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Biotech / Medical : Summit Technology (BEAM) -- Ignore unavailable to you. Want to Upgrade?

To: Angler who wrote (1338)	8/19/1999 11:53:00 AM
From: Tassi	Read Replies (2) \| Respond to of 1386

GOLDMAN SACHS: BUYING OPPORTUNITY Lawrence Keusch (Boston) 1 617 204 2051 - Investment Research Note 8:14 am August 19, 1999 "We maintain our trading buy on VISX shares with a $110 price target. VISX stock came under pressure yesterday as concerns surfaced over the potential for a reduction in the $250 fee per use as a result of pricing wars at laser vision correction service providers. Given the strength of the VISX intellectual property position, we see little risk of any significant reduction in the $250 fee in the foreseeable future. With the company likely to generate incremental revenues from licensees and strong growth of the market, we would use the current weakness as a buying opportunity. We are maintaining our 1999 and 2000 earnings estimates of $1.35 and $1.75, respectively. VISX shares declined 6.7% yesterday as concerns arose from a price battle among laser vision providers. It is our understanding that two laser vision service providers entered into a price battle with one center offering LASIK surgery for $1,500 down from $2,250. Following this report, investors became worried that with price declines in laser vision correction procedures, providers could pressure VISX management to lower its $250 per procedure fee. In speaking to VISX management, we see little risk to a reduction in the $250 per procedure fee in the foreseeable future. Over the next several months, we believe that there will be several catalysts for appreciation in VISX shares. As we have indicated, the third quarter appears to be progressing in a fashion that will enable the company to meet or exceed our estimates. In addition, the FDA marketing clearance of the Bausch & Lomb Technolas 217 laser and the subsequent licensing of the VISX patents are a positive. Assuming that Bausch & Lomb takes share from the marginal laser competitors, we estimate that every 1% share gain by B&L results in $0.02-$0.03 in incremental earnings to VISX. If B&L can gain 10% share of a 1.5 million procedure market in 2000, royalties to VISX could increase our published estimate of $1.75 by $0.20-$0.30. Consequently, we continue to see opportunities for upside surprises to the current earnings estimates." -------------------------------------------------------------------------------- Posted