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Biotech / Medical : VISX -- Ignore unavailable to you. Want to Upgrade?

To: Charlie Smith who wrote (1449)	12/17/1999 11:55:00 PM
From: MGV	Read Replies (4) \| Respond to of 1754

Charlie and others - The FTC is dropping its appeal because the PTO (Patent and Trade Office has concluded its review of the '388 w/ no material change in the breadth and strength of the patent. This conclusion is in the brief that the FTC filed to withdraw its appeal. Certainly, this is very bullish news for VISX. Although it will not impact the ITC decision (The PTO review at the time of the ITC trial precluded VISX from wielding it before the ITC against Nidek), it does serve effectively to render the ITC case moot insofar as the ITC decision was being interpreted to signify that the VLNC intellectual property was toothless. VISX may not have obtained the injunction in summary process before the ITC but, it now holds a reconfirmed potent weapon to obtain infringement remedies (treble damages I memory serves). The '388 is a "big gun" method patent that VISX can and will use to enforce claims against infringement by Nidek and any practitioners using Nidek technology w/o a license. It will likely be employed immediately in the N. Dist. Calif. case. The market did not interpret the significance of the news today. It was an opportunity with new information to exploit in my opinion. I hope some of you did. The next catalyst will be the license with B and L. I reckon the agreement will be somewhere at or north of $200 per procedure. My guess is $225. When that happens, the sentiment will be as the ITC case never happened. That is, the multiple will return to 2X forward earnings and earnings estimates will go up. Eventually, VISX, like QCOM will become a pure IP play. (Recall what happened to QCOM immediately after it announced it would be shedding its handset division). There will come a time when VISX will no longer manufacture laser systems and all of its revenue will be procedural key card fees and license revenue. There is significant additional multiple expansion to be derived then. My understanding is B and L neither was nor now is deriving any significance from the ITC case but, rather was waiting to hear the disposition of the PTO review of the '388.