Six months after a clinical study first questioned the effectiveness of its AngioJet blood clot-clearing system, Possis Medical (NASDAQ:POSS) remains a company in shock. Its sales and profits growth have both stalled and begun to reverse course. Its sales force spends more time on public-relations damage control and less time selling its products. In short, the future of the company has been called into doubt.

When this Stock Advisor selection first came to our attention in September 2003, Fool co-founder Tom Gardner laid out a compelling case for buying into this "financially conservative, well-run organization" with projected long-term earnings growth of 27% per annum. And for nearly a year, the company did indeed reward Stock Advisor subscribers richly, roughly doubling from its recommendation price before crashing down to what now has become nearly a 40% capital loss.

Today, it's no longer accurate to call Possis "financially conservative." As revealed in last week's earnings release, Possis has been buying back its shares at prices far in excess of where the stock trades today. The company revealed last Monday that, $22 million into its share buyback program, it has now bought back more than 1.4 million shares at an average price of $15.47 per share. The stock now trades south of $10 a stub.

As for being "well-run," the business is currently running backwards. In the immediate aftermath of the "AiMI" effectiveness study that crashed Possis' business, company management seriously underestimated the effects that the study would have. Soon after it was published, Possis guided its investors to expect fiscal 2005 revenues of $75 million-$80 million, and per share profits of $0.57-$0.62. Half a year later, Possis has now lowered that forecast to $65 million in revenues and just $0.30-$0.36 in per-share profits for the year. If accurate, that will equate to as much as a 50% decline in profits year-on-year.

And that's to be expected. Possis sales reps can't pitch their product effectively if they have to spend all their time arguing that the AiMI study was bunk. But that just raises another question: Why, six months after the study was conducted, has Possis been unable to debunk the study if it was truly flawed? To this Fool's mind, there are only two possible answers. Either Possis is failing to zealously defend its premier product and major profit-driver, or the AiMI study was accurate and the AngioJet isn't as good as we previously thought. Neither possibility speaks to renewed success for Possis as a business. And neither answer holds much promise of better days for Possis shareholders.

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Fool contributor Rich Smith has no position, short or long, in Possis Medical.