Dueling Fools
VISX Lessons
September 15, 1999
The Bull Rebuttal
By
Rick, you could use a little corneal zap in order to see VISX's future more accurately.
The heart of your bear argument focuses on the competition. Remember that with over 70% of the market, VISX has a major lead on any competitor trying to break in.
Summit Technology? Last quarter, they placed 22 new lasers worldwide; VISX nearly tripled that total, placing 61.
Keravision? This technology, where they implant something along the lines of a permanent contact lens (Intacs) into your eye, is FDA-approved for only very low myopics, a teensy-weensy percentage of the market. Intacs have been available in Europe since 1996 and have yet to attract meaningful revenue.
Nidek? It's rumored to be an excellent laser, but it's entangled in major patent litigation with VISX, with no end in sight and no legal entry into the U.S. market.
Sunrise Technologies? Sunrise's Holmium Laser was a possible competitor for hyperopia (farsightedness). Unfortunately for them, the FDA review panel voted 11-0 against approval for the machine. This leaves VISX with the only FDA-approved laser for hyperopia.
Bausch & Lomb has no FDA approval and will have its hands full competing with VISX's mammoth installed base. In addition, eye doctors have no incentive to switch to the Bausch & Lomb product if they've already invested heavily in VISX equipment.
You mention Summit's offering of free corrective surgeries to NFL referees. While I haven't heard a peep from the refs, I've heard joyful noises from San Francisco 49ers' wide receiver Terrell Owens and offensive lineman Dave Fiore, who are now carrying the ball enthusiastically for VISX ever since their recent surgeries.
Thus sprach Owens: "I can see the ball so much clearer when it is thrown to me, and on long passes I can actually see the ball released from the quarterback's hand." He also says that Fiore claims it's one of the best decisions he's ever made. Now that's what I call eye-opening publicity.
Finally, Market Scope, the leading independent source of information in the refractive surgical market, recently released its annual survey of refractive surgeons. When asked what they expect to be using two years from now, the responses came in as follows: VISX 60.9%, Keravision Intacs 49.1%, Sunrise Holmium 32.5%, Nidek 19.2%, and Summit 13.7%. It's clear who doctors choose.
Rick, I respect your intelligent arguments, but you're simply not seeing the light. There's no evidence that a price war is on the way. Better polish your specs if you're going to speculate.
I think I'm gonna sit back with my 20/20 vision (thanks, VISX!) and watch the crystal-clear profits accruing in my account.
Next: The Bear Responds