The Real Story: Less Is Not More

With CNBC bringing on a plethora of crisis consultants in the aftermath of the vice president's recent public relations disaster, you'd think management of publicly traded companies might have taken a few notes. But American Pharmaceutical Partners (APPX) opted to keep investors guessing on pertinent information regarding fourth-quarter results and, more importantly, expectations for 2006. Management has already come under fire for keeping tightlipped about its pending acquisition of American BioScience, announced in November.

To review, American Pharma is purchasing American BioScience in an all-stock transaction. American Pharma founder and majority owner Dr. Patrick Soon-Shiong owns more than 85% of American BioScience and could see a windfall of more than $2 billion if the deal is consummated.

Details on how the purchase price was decided were not revealed until Feb. 13 in a document filed with the Securities and Exchange Commission. But the merger was reviewed by a special committee of purportedly independent board members -- board members who were paid six-figure sums to seemingly rubber-stamp the deal. A full recap is available here.

On Friday, American Pharma released its fourth-quarter results. The company earned 38 cents per share (excluding one-time items), beating the consensus estimate of 35 cents. Revenue, however, came in a little light at $144.83 million vs. expectations of $151.5 million.

On the conference call, American Pharma symbolically sprayed buckshot in the face of already anxious investors by refusing to give guidance for 2006. The company also failed to assuage concerns of channel-stuffing prior to a year-end price increase for cancer fighter Abraxane.

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