Hello Mr. Russell: VISX
I looked into VISX for a little while. I did not find a clear description of their business. They claim both equipment, including sales and service, and licensing. Their March 25, 1999 10K acknowledges competitors. They seem involved in extensive litigation, mostly involved with trying to force people to pay them or outside parties claiming VISX patents are invalid. They do give some patent numbers. I did not look them up or review them.
I considered this--who would buy the firm? Without having seen anything of specific value in the 10K, I would hazard no one. I looked at BOL (Bausch and Lomb)--they are $4billions on paper, but have a durable business as a going concern. Some medical companies have sold to much larger companies for 10-25times sales(which I view as madness), but none over $100M in sales to my recollection. That focuses then on what are their earnings worth, and in light of emerging competition. Certainly not the current price. VISX strikes me as a short candidate. An assessment of their patents would be in order first.
If their '388' patent is a key one and it is found they left off an inventor, the US Patent Office should find that patent invalid. Even if an issued patent is valid in all respects, if an inventor was left off the patent, that is grounds for having the patent declared invalid. The 10K is written quite neutrally. It offers no hints as to what is what and where the value lies. Smartly written if avoiding giving a lever to competitors to assess them. VISX indicates sales of equipment may start to taper off this year. Also, their patent situation is such that if one falls, then a cascade of patent related adverse events may occur. Competitors are obtaining FDA approvals. Something doesn't add up for the runup in stock price the last year versus the events the last year and the outlook.
If someone does review the patents and would publish their opinion, that would be the first starting point for deciding what VISX ultimately might be worth. IMO at this point, it is not worth a $4billions cap.,,superficially. Maybe a tenth that and more probably less.
Best regards.
m |
