and Gross Profit of $315 Million from Continuing Operations in 2007

Business Wire, March 7, 2008

2007 Income from Continuing Operations, Net of Income Tax, Increased to $82 Million Compared with $55 Million in 2006

SCHAUMBURG, Ill. -- APP Pharmaceuticals, Inc. (Nasdaq:APPX), a leading manufacturer of multi-source and branded injectable pharmaceutical products, today reported audited financial results for the fourth quarter and full year ended December 31, 2007. As a result of the separation of Abraxis Bioscience from APP Pharmaceuticals, APP's business is reported, for all periods reported, on a continuing operations basis and Abraxis Bioscience's business, as well as a majority of separation related costs, is reported in discontinued operations.

"APP has emerged as a market leading injectable products company with a sharpened business focus, flexible, high quality production, and a robust pipeline. With this broad and growing platform in place, APP expects to produce significant growth in net revenues and earnings as well as strong cash flow in 2008," stated Patrick Soon-Shiong, M.D., Chief Executive Officer and Chairman of APP Pharmaceuticals.

For 2007, net revenues increased 11 percent to $647.4 million, compared with $583.2 million in 2006. Gross profit, excluding $16.4 million for amortization of purchased products, was $331.7 million, or 51 percent of net revenues. Income from continuing operations, net of income taxes, grew 49 percent to $82.2 million, or $0.51 per diluted share, from $55.2 million, or $0.35 per diluted share, in 2006. Net income, including results from discontinued operations, was $34.4 million, or $0.21 per diluted share, versus a net loss of $46.9 million, or $0.30 per basic share, in 2006.

The company reported full-year adjusted income from continuing operations, net of income tax, of $136.2 million and adjusted income from continuing operations, net of income tax, per diluted share of $0.85, which, in each case excludes Puerto Rico facility pre-launch costs, amortization expense, non-cash stock compensation expense and other items (see table at the end of this new release).

Comparison of adjusted income from continuing operations is presented below:

[TABLE OMITTED]

On a GAAP basis, the company reported income from continuing operations, net of income tax; loss from discontinued operations, net of income tax; and net income; as well as diluted per share amounts, as follows:

[TABLE OMITTED]

Total operating expenses were $155.2 million, compared with $154.3 million in 2006. Research and development expenses were $46.5 million in 2007, compared with $27.8 million in 2006. This increase is primarily due to pre-launch activities at the Puerto Rico manufacturing facility. SG&A expenses in 2007 were $90.2 million, or 14 percent of net revenues, compared with $80.7 million, or 14 percent of net revenues, in the prior year.

"APP continues to be a leader in the industry with 15 drug approvals in 2007 and has increased its capacity with the addition of commercial production at our Puerto Rico facility," said Tom Silberg, president of APP Pharmaceuticals. "Our team is effectively executing on our dual manufacturing capabilities, enabling the company to address market needs as they arise. We expect to remain a market leader in new product approvals while continuing to build APP's pipeline and manufacturing capabilities during 2008."

Fourth Quarter 2007 Financial Results

Net revenues were $194.6 million, compared with $199.7 million in the fourth quarter of 2006. Gross profit was $101.6 million, or 52 percent of net revenues, compared with $108.4 million, or 54 percent of net revenues, in the fourth quarter of 2007.

Income from continuing operations, net of income tax, was $31.7 million, or $0.20 per diluted share, compared with $35.4 million, or $0.22 per diluted share, in the 2006 fourth quarter. Adjusted income from continuing operations, net of income tax, was $45.7 million, or $0.28 per diluted share, compared with $29.4 million, or $0.18 per diluted share, for the prior year's fourth quarter. Net income was $8.5 million, or $0.05 per diluted share, which includes a loss from discontinued operations of $23.1 million, equal to $0.15 per diluted share. Net income for the 2006 fourth quarter was $28.4 million, or $0.18 per diluted share, which includes a loss from discontinued operations of $6.9 million, equal to $0.04 per diluted share.

Total operating expenses were $41.7 million, compared with $42.6 million for same quarter in 2006. Research and development expenses were $12.5 million, compared with $10.2 million in the 2006 fourth quarter. SG&A expenses decreased to $23.4 million, or 12 percent of net revenues, compared with $27.8 million, or 14 percent of net revenues, in the prior year's fourth quarter.

In the fourth quarter of 2007, APP launched liquid and lyophilized Fludarabine Phosphate as well as four dosage forms of Epirubicin Hydrochloride Injection. Two of the codes were not previously available on the market. Epirubicin belongs to a class of drugs called anthracyclines and is the foundation of many chemotherapy regimens.