This Lensmaker's World May Be Getting Rosier

Embattled Cooper, maker of contact lenses and other ophthalmic products, is still high on institutional investors' garbage list. Its shares plummeted to half a buck in mid-February, down from 12 in 1988. So is the stock ready for the dump? A number of savvy pros think not, and they've been buying up shares, fow trading at 15/8. What gives?

"Seldom does one get an opportunity to buy into a company with promising new products at such a low valuation," argues Roger Benson, president of Number One, an investment manager in Norwalk, Conn. He thinks Cooper, in the red for the past seven years, will turn a profit in the year ending Oct. 31, 1995, when he expects it to earn 30 cents a share, vs. an estimated 50 cents loss in 1994. In 1996, he sees earnings jumping to $1. Like Benson, other bulls see the stock at 10 in two years.

These pros aren't unmindful of what drove Cooper to the poorhouse. Ex-Chairman Gary Singer was convicted in January of securities fraud, in which he used company funds. Cooper had to pay $3.1 million for its role in Singer's front-running scheme. And the company has just settled almost all the lawsuits arising from its breast-implant products. In 1993, legal costs reached $30 million.

"REAL JEWEL." But Cooper, notes Benson, is getting its act together under new management led by Allan Rubenstein, elected chairman in April, 1993, and Thomas Bender, named chief operating officer in August. Prospects, says Benson, have brightened, thanks to cost-cutting and consolidation.

The "real jewel," says Benson, is CooperVision, which makes flexible and long-wear contact lenses, including such brands as PermaLens and Hydrasoft. It accounted for 44% of 1993 revenues of $92.7 million. The Hospital Group of America unit, which operates facilities for psychiatric and chemical-dependency treatment, generated 31% of revenues. And CooperSurgical, with 25% of sales, markets diagnostic and surgical instruments.

Benson believes CooperVision Pharmaceuticals, which develops ophthalmic drugs, will have a blockbuster product: its own version of verapamil, a calcium channel blocker. Using verapamil, Cooper has developed an antiglaucoma product that reduces pressure buildup in the eye. The drug is undergoing clinical tests, and Cooper expects to file a Food & Drug Administration application next year. Rival Merck already has an antiglaucoma drug on the market, with more than $180 million in U.S. sales. If Cooper's entry sells even a quarter as much as Merck's, "earnings from it could exceed Cooper's current market value of $48 million," figures Benson.

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