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Ophthalmology-Related Stocks Suffered in 2001
But There Were Some Exceptions.

Once the darlings of Wall Street, laser vision correction companies were among the worst stock market performers in 2001. From the companies that operate vision correction centers to the laser manufacturers, the entire industry fell out of investor favor last year.

The stocks of such former high flyers as VISX, TLC Laser Eye Centers, LCA-Vision and LaserSight ended the year trading at a small fraction of their previous highs. More diversified companies, including such eyecare industry leaders as Bausch & Lomb, also saw their stocks suffer from the slump in laser vision correction procedures.

But there were a few bright spots in ophthalmology-related stocks in 2001. Contact lens manufacturer Ocular Sciences and SOLA International, which makes eyeglass lenses, both ended the year near their highs. These companies each benefited from capable management, innovative products, consistent earnings growth and realistic market valuations. The superior performance of Ocular Sciences and SOLA International demonstrated that in 2001, at least, investors were more interested in value than in glamour.

Among the larger ophthalmology-related stocks, Johnson & Johnson was a star performer, making a new high of 60 following a two-for-one stock split. Allergan, Novartis and Pharmacia all finished the year well below their 52-week highs, though the eyecare segments of these companies' businesses continued to deliver impressive numbers. Bausch & Lomb failed to meet earnings expectations throughout 2001, and the continued underperformance culminated in a shakeup in top management. As the year ended, the company's new CEO, Ronald Zarrella, was taking strong action to bring the company's cost structure under control.

With the boom in laser vision correction stocks over, investors entered the new year with no compelling reason to purchase ophthalmology-related stocks. However, with tens of millions of baby boomers soon to reach retirement age, securities analysts believe that the demographics are favorable for ophthalmology-related companies that can come up with innovative treatments for such age-related eye conditions as cataracts, glaucoma and AMD.

IN THE NEWS

Allergan spinoff. Allergan will spin off its optical medical device business --comprised of its eyecare surgical lines and contact lens care products -- as an independent, publicly traded company called Advanced Medical Optics Inc. After the spinoff, Allergan will be focused solely on specialty pharmaceuticals.

Glaucoma drug. Novartis Ophthalmics will partner with Kissei Pharmaceutical Co. Ltd. to develop a highly selective alpha 1-A receptor antagonist for the treatment of glaucoma. The companies say preliminary studies indicate that the drug, administered as an eye drop, can lower intraocular pressure by facilitating the outflow of fluid from the eye.

Vitrase progress. ISTA Pharmaceuticals said an initial Phase IIa study of its drug Vitrase for diabetic retinopathy demonstrated "encouraging" results in slowing the progress of the disease. Of 46 patients whose fundus photgraphs were analyzed, 67% of those treated with Vitrase showed no measurable progression of the disease during a 1-year evaluation period, while only 38% of patients treated with saline solution showed no progression.

Failed trials. Inspire Pharmaceutical's widely anticipated INS365 Ophthalmic drug for dry eye proved no more effective than a placebo in its first Phase III clinical trial. A treatment for wet AMD co-developed by Miravant Medical Technologies and Pharmacia also failed to meet efficacy goals in Phase III.

New CEO. Paul J. Hastings has been named chief executive officer of QLT Inc., the co-developer of Visudyne photodynamic therapy for treating wet AMD. Hastings, who was formerly CEO of Axys Pharmaceuticals, replaces Julia Levy, Ph.D., who will remain on the company's board.

Visual Training Helps U.S. Olympians Excel
Ophthalmologist's Program Improves Athletes' Performance.

If the United States' bobsled, ski, snowboard and luge teams are draped in medals during this month's Winter Olympic Games, an Illinois ophthalmologist will deserve some of the credit.

Barry L. Seiller, M.D., a practicing ophthalmologist and director of the Visual Fitness Institute in Vernon Hills, Ill., became involved in offering individualized visual training for elite athletes more than a decade ago after helping victims of traumatic brain injuries regain their visual skills.

"I saw an overlap in that some of the techniques we used in visual rehab could also be used to enhance athletes' visual abilities," says Dr. Seiller.

Dr. Seiller's training devices range from high-tech computer displays to a simple string-and-beads device used to improve eye coordination and alignment. The exercises are designed to evaluate and improve an individual's array of visual skills, including visual acuity, peripheral vision, depth perception, contrast sensitivity, visual recognition, speed of focusing, visual tracking and eye/hand/body coordination.

"Visual skills, like all physical skills, can be taught, trained, practiced and enhanced," says Dr. Seiller. "This isn't just about having 20/20 or better eyesight, which is essential to be a top performer. It's about providing athletes with visual confidence. For example, if you're piloting a bobsled or luge, you have a split second to see a landmark on the course and initiate a turn. Visual training can help you make that move correctly and save a few hundredths of a second."

Dr. Seiller worked closely with the U.S. Luge Team prior to the 1998 Winter Olympic Games and the result was the first Olympic medals for the United States in luge.

"We're confident that visual fitness training played a role in our success in winning silver and bronze medals," says bronze medalist Mark Grimmette.

The Visual Fitness Institute (www.visualfitness.com) now has a client list that includes the U.S. Bobsled, Ski, Snowboard and Luge Teams, the Cleveland Indians and Milwaukee Brewers baseball organizations, the Chicago Blackhawks professional ice hockey team and the Georgia Tech collegiate sports program.

"Visual fitness will be the next major area incorporated into all athletic training," predicts Dr. Seiller. 

REFRACTIVE SURGERY UPDATE

AAO on LASIK. After reviewing existing LASIK technology and statistics on patient outcomes. the Ophthalmic Technology Assessment Committee of the American Academy of Ophthalmology has endorsed LASIK as safe and effective in treating low-to-moderate myopia and astigmatism. The Committee found the procedure less predictable for moderate-to-high myopia and astigmatism, but expressed optimism that improved technology should decrease the small percentage of surgical complications that occur with LASIK.

Phakic IOL partnership. Allergan has signed a contract with Netherlands-based Ophtec to introduce and market worldwide a new phakic IOL based on Ophtec's Artisan lens technology. Approved in Europe, the Artisan lens is currently in Phase III trials in the United States for the correction of myopia, hyperopia and astigmatism.

Toric ICL. The FDA has given STAAR Surgical Company conditional approval to begin U.S. clinical trials for the company's toric implantable contact lens (TICL). The company will soon begin a 125-patient study with individuals having myopia in the range of -3.0 to -20.0 diopters and astigmatism in the range of 1.0 to 4.0 diopters. STAAR says the TICL is the only phakic intraocular lens that's able to both reduce pre-existing astigmatism and provide patients with visual correction for myopia.

European approval. Allergan's Array multifocal intraocular lens has received the European Commission mark for treating presbyopia following lensectomy. Designed to be inserted into the capsular bag through an unenlarged incision, Allergan says the Array provides a range of vision from near to far. In a study of patients age 56 and older, 75% achieved uncorrected visual acuity of 20/25 or better at distance and 80% achieved J3 or better at near.