Summary of ABRAXIS BIOSCIENCE, INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q and other documents we file with the Securities and Exchange Commission contain forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. In addition, we may make forward-looking statements in press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Such forward-looking statements, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors, which include, but are not limited to:

• the market adoption of and demand for our existing and new pharmaceutical products, including Abraxane ® and our proprietary anesthetic/analgesic products;

• the amount and timing of costs associated with Abraxane ® ;

• the actual results achieved in further clinical trials of Abraxane ® may or may not be consistent with the results achieved to date;

• the impact of competitive products and pricing;

• the impact of any adverse litigation;

• the ability to successfully manufacture products in an efficient, time-sensitive and cost effective manner;

• the impact on our products and revenues of patents and other proprietary rights licensed or owned by us, our competitors and other third parties;

• our ability, and that of our suppliers, to comply with laws, regulations and standards, and the application and interpretation of those laws, regulations and standards, that govern or affect the pharmaceutical industry, the non-compliance with which may delay or prevent the sale of our products;

• the difficulty in predicting the timing or outcome of product development efforts and regulatory approvals;

• the availability and price of acceptable raw materials and components from third-party suppliers;

• evolution of the fee-for-service arrangements being adopted by our major wholesale customers;

• inventory reductions or fluctuations in buying patterns by wholesalers or distributors; and

• the impact of recent legislative changes to the governmental reimbursement system.

Additionally, there are several factors and assumptions that could affect our plan to separate into two independent publicly-traded companies and cause actual results to differ materially from those expressed in our forward looking statements:

• increased demands on our management team as a result of the proposed separation; and

• our ability to satisfy certain conditions precedent.

Forward-looking statements also include the assumptions underlying or relating to any of the foregoing or other such statements. When used in this report, the words "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict" and similar expressions are generally intended to identify forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, whether as a result of new information, changes in assumptions, future events or otherwise. Readers should carefully review the factors described in "Item 1A: Risk Factors" of Part II of this Form 10-Q and "Item 1A: Risk Factors" of our Form 10-K for the period ended December 31, 2006" and other documents we file from time to time with the Securities and Exchange Commission. Readers should understand that it is not possible to predict or identify all such factors. Consequently, readers should not consider any such list to be a complete set of all potential risks or uncertainties.

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OVERVIEW

The following management's discussion and analysis of financial condition and results of operations, or MD&A, is intended to assist the reader in understanding our company. The MD&A is provided as a supplement to, and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2006, including "Item 1: Business"; "Item 1A: Risk Factors", "Item 6: Selected Financial Data"; and "Item 8: Financial Statements and Supplemental Data."

Background

Abraxis BioScience, Inc., formerly known as American Pharmaceutical Partners, Inc., or APP, is an integrated global biopharmaceutical company dedicated to meeting the needs of critically ill patients. We develop, manufacture and market one of the broadest portfolios of injectable products and leverage revolutionary technology such as our nab ™ platform to discover and deliver breakthrough therapeutics that transform the treatment of cancer and other life-threatening diseases. The first FDA approved product to use this nab ™ platform, Abraxane ®, was launched in 2005 for the treatment of metastatic breast cancer. We believe that we are the only independent U.S. public company with a primary focus on the injectable oncology, anti-infective, anesthetic/analgesic and critical care markets, and we further believe that we offer one of the most comprehensive injectable product portfolios in the pharmaceutical industry. We manufacture products in each of the three basic forms in which injectable products are sold:
liquid, powder and lyophilized, or freeze-dried.

We are a Delaware corporation that was formed in 2001 as successor to a California corporation formed in 1996. On April 18, 2006, we completed a merger with American BioScience, Inc., or ABI. In connection with the closing of that merger, our certificate of incorporation was amended to change our name from American Pharmaceutical Partners, Inc. to Abraxis BioScience, Inc.

The unaudited condensed consolidated financial statements include our assets, liabilities and results of operations and those of our wholly owned subsidiaries, Pharmaceutical Partners of Canada, Inc., Abraxis BioScience Manufacturing, LLC, Pharmaceutical Partners Switzerland GmbH, VivoRx AutoImmune, Inc., Chicago BioScience, LLC and Transplant Research Institute, as well as our majority-owned subsidiaries, Resuscitation Technologies, LLC and Cenomed BioSciences, LLC, and our investment in Drug Source Company, LLC, which is accounted for using the equity method. All material intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the accompanying condensed consolidated financial statements were reclassified to conform to current period presentation, including the reclassification of $52 million of current deferred tax assets to reduction in non-current deferred tax liability.

We operate in two business segments: Abraxis BioScience (ABI), representing the combined operations of Abraxis Oncology and Abraxis Research; and Abraxis Pharmaceutical Products (APP), representing the hospital-based operations. ABI focuses primarily on our internally developed proprietary product, Abraxane ®, and our proprietary product pipeline. APP manufactures and markets one of the broadest portfolios of injectable drugs, including oncology, critical care, anti-infectives, and markets our proprietary anesthetic/analgesic products. Comparative segment revenues and related financial information for the three and nine months ended September 30, 2007 and 2006 are presented in "Note 10, Segment Information" to our unaudited condensed consolidated financial statements.

