said Monday that it will divide itself into a hospital-based product business and a proprietary product business.
The 11-year-old, Los Angeles-based drugmaker is separating Abraxis Pharmaceutical Products from Abraxis Oncology and Abraxis Research, which will become the new Abraxis BioScience. The company said this will allow both new companies to "deliver on their strategic visions and compete more effectively in their specialized marketplaces with their strategic visions and compete more effectively in their specialized marketplaces with their differing capital requirements and business mandates."
The separation should be tax-free to the company and its shareholders, who post-transaction will own one share of Abraxis Pharmaceutical Products (APP) and one share of Abraxis BioScience, for each previously held. The company expects APP will trade on the
under the symbol APPX, and the new Abraxis BioScience will be traded on the same index under the existing ABBI symbol.
Abraxis said Deutsche Bank and Wachovia Bank will underwrite $1.45 billion of financing, with $1 billion earmarked for Abraxis BioScience to be focused on its nab platform, while another portion will be used to repay existing debt.
Chairman and CEO Patrick Soon-Shiong said "the separation will permit each company to focus on their respective pipelines, and business development opportunities and compete more effectively in their individual marketplaces."
The company said it expects to register a Form 10 regulatory filing with more detailed information within the third quarter.
Shares of Abraxis were recently up 27 cents, or 1.2%, at $22.52.