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Biotech / Medical : BEAM, BOL, KERA, LASE, LCAV, LVCI, LZRC, VISX, SNRS, STAA -- Ignore unavailable to you. Want to Upgrade?

To: neelu who wrote (143)	6/26/1999 4:58:00 PM
From: Glenn Petersen	Respond to of 253

VISX.com? Art Samberg, co-founder, chairman and CEO of Pequott Capital Management as quoted in the June 28, 1999 issue of Barron's: Q. Tell us another story. A. VISX is better known and much more controversial. It's a razor and razor-blade story. VISX makes excimer lasers for surgery on eyes to correct such refractive vision disorders as nearsightedness and astigmatism. The equipment costs about $500,000 and the procedure now cost about $2,000 per eyeball. Based on their patent, VISX gets a "use fee" of $250 per eyeball. The real money is in the fees. About 316,000 procedures were performed last year using VISX equipment. That number will be way up in 1999, to perhaps 500,000, and is expected to keep growing rapidly for years. VISX claims 75% of the U.S. market for this procedure, which limits thermal damage and doesn't penetrate the eye. This is an ultimate Internet play and an online-trading play. As use of the 'Net in general and online trading in particular continues to grow, people can damage their vision. They'll want corrective surgery, and VISX gets paid per eyeball. Q. How are earnings? A. On revenues of $133 million in 1998, VISX earned 60 cents a share fully taxed and fully diluted. Our estimates for this year and 2000 are $255 and $1.30, followed by $337 and $1.70. Q. What is controversial here? A. There are some patent disputes, but a charge brought by the Federal Trade Commission was recently dismissed. As the cost of the procedure drops, will VISX's fee be lowered? I doubt it will happen in a major way. On a positive note, their target market is people aged 25-55 who earn at least $35,000 per year. There are a ton of people in that category, and they seem happy to pay for this procedure out-of-pocket. It's not covered by health plans.