VISX--Goldman comments today
<<7-Dec-99 Goldman Sachs (KEUSCH)
Until there is resolution on several patent infringement suits, including an appeal at the ITC and the Northern District of California, VISX's patents remain valid and enforceable. As a result, we see little change to the competitive position for VISX. The company will still collect a $250 per procedure fee for surgeries performed on its market leading installed base. In addition, a strong technology base, superior service, and sophisticated physician support should help VISX maintain market share. With our 2000 estimate of $1.75 not assuming any revenues from license agreements and modest growth in the market to 1.3 million procedures, we have no reason to change our forecast based on the ITC decision as business is status quo.
In our opinion, a key to the near-term performance of VISX shares will be whether Bausch & Lomb, and to a lesser extent LaserSight, sign agreements to license the company's core intellectual property. With the core Trokel patent still valid and enforceable, we believe that there is a very good chance that both companies will license the technology from VISX. If a licensing agreement is not struck, we suspect that VISX will be aggressive in protecting its patents.
Separately, Bausch & Lomb shares are likely to benefit from yesterday's news. While we believe that B&L will likely still need to license the core VISX patents, the ITC ruling could give management some added fire power in its negotiations with VISX. We expect B&L shares to be strong today.>>
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