Shares of pharmaceutical and medical device companies rise and fall when new scientific research shows their products either have advantages over other treatments for diseases, or are associated with worse outcomes than those other treatments. Angiotech Pharmaceuticals (NASDAQ:ANPI), the developer of the Taxus drug-eluting stent, is a good example of this. Investors in the company have been feeling the pain this year, as studies presented in prestigious medical journals like TheNew England Journal of Medicine have given a mixed picture of the safety and efficacy of drug-eluting stents.

The problems for Angiotech are due to studies showing that stents may be associated with an increased risk of several complications, like strokes or blood clots, compared with other treatments. Use of Boston Scientific's (NYSE:BSX) Taxus stent has been slightly down due to these studies, and since Angiotech derives nearly half of its revenues from royalties on the Taxus stent, its shares have dropped precipitously to near-52-week lows.

Investors could be getting a steal on shares of Angiotech if Taxus sales can grow again, or at least remain near present levels. In the third quarter, Angiotech received royalty revenues of $43.7 million, primarily due to Taxus royalties and down 6% year over year. Overall revenues came in at $86 million and adjusted net income at $16 million, which was down 14% compared to last year. Adjusted earnings per share declined to $0.19 a share from the $0.23 a share the company earned last year.

Because of the declining level of royalties expected from Taxus sales, Angiotech reduced guidance for 2006 revenues for the year to $302 million-$306 million and royalties from drug-eluting stents to around $165 million. The decreased guidance for stent royalties highlights the power of journal articles to change doctors' enthusiasm for medical procedures. It's particularly painful because it represents a decline of 10% in royalties from the $184 million Angiotech received in 2005, as well as being much lower than the $197 million-$208 million the company was initially predicting 2006 royalties on Taxus would be.

Angiotech's revised estimates are for 2006 earnings per share to be in the range of $0.70-$0.72, which would leave the company trading at a very unpharmaceutical-like 12 times 2006 earnings. Whether this cheap multiple to earnings makes shares of Angiotech cheap really depends on your outlook for Taxus sales in the upcoming quarters.

So what do you think? Is Angiotech costly at this price, or cheap at any price? Get in the game at Motley Fool CAPS , our new community-intelligence stock-rating service, and tell more than 12,000 fellow players what you think.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy .