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

APP currently has more than 60 product candidates in various stages of development, including 30 ANDAs pending with the FDA, representing approximately $5 billion in 2007 annualized branded sales.

Recent Events

On February 19, 2008, the company announced that, in response to FDA and hospital concerns about a potential shortage of therapeutic heparin, it would immediately increase manufacturing of this product. Since that time, the company has ramped up production to a level the company believes is sufficient to meet the entire U.S. demand.

In February 2008, APP received approval for Irinotecan Hydrochloride Injection. The company has secured contracts and begun marketing and shipping the product.

The FDA inspected and approved the company's facility in Puerto Rico for commercial manufacturing. APP has transferred to this facility and begun manufacturing three products.

2008 Financial Guidance

* Total net revenues are expected to be in the range of $730 to $750 million;

* Gross margin is anticipated to be approximately 50 percent relative to total net revenues. This excludes $16.4 million in acquired product portfolio amortization and approximately $10 million of capacity optimization and product transfer costs related to Puerto Rico;

* R&D expense is expected to be approximately $40 to $45 million. This includes $10 million for launch costs associated with the Puerto Rico facility;

* SG&A expenses are anticipated to be in the range of $85 to $90 million, which includes expected non-cash stock compensation expense of $8 to $10 million;

* Interest expense is expected to be 5.75 percent or approximately $58 million;

* Income tax rate is expected to be approximately 37.5 percent;

* Depreciation expense is expected to be approximately $18 to $23 million;

* Adjusted EBITDA is expected to be $285 to $300 million. Adjustments include costs associated with the launch of the Puerto Rico facility, amortization expense and non-cash compensation;

* Adjusted EPS is anticipated to be $0.80 to $0.90, which includes approximately $0.22 per share after-tax interest expense. Adjustments include costs associated with the launch of the Puerto Rico facility, amortization expense and non-cash compensation.

Conference Call Information

On Friday, March 7, 2008, the company will host a conference call with interested parties beginning at 8:30 a.m. PT (11:30 a.m. ET) to review the company's financial results. The conference call will be available to interested parties through a live audio webcast at www.APPpharma.com and www.thomsonone.com. The call will also be archived and accessible at both sites for six months.

Non-GAAP Financial Measures

The company believes that its presentation of non-GAAP financial measures, such as adjusted net income, adjusted income from continuing operations, EBITDA and adjusted EBITDA, provides useful supplementary information to investors in understanding the underlying operating performance of the company and facilitates additional analysis by investors. The company also uses non-GAAP financial measures internally for operating, budgeting and financial planning purposes. The non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance calculated in accordance with GAAP. A reconciliation of GAAP net income to adjusted net income for the three and 12 months ending December 31, 2007 and December 31, 2006 is included with this news release.