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

To: John Binford, Jr. who wrote (548)	5/7/1998 11:07:00 AM
From: Andrew Abrams	Respond to of 1754

In a perfect world maybe, but you are missing the crux of what the FTC is saying in the commentary. If PPP is broken up, which it is going to be, either by the FTC or the partners themselves, the fixed fee business (royalties) will change. Yes, they will be able to license to others and get incremental royalties that way, but if you think that they won't undermine each other on pricing you've never been in a competitive business. Secondly, the FTC allegations imply a much more serious problem for VISX, ie patent fraud, which, if proven, would cause VISX to have to license the basic patents from others (Summit). Besides the fine that the FTC will levy (remember triple damages), if either ruling is found against the defendants, the shareholder suits will have to be settled also. I cant imagine why people will pay up with this hanging over the stocks. I would also imagine that the actual FTC investigation will take at least 6 months. If you like this space, buy the laser centers, they will be the beneficiary of any price competition. AA