Biolase Stock Soars on OK of Medical Laser

By BARBARA MARSH

July 25, 1997 12 AM PT

TIMES STAFF WRITER

SAN CLEMENTE —

Biolase Technology Inc. stock surged 48% Thursday after the company said it had received federal clearance to market a laser system for a range of uses in dermatology and general surgery. Sales from the new product could put the San Clemente medical device company in the black next year for the first time, Chief Executive Donald A. LaPoint said.

Biolase also expects to increase its 26-employee work force by about 50% by the end of the year to accommodate anticipated growth from sales of its DermaLase laser system and other products.

“People are beginning to recognize that Biolase is becoming a significant player,” LaPoint said in commenting on the stock’s performance. Biolase shares rose $1.44 to $4.44 in heavy trading on the Nasdaq market.

The device--fitted with an air-water spray to cool tissue and prevent damage as the laser does the cutting--can be used for a variety of procedures, including removal of moles, skin biopsies and surgery on internal organs.

Biolase is the second Orange County company to benefit recently from stock surges on news that a laser product has been approved by the Food and Drug Administration. On May 7, Irvine-based Premier Laser Systems Inc. became a stock market star when the FDA approved one of its lasers for treating tooth decay.

In three days of high-volume trading, Premier’s stock more than doubled to $14 a share. Shares of Biolase, which is developing a dental laser that would compete with Premier’s, also went along for the ride that week, jumping 78% to close at $5.13 a share in the same three days of trading.

Premier stock closed Thursday at $10.88 a share.

The FDA’s approval of the DermaLase system will allow Biolase, which has been involved mainly in the dental market, to expand into the dermatology and general surgery markets.

John Lacy, an analyst at Hagerty Steward, a Newport Beach investment and brokerage firm, said the product’s approval is one reason he’s decided to start covering the stock, which has little following on Wall Street.

The DermaLase system includes an item the size of a fat pen that the physician operates. It’s connected to an instrument cabinet that’s slightly smaller than a two-drawer file.

The product will be priced from $45,000 to $65,000--a range LaPoint describes as “competitive.” At least one industry analyst considers the price a bit high, however.

LaPoint sees this as a possible breakthrough year for a company with a difficult, largely unproductive history. Last year, for example, Biolase posted a loss of $2.5 million, or 21 cents a share, on $691,829 in sales.

Biolase traces its origins to a company founded 13 years ago in France to develop dental and laser products. The French company, Societe Endo Technic S.A., started a U.S. subsidiary in 1986. Biolase, a descendant of the subsidiary, survived the parent, which was dissolved in 1994 because it couldn’t pay debts.

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Product Approval

Biolase Technology hopes sales of its recently approved medical laser will boost earnings into the black. Details on the company:

Headquarters: San Clemente

President/CEO: Donald A. LaPoint

Business: Develops and manufactures medical devices

Current products: DermaLase, a laser used for dermatological and general surgical procedures and Laser 35, used to perform dental soft-tissue procedures

Founded: 1987

Exchange: Nasdaq SmallCap

Employees: 26

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Sales Net loss (thousands) (thousands) 1992 $5,536 $5,471 1993 2,416 7,549 1994 1,136 3,050 1995 1,152 2,024 1996 692 2,463

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Stockholder Celebration

Biolase’s stock price, which had settled after a run-up in early May, closed higher again Thursday upon news the company had received approval for a new laser system with a range of medical uses. Weekly closing stock prices and Thursday’s close:

April

25: $3.09

May

2: 2.75

9: 5.13

16: 4.25

23: 4.25

30: 4.19

June

6: 3.81

13: 3.88

20: 3.94