Separation

On July 2, 2007, we announced that our board of directors approved a plan to separate into two independent publicly-traded companies, one holding the Abraxis Pharmaceutical Products business, which focuses primarily on manufacturing and marketing our oncology, anti-infective and critical care hospital-based generic injectable products and marketing our proprietary anesthetic/analgesic products (which we refer to collectively as the "hospital-based business"), and the other holding the Abraxis Oncology and Abraxis Research businesses, which focus primarily on our internally developed proprietary product, Abraxane®, and our proprietary product candidates (which we refer to as the "proprietary business"). We refer to the proprietary business following the separation as "New Abraxis," which will change its name to Abraxis BioScience, Inc. We will continue to operate the hospital-based business (which we refer to as "New APP" following the separation) under the name APP Pharmaceuticals, Inc. following the separation the stockholders as of the record date will be entitled to receive shares of both New Abraxis and New APP in connection with the separation.

New APP and New Abraxis expect to enter into a series of agreements, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax allocation agreement, a manufacturing agreement and various real estate leases. The transaction, which is expected to close in the fourth quarter of 2007, is subject to obtaining a favorable private letter ruling from the Internal Revenue Service and an opinion from tax counsel with respect to the U.S. federal income tax consequences of certain aspects of the proposed separation. We received the private letter ruling from the Internal Revenue Service on October 5, 2007. Consummation of the separation is also subject to certain other conditions. Approval by our stockholders is not required as a condition to the consummation of the proposed separation.

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Also, in connection with the separation, it is anticipated that we and/or one or more of our subsidiaries will incur approximately $1.0 billion of indebtedness and, in addition, will enter into a $150 million revolving credit facility. Approximately $265 million of the proceeds of this indebtedness will be used to repay in full our existing revolving credit facility; approximately $20 million will be used to pay fees and expenses related to the debt financing; and approximately $715 million will be contributed to New Abraxis. New APP will be solely responsible for servicing the debt following the transactions.

The transaction is scheduled to close on November 13, 2007.

Recent Developments

Exclusive License of Intellectual Property Portfolio

In July 2007, we entered into an agreement with the University of Southern California (USC) that provides us with the exclusive worldwide development and commercialization rights for an intellectual property portfolio of diagnostic protein biomarkers for therapy response, therapy toxicity and disease recurrence in colorectal cancers (CRCs). The intellectual property licensed is based on USC research by Associate Professor of Medicine Heinz-Joseph Lenz and colleagues.

Biocon Agreements

In June 2007, we entered into an agreement with Biocon Limited under which we licensed the right to develop and commercialize a biosimilar version of G-CSF (granulocyte-colony stimulating factor) in North America and the European Union. G-CSF is an haematopoietic growth factor that works by encouraging the bone marrow to produce more white blood cells. Therapeutic G-CSF is primarily used for the treatment of neutropenia, the lowering of the white blood cells that fight infections. Biocon has received regulatory approval from the Indian DCGI for the treatment of neutropenia in cancer patients. Under the terms of the agreement, we paid Biocon a $7.5 million licensing fee upon achieving the only milestone under the agreement and, following regulatory approval in the licensed territories, we will pay royalties to Biocon based on a percentage of net sales under the agreement.

In June 2007, we also entered into an agreement with Biocon Limited under which we granted Biocon the right to market and sell Abraxane® in India, Pakistan, Bangladesh, Sri Lanka, United Arab Emirates, Saudi Arabia, Kuwait and certain other South Asian and Persian Gulf countries. We will receive payments from Biocon based on the higher of a percentage of net sales or a specified profit split under the license agreement. In October 2007, we received regulatory approval from India's Drug Controller General to market Abraxane® for the treatment of metastic breast cancer in India. Commercial introduction of Abraxane ® in the Indian market is expected in 2008 following completion of appropriate importation certifications.

Acquisition of Manufacturing Facility in Phoenix, Arizona

In July 2007, we acquired Watson Pharmaceuticals, Inc.'s sterile injectable manufacturing facility in Phoenix, Arizona. This fully-equipped facility, comprising approximately 200,000 square feet, includes manufacturing as well as chemistry and microbiology laboratories and has the ability to manufacture lyophilized powders, suspension products, and aqueous and oil solutions. In connection with the acquisition, we have agreed to contract manufacture certain products for and on behalf of Watson for a specified period of time.

California NanoSystems Institute

In July 2007, we entered into a research collaboration agreement with the California NanoSystems Institute, or "CNSI", at UCLA under which the parties agreed to collaborate on early research in nanobiotechnology for the advancement of new technologies in medicine. Under the agreement, we agreed to contribute $5 million over five years to fund collaborative projects in the new CNSI building at UCLA. At the end of the five-year term, we will evaluate a second five-year period with similar terms.

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RESULTS OF OPERATIONS

Three Months Ended September 30, 2007 and September 30, 2006

The following table sets forth the results of our operations for each of the three months ended September 30, 2007 and 2006, and forms the basis for the following discussion of our operating activities: