Since 1986, Visx had been guiding several procedures to treat corneal pathologies and refractive eye disorders through the multistage FDA approval process. The costs associated with submitting clinical trial information to the FDA were taking a toll. Problems increased dramatically in September 1994, when Visx’s stock price fell 26% with the news that FDA approval was delayed because of compliance irregularities found at some clinical testing sites. And that same year, its revenues dropped by 19%. Getting FDA approval was extremely important to Visx, as it would have its foot in the door and be able to sell its excimer laser system in the United States. The persistent sentiment among the management team was that even though Visx had a technologically superior laser system, which consistently received top ranking from the world’s leading ophthalmologists; Visx’s competition was going to win the race to gain FDA approval by virtue of being relentlessly aggressive and street smart.
Darden Business Publishing – University of Virginia