Visx Inc., the leading maker of laser eye surgery gear, won federal approval Friday to sell a new technology that many believe will reignite growth in the eye-correction market.
The Food and Drug Administration authorized the "wavefront-guided" system developed by Santa Clara, Calif.-based Visx for correcting nearsightedness and an eye malady called astigmatism. Visx is conducting human trials of its effectiveness on farsightedness.
"We are very pleased" by the FDA's decision, Visx Chief Executive Elizabeth Davila said in a statement.
Swiss competitor Alcon Inc. already is selling its version of wavefront-guided technology, having received FDA approval several months ago to treat nearsightedness. Visx, though, has nearly 60% of the U.S. laser eye surgery market.
Friday's announcement came after financial markets closed. Visx's stock gained 47 cents to $17.06 a share on the New York Stock Exchange. The stock has more than doubled in price since early March amid expectations that the FDA would give its OK.
Proponents of the new technology say it provides vastly better results than established laser surgeries, the most popular of which is dubbed Lasik, short for laser-assisted in-situ keratomileusis. The new technology, in effect, maps the individual makeup of a person's eyes and enables surgeons to do "customized" treatments.
The wavefront-guided system provides not only "sharper vision but also improved night vision" compared with existing technology, said Dr. Robert Maloney, a Los Angeles surgeon and Visx consultant who worked on the FDA trials.
Visx and others hope the improvement will get the laser- correction industry growing again. Demand soared in the 1990s but then peaked in 2000 -- at 1.42 million U.S. procedures -- and has dropped each year since, according to the research firm Market Scope.
Because the surgery typically is elective and not covered by insurance, many blame the poor economy for damping demand. Lingering consumer fears about the surgery's safety also are a factor, and some ascribe the slowdown to people waiting for the wavefront technology to arrive.
The decline also has eroded the earnings of Visx and others in the industry. Visx's stock, though up sharply this year, is down significantly from more than $100 a share since the industry's zenith in 1999.
But the new technology's effect "will be minimal at first," said Market Scope President David Harmon. Over time it "will lead to better word of mouth and more referrals and increased volume, but in the short run we won't see a huge increase."
The number of U.S. laser procedures will rise this year but only by 1% to 2%, to about 1.2 million, he estimated.
Visx noted, however, that it already has sold the wavefront equipment to many of its existing laser surgeons, and they simply have been awaiting FDA approval. The equipment, costing about $65,000, is about the size of a personal computer and provides the precise eye measurements the surgeon needs to perform the operation.
The procedure also will cost more. Currently, Visx charges surgeons $100 for each procedure they do with a Visx machine, a sum doctors pass on to patients. Davila previously had said that fee would go up "substantially" after Visx won FDA approval of its new system.
The average fee for laser surgery is about $1,600 an eye, and that's likely to rise to about $2,000 with the new technology, Harmon said.