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Biotech / Medical : VISX
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To: Robert G. Harrell who wrote (1474)1/13/2000 1:02:00 PM
From: MGV  Read Replies (2) of 1754
 
The stock is down today on a Blair (investment bank) report that procedure growth will be 10% (Goldman Sachs thinks 11-12%, some others as high as 20%).

The recovery time for this stock has not changed. There are several possible catalysts. Earnings is NOT one of them. One is official release of the PTO reexamination of the '388 patent. Two is a license agreement with Lasersight and Bausch & Lomb. B&L likely has no interest in reaching agreement at least until it obtains FDA approval to market its Technolas laser in the U.S.

One significant data point that has been lost on the market was the announcement of the deal with the Canadian center, Lasik Vision. In my view, the deal to buy 100 laser systems and to continue to pay $250 procedure royalties speaks volumes regarding VISX's competitive advantages if not its patent portfolio strength. Lasik Vision previously used B&L laser systems in Canada. Moreover, the deal flies in the face of Murphy's main contention: that an erosion in the market price of the procedure leads to an imminent erosion in the royalty amount. Here is Lasik Vision, a corporate center trumpeting the lowest prices in the industry buying 100 lasers and agreeing to pay the going royalty rate!

The wait may not be as long as you anticipate. Unfortunately both expected catalysts are time dependent on government agencies (FDA and PTO). Therefore, the length of the waiting time is not easily forecasted.
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