SCHAUMBURG, Ill., Aug. 25 /PRNewswire-FirstCall/ -- American Pharmaceutical Partners, Inc. (Nasdaq: APPX) (APP) today said that its program to upgrade the facility and equipment and re-validate production conditions at its Melrose Park, IL manufacturing facility, which is being conducted as part of the company's routine annual maintenance program, will require more time than initially anticipated. The upgrading and validation program at APP's Melrose Park plant is part of a company-wide strategic initiative under which APP has invested more than $120 million to date since 2001 expanding its manufacturing plants, R&D, warehouse facilities and IT infrastructure worldwide. For 2005, the company expects to invest approximately $60 million for upgrading equipment and quality systems in manufacturing, expanding raw material storage and product development facilities. Management currently expects that the Melrose Park facility will be partially operational by early September and fully operational by late September, pending successful completion of process simulation runs (media fills). As a result of this delay, APP expects to incur incremental, unabsorbed third quarter expenses of approximately $10 million. The delay in resumption of manufacturing at the Melrose Park plant is expected to affect the sale of a limited number of key generic products. The third quarter 2005 sales impact on generic products is expected to be approximately $15 million. Sales of the proprietary product ABRAXANE(TM), which also is produced at the Melrose Park facility, are not anticipated to be impacted by the delay. APP currently has sufficient finished goods inventory of ABRAXANE available to meet both the currently projected demand in the marketplace and American BioScience's clinical trial requirements through the end of the 2006 first quarter. $120 Million Company-Wide Facility Upgrade and Expansion Initiative Since its initial public offering in 2001, APP undertook a strategic initiative to continuously upgrade and expand all of its manufacturing, product development and quality control systems as part of its commitment to providing injectable products at the highest standards of quality. By mid-2005, APP completed a second manufacturing facility for ABRAXANE in Grand Island, NY and validation of this facility currently is underway. The company anticipates shipping product for the U.S. market from this new ABRAXANE manufacturing suite, which has been designed to comply with both U.S. and European standards, during the second half of 2006. Overall, APP estimates that the expansion of the plants and installation of new equipment company-wide will increase its U.S. liquid manufacturing capacity by approximately 25% and more than double its U.S. lyophilization manufacturing capacity. About American Pharmaceutical Partners American Pharmaceutical Partners, Inc. is a specialty drug company that develops, manufactures and markets injectable pharmaceutical products, focusing on the oncology, anti-infective and critical care markets. Abraxis Oncology, the proprietary division of APP, is devoted entirely to developing and promoting innovative, next-generation cancer therapies such as ABRAXANE(TM), recently launched for the treatment of metastatic breast cancer. For more information, visit APP's website at www.appdrugs.com and www.abraxisoncology.com. Because these forward-looking statements, whether expressed or implied, involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the uncertainties regarding the costs and time involved in bringing our Illinois manufacturing facility to a fully operational status, the adverse impact of production delays on the sales and marketing our products, the costs associated with the ongoing launch of ABRAXANE(TM), the market adoption and demand of ABRAXANE, marketing approvals and launches of other products, the impact of pharmaceutical industry regulation, the impact of competitive products and pricing, the availability and pricing of ingredients used in the manufacture of pharmaceutical products, the ability to successfully manufacture products in a time-sensitive and cost effective manner, the acceptance and demand of new pharmaceutical products, the impact of patents and other proprietary rights held by competitors and other third parties. Additional relevant information concerning risks can be found in our Form 10-K for the year ended December 31, 2004 and other documents filed by us with the Securities and Exchange Commission. Contacts: American Pharmaceutical Partners, Inc. Nicole Williams Executive Vice President & CFO (847) 969-2700 Rob Whetstone/Robert Jaffe PondelWilkinson Inc. (310) 279-5963
SOURCE American Pharmaceutical Partners, Inc.