Eye Laser Industry - VISX and Summit BEAM Info Message Board

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Biotech / Medical : Eye Laser Industry - VISX and Summit BEAM Info

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To: AgAuUSA who wrote (51)	9/8/1996 12:58:00 AM
From: John Binford, Jr.	of 178

If Visx drops to $5 then Summit will be at $0. Here are the facts that seem to be distorted by all of the recent posts. Summit layed off 50+ people in Waltham, MA including their VP of engineering because they are not selling machines (period). The Visx machine is considered superior and is vastly outselling the Summit laser. The Visx machine (STAR) can do astigmatic corrections now using key cards allow this type of procedure to be performed. The Summit machine (APEX) can not do astigmatic corrections without a hardware upgrade (and I have heard skeptical reports as to whether it can be done successfully even with the upgrade and erodable mask). The new VISX/PPP lawsuit against Summit is because Summit owes a royalty of 6% on every machine sold in the U.S. to Visx (Summit uses Visx's patented technology and the payment of royalties are handled through PPP) Summit ill/semi-legally pre-sold excimer lasers before FDA approval and is trying to avoid paying this royalty as well as a dispute about price to take the 6% on. Visx has every right to expect payment on the license that allows Summit to use its technology to make a viable excimer laser. Visx should have a very strong case and I believe Summit will probably settle. Supposedly the amount owed is around a $3 - $5 million. As for the PPP split, Visx receives $140 to Summit $110 on the $250 per procedure fee. The split is 56% to Visx, 44% to Summit. Visx is making money right now and has no cash flow problem. In fact Visx had higher revenues than Summit last quarter and that should be a strong indicator of how well Visx is doing compared to Summit. This is especially amazing considering much of Summit's revenue includes fees from procedures at their centers (low profit margins) and that the Lens Express business adds $7.5 million per quarter in revenue. Visx's revenue came mostly from machine sales. Visx also reports their PPP fee when they receive it back from PPP (2 to 3 months late) and then it only adds ($140 - PPP operations fee). Summit reports theirs upfront as an immediate $250 in rev and the amount kept by PPP as a cost ($140 + PPP operations fee). Visx has 1/2 the number of outstanding shares as Summit does. Visx has 15.3 million outstanding with option plans allowing it to increase to 16 million. Summit has 30+ million shares outstanding. Visx is not being sued by shareholders. Visx is not the subject of FBI investigations and congressional hearings. If you read the testimony of Mark Sterns, M.D. who worked on the Visx PMA for the FDA, he had great reservations about the approval of Summit with only 89 patients having one year follow-up for the approved PRK method. Also, he felt that Visx was somehow being slowed down by the FDA and that they required Visx to re-submit their application 5 times just to continue to slow it down. It seems Emma Knight who was assigned both Visx and Summit PMAs early on treated the two differently. Rumors have it that she had a significant friend inside Summit and attend party/ies thrown by Summit. Her name is also at the top of the copy of the fax that Muller recieved in his package including the secret design documents on Visx's laser. The fax was the secret document for the approvable letter and the requirements Visx needed to satisfy in order to obtain final approval. This approvable letter is not releasable to anyone except officials working on it in the FDA and Visx. Summit also had doctors right to the FDA to try to delay Visx's approval by questioning the data. In fact, the most vocal opponent was Marian Mascai from West Virginia who irrationally twisted and distorted the statistical data trying to influence the rest of the panel to deny Visx's application at the Oct '95 panel meeting. It turns out that her organization had a special deal allowing her use of a Summit laser, which caused her to have more than just a small conflict of interest in trying to de-rail Visx's approval. Anyway, I could go on and on. But Summit has been a dirty company and even though I think Muller is the main reason for this, it is hard to believe that he hasn't taught his dirty tricks to the rest of the gang. The company has been big into deceit and manipulation and now they are finally paying the price. They have no earnings and for the forseeable future will continue to sustain losses. Summit's main assets are their PPP royalties and their centers. The lens express thing was a strange move. As for their centers, they will eventually need to buy Visx's lasers in order to compete with other doctors who can perform astigmatic corrections using the Visx laser. It has been said that internationally 3 out of 4 patients getting PRK are also getting astigmatic correction. These are the people in which soft contacts do not work very well. The bottom line of all of this is that Summit maybe an ok buy here at $6, but I would still rather buy Visx. Visx is making money and makes a better product. Visx reaps the majority of the PPP fees and Visx is not being sued by everyone.

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