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Biotech / Medical : SNRS- Sunrise Technologies -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (2779)	7/22/1999 7:51:00 PM
From: Glenn Petersen	Respond to of 4140

From the Yahoo thread: Gaithersburg, Maryland, July 22 (Bloomberg) -- Sunrise Technologies International Inc., a money-losing maker of eye surgery equipment, failed to win the recommendation of an expert government panel for a laser to treat mild farsightedness.The advisory panel voted unanimously to recommend that theU.S. Food and Drug Administration reject the laser, citing concerns about cases in which the laser's effects faded with time. ''A percentage of the refractive effect is temporary,'' said Michael Grimmett, a member of the panel and a professor of ophthalmology at the University of Miami. The FDA usually follows the advice of its expert panels, though it is not required to do so. John G. Kinnard & Co. analyst Richard Leza said a rejection of the technology could have serious consequences for the company. If they don't get FDA approval, he said, ''they're dead.'' If the FDA overrules the panel, Sunrise plans to market the laser system to doctors, capitalizing on the growing number of people over 40 who face the deterioration of their close vision. Other systems to correct vision use a laser to cut the eye but Sunrise uses a Holmium laser to heat certain areas on the eye, shrinking tissue to change its shape. Shares in Fremont, California-based Sunrise were halted today. Yesterday, the company's shares fell 2 to 15. Leza said he expects the company's share to drop by about $10 tomorrow when the stock is unhalted. FDA Concern The company said the laser was safer than the most popular type of laser surgery -- excimer lasers made by Visx Inc. and Summit Technology Inc. In addition, they said the laser was a quick, effective way to treat mild farsightedness. The FDA reviewers, however, raised concerns that the effect of the treatment fades over time, a concern that every panelist said prompted their vote against recommending the laser. Optimism about the laser's prospects helped lift Sunrise shares 125 percent since the beginning of the year. Shares were halted in advance of the meeting, held to give the FDA guidance on whether to approve the laser. The Fremont, California-based company's rapid rise has attracted short-sellers, investors who bet that the company's share price will fall, as well as others who say the company is overvalued at its current share price of $15, even if the laser is approved. ''I don't think this company can make enough money to justify this valuation,'' even if it's approved, said Leza, who had a ''neutral'' rating and a $3.50 price target for the stock prior to the meeting. Investigator Disclosure The company has a market capitalization of about $660 million, based on its closing price yesterday, close to the approximately $785 million market capitalization of Summit, a company with $92 million in 1998 sales and the second-best selling laser system in the U.S. Most of the investigators who conducted studies for the company hold substantial stakes in Sunrise, the company disclosed in a filing with the Securities and Exchange Commission. FDA disclosure rules that took effect earlier this year require companies seeking agency approval of new drugs or medical devices to disclose company shares held by clinical investigators. Sunrise filed its application before those rules took effect and only disclosed the investments in its SEC filing. Ralph Rosenthal, the director of the FDA's division of ophthalmic devices, said today that the agency had received several complaints about possible bias by Sunrise investigators with a stake in the company, though he noted that the issue wasn't to be discussed by the panel.