STOCK WATCH
KeraVision: Ringing in 1999?
By Liz Segr�

At presstime, Silicon Valley-based KeraVision was awaiting important news: whether its initial product, the KeraVision Ring, would be recommended by the FDA's Ophthalmic Devices Advisory Panel for approval for correction of myopia. The stock price mirrored the company's excitement, closing at 12-15/16 January 10, far above the $3-$6 range the stock traded at early last fall.

The Ring's purpose is to flatten the cornea to correct nearsightedness, just as excimer and LASIK procedures do. However, it is a unique device in refractive surg-ery. The surgeon cuts a channel between stromal tissue layers, then inserts two polymer Ring segments with an appropriate thickness. The thicker the Ring, the flatter the cornea will be.

The Ring is supposed to be a permanent addition to the eye, but it can be surgically removed if necessary. It may have more appeal, therefore, for people who are wary of long-term effects of refractive surgery. KeraVision emphasizes that the Ring doesn't remove tissue from the central optical zone, as excimer laser procedures do.

The Ring now being considered by the FDA was designed for low to moderate myopia, which limits its use somewhat. But the company says that about 22 million people in the United States fall within this range.

Clinical results have been outstanding, with 53 percent of nearsighted patients achieving 20/16 vision, 74 percent with 20/20 or better vision, and 97 percent with 20/40 or better. Patients were monitored for at least a year after the surgery.

In late December, KeraVision announced it was acquiring a drug development company, Transcend Therapeutics, which had an anticipated $8 million cash balance. The intention was to close the company and use the cash for market development for the Ring. Transcend stockholders would receive KeraVision shares plus a premium. Even if the deal fell through, KeraVision would receive a breakup fee of $500,000. Not bad.

KeraVision showed a $16.8 million net loss for the first nine months of 1998, so the company is eager to start marketing the Ring in the United States.as soon as possible. The loss hasn't fazed recent investors, who are also keeping an eye on KeraVision's plans for devices that correct hyperopia and astigmatism. EB

KeraVision (Nasdaq: KERA)