Trimedyne Sues Bigger, Troubled Rival Lumenis
By ANDREW SIMONS
Irvine-based surgical laser maker Trimedyne Inc. is suing Israel’s Lumenis Ltd. alleging antitrust violations, patent infringement, trade libel and other charges.
The suit is a counter move to litigation filed by Lumenis last month against Trimedyne charging patent violations. Lumenis is the largest maker of medical lasers after last year’s buy of Coherent Medical Group, a former unit of Santa Clara-based Coherent Inc.
Trimedyne’s suit accuses Lumenis of trying to drive its smaller rival out of business with patent litigation.
The Coherent buy allowed Lumenis to “monopolize the market,” Trimedyne’s suit said, and “engage in a course of wrongful conduct including, but not limited to, engaging in predatory pricing practices, filing meritless litigation against Trimedyne to drive Trimedyne out-of-business.”
The countersuit comes at a tough time for Lumenis, which saw a runup on Wall Street last year. So far this year, the company’s shares have fallen by more than half.
Lumenis recently said the Securities and Exchange Commission had requested details about its pacts with distributors dating back to 1998. Compounding Lumenis’ image trouble: Arthur Andersen was its auditor until 1999.
Trimedyne said it hopes its countersuit leads to federal probe of Lumenis.
“We hope other laser manufacturers that compete with Lumenis will join with us in a petition to the Federal Trade Commission to take action against Lumenis’ alleged unfair business practices,” said Trimedyne Chairman Marvin Loeb in a statement. “Lumenis is the goliath of the medical laser business.”
For 2001, Lumenis counted sales of $478 million, dwarfing Trimedyne’s $7.5 million in yearly sales.
“We believe virtually all of the laser manufacturers that compete with Lumenis in the U.S. operated at a loss in their most recent fiscal year, none had revenues greater than about 15% of Lumenis’ sales and the combined sales of all of Lumenis’ competitors in the U.S. are dwarfed by Lumenis’ revenues,” Trimedyne said in its suit.
Trimedyne has its own share of troubles, including ongoing losses. For the quarter ended Dec. 31, the company narrowed its net loss to $113,000, vs. $2.5 million in the year-ago quarter. Sales for the period were up 12% to $1.8 million. Trimedyne’s stock was trading at about 50 cents last week with a market value of about $6 million.
