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Summit will profit thru the same mechanism Visx will, mainly PPP. So, if PRK's really pick up then Summit and Visx will both receive a lot of PPP revenue. Remember Summit has over 30 million shares and Visx has 15.3 million shares.
I listened to a recording of the conference call Visx held on Monday and came away feeling very positive. Visx will announce a deal at the AAO meeting in Chicago starting Sunday in which Visx will offer current Summit owners a tradein in exchange for a Visx STAR laser. This is not because sales of Visx lasers are slowing, it is to appease the Summit owners who have called Visx and asked if they could exchange their laser for a Visx STAR laser.
I still would only own Visx right now as Summit has over 11 class action lawsuits against it right now and is losing money in their centers. Also, with Visx obtaining approval for astigmatism during the coming year (early 97), then Summit centers will have a difficult time completing with centers/doctors having the Visx STAR. Logan stated that patients are far more happy if their astigmatism (even if it is mild) is fully corrected. Summit, does not appear to be much of a manufacturing threat at all any more. Also, if PPP is thrown out by the FTC (which I don't think it will), then the patents go back to the respective companies and Summit and Visx will cross license, and more than likely Visx will receive an even larger share of the royalties since when PPP was drawn up, the split was closer to 50/50 because Visx was unsure if they needed Summit's errodable mask technology to perform astigmatic corrections, since then it has been determined that the errodable mask doesn't work very well and that Visx discovered a way to use the laser by itself without requiring other expendables.
If PPP were negotiated now, Visx's split would be even higher.
During the conference call, Logan stated that procedures for 1996 were meeting the 70,000 to 75,000 annual pace, and that for 1997 Visx estimated that 200,000 to 250,000 procedures will be performed. Also indicated that rate of procedures is increasing, but will not give specific numbers. Visx stated they will break out PPP revenue in their 10K report which comes out after their 4th quarter (this quarter).
Also, Visx is meeting with several institutions the week of Nov. 11 which in my opinion should drum up interest in the stock and move it upward.
Also, the short interest in Visx as of Oct 15 was 1.5 million shares up from 1.4 million in September 15. |
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