From presentations by eye surgeons and doctors I talked to at the ASCRS, the ICL and LASIK, I believe, will become complementary for severe vision correction. There is only so much that can be cut from the cornea. But, by using both techniques, people who wake up in the morning and literally cannot see the fingers on their hand can be very close to 20/20 or better. These are people who only have the choice of wearing coke bottle glasses or getting an ICL. This category of people will be highly motivated to get an ICL or ICL/LASIK procedure. From the studies being presented the potential of cataracts or glaucoma have been overcome by learning the proper surgical techniques. As only a five minute procedure there will be some doctors will specialize in ICLs as well as LASIK.
From an investment perspective STAAR does not have to replace laser to be a very interesting investment here. STAAR has long been the most innovative company in the cataract IOL business. STAAR introduced the injectable, foldable IOL which everyone else licensed from them.
Yet the entire company could be bought for $100 million. Compare that to someone like KERA which is valued at about $200 million while losing $25 million per year and having to continually raise money by selling more shares. STAAR's ICL already outsells the KERA entire revenues 4 -1, STAAR is funding all their development internally, and is still profitable. I mentioned this to one doctor who had just bought KERA based on Phase III approval and he was astounded that STAAR, considered to be one of the quality companies in the field, could be worth only half of KERA who had only a very small booth at the show compared to STAAR which had a booth as big and well attended as anyone at the ASCRS.
And STAAR not only has the ICL but also the AquaFlow glaucoma wick which promises to replace existing treatments. This is expected to finish Phase III in June. STAAR expects this to be a $200 million product for them.
In addition, STAAR has several new products which will help them take market share in the IOL market. They just introduced the only IOL on the market to correct astigmatism which is about 20% of the market. They are also expected to introduce a new collagen based material this year for their IOLs. STAAR has been hurt by Alcon's acrylic IOLS over the last several years.
Actually, what may end up happening is someone is likely to buy out STAAR. Potential candidates I see are VISX, BOL, Pharmacia, or Johnson & Johnson. My own opinion is STAAR is worth at least $20 to $25 today. If they are able to introduce their new products and show solid success with them, STAAR is potentially worth up to $50 two years out. And again, STAAR does not have replace laser to accomplish this. |
