Biotech firms to merge in $4b deal

American Pharmaceutical Partners Inc., a maker of generic injectable medicines, agreed to buy its largest shareholder, American BioScience Inc., in an all-stock transaction valued at $4.09 billion. The shares posted their biggest drop in more than three years.

The companies will merge in the first half of 2006 to create Abraxis BioScience. American BioScience already owns 64.4 percent of American Pharmaceutical Partners, the companies said in a joint statement yesterday.

The combination allows the new company to have the worldwide rights for Abraxane, a chemotherapy treatment, which may eventually generate more than $1 billion in sales, chief executive Patrick Soon-Shiong said. The treatment won US approval in January for use in women whose breast cancer has spread and who weren't helped by other chemotherapy combinations.

''To strategically develop this globally, the best thing to do is combine these two," Soon-Shiong said. The company has asked Canadian regulators to approve Abraxane and will seek approval in Europe and Mexico in 2006.

Shares of American Pharmaceutical fell $8.36, or 18 percent, to $39.25 on the Nasdaq Stock Market.

American Pharmaceutical will issue about 86 million additional shares to American BioScience stockholders, the company said. The deal is valued at $4.09 billion based on Friday's closing price for American Pharmaceutical shares.