In another illustration of the fading fortunes of aaiPharma ( AAII), a onetime Wall Street fan has dropped his coverage of the company.

Adam Greene of First Albany Capital, told clients Tuesday he was no longer tracking the Wilmington, N.C. drug company "given the inability to make any reliable forecasts." He said that aaiPharma's announcement Monday that it was investigating "unusual sales" of two products last year "raises questions about the company's future direction."

The company yesterday also withdrew its revenue and sales guidance for the first quarter and for all of 2004, adding that it might have to re-state financial results for 2003, depending on the outcome of an investigation by outside directors and an independent law firm.

The announcement crushed aaiPharma's stock, which fell 36% to $9.77 on Monday, well below its recent 52-week high of $31.85. Shares gained 10 cents, or 1%, to $9.87.

Analysts drop coverage of companies all the time for many reasons, but Greene's decision is notable because he had been one of aaiPharma's biggest backers. He started following aaiPharma last May with a strong buy rating. He cut the rating to buy in December. Four weeks ago, he dropped his rating to neutral after aaiPharma set up a $15.9 million reserve against revenue for 2003's fourth quarter to reflect a significant number of product returns. (He doesn't own shares, but his firm is a market maker in aaiPharma's stock.)

Greene's action follows a decision by Standard & Poor's Corp. late Monday to revise its opinion on aaiPharma to negative from stable. The rating agency changed its outlook after the markets had closed.

S&P also reaffirmed below-investment grade ratings on corporate credit (B-plus), senior secured debt (BB-minus) and subordinated debt (B-minus), which it said reflected "limited growth potential" as well as its "aggressive use" of debt to finance product acquisitions. (The lowest investment grade rating is BBB-minus).

S&P said its concerns are "somewhat mitigated" by the company's efforts to reduce debt following each acquisition. In fact, aaiPharma took steps to reduce debt on Monday by selling its intravenous and injectable vitamin businesses for $100 million plus future royalties based on sales. Still, many analysts are troubled by the debt level compared to aaiPharma's peers.

Also on Monday, Moody's Investors Service said it would place ratings for several aaiPharma debt issues under review for a possible downgrade; and analysts at CIBC World Markets and Banc of America Securities lowered their ratings on the company's stock.