Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Charlie Smith who wrote (1649)	2/23/2000 11:35:00 AM
From: MGV	Respond to of 1754

This is definitely a scorched earth tactic. VISX knew it would absorb a big hurt with this approach versus an incremental or tiered approach to price cuts. It believes the hurt will be bigger on competitors. I think it is a reasonable belief. VISX is guiding to 1.55 Million total procedures in the market this year. Apparently it is guiding to $1.35-1.40 in earnings in 2001. (Remember that the share repurchase can add as much as 15% to the bottom line.) The information I hear is that this decision was independent of any new information regarding the PTO reissue or the ITC review. To a certain extent, both decisions are much less significant now. At $100, the intellectual property value is less important. Service and range of applications is more important. I also hear street speculation that B&L, absent a take out of BEAM will license VISX for the $100 and charge $125. Visibility is low here but so is the price. I think the low visibility is more than discounted in the price. I think it may go lower over the near term (because of the very low street estimates and the type of sentiment we saw on this thread last night) and will buy when it does. I expect a 12-18 month double on these purchases. The bottom line for me is I am a believer in the continued growth in the LVC procedure If I am right about that, the move by VISX was the right move and it will benefit. Lets see if I'm right. Charlie, if you are B&L, I think you buy VISX before you buy anyone else.

To: Charlie Smith who wrote (1649)	2/23/2000 12:00:00 PM
From: MGV	Read Replies (1) \| Respond to of 1754

This language from the Goldman Sachs note fairly parallels my view: " Goldman, Sachs & Co. Investment Research VISX, Incorporated * * Aggressive Strategic Plan for Long-Term Growth * * .... We view this bold strategy as a positive, but difficult earnings comparisons could be tough on the stock in the near-term. EXPECTING A NEW WAVE IN THE LASER VISION CORRECTION MARKET. We continue to believe that the laser vision correction market is in its infancy. To date, the 1.6 million procedures performed have been primarily driven by patients who have myopia greater than 5 diopters with an early-adopter mentality. Moreover, most of the procedures performed thus far have been on patients who were not content with spectacles. With an expected reduction in laser surgery prices, we believe that price sensitive customers will enter the market. In addition, patients with less than 5 diopters of astigmatism - which account for 70%-80% of the nearsighted - who are currently comfortable with either spectacles or contact lenses may come into the market. This latter patient population is clearly the long- term opportunity for VISX. With some 20 million people representing potential candidates for laser surgery, the long-term dynamics of the market appear to be extremely positive."