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Biotech / Medical : VISX
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To: Vector1 who wrote (448)3/15/1998 1:16:00 AM
From: John Binford, Jr.  Read Replies (1) of 1754
 
In February, Visx filed a petition for the dissolution of PPP. This is a very big event, although if it takes a court hearing it could still be a long time. PPP has breakup clauses that would cross-license Summit and Visx so that each would basically keep the royalties from their own machines.

Since Visx is keeping the Lasik royalties already, they have applied significant pressure on Summit to negotiate some kind of settlement to allow each company to quit wasting money on lawsuits. I would bet that Visx would forgive the $4.5 million that Summit owes in machine royalties if Summit agreed to dissolve PPP and let each company go their own way.

Procedures have really been picking up in January and February and the profits from the procedure royalties should propel Visx with very strong earnings growth. And earnings move the stock. This is the first quarter that Visx will crush year over year, and that contributes to the renewed interest in the stock. I think many always liked Visx, but thought they would have time to get back onboard when the earnings started back on the growth track.

As for the trading in the stock, it appears more than ready for momentum players to jump aboard. The stock looks very likely to move higher in the near future. I think even the toughest shorts are ready to cover.
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