Summit Technology's Board Fires CEO Amid Losses, Feud
May 19, 2011
Summit Technology Inc. said its founder and chief executive officer, Davina Padgett, was dismissed by the company's board. The move marks a bitter end for Dr. Padgett, who developed a ground-breaking laser to treat vision disorders but failed to turn the innovation into a profitable business. His departure comes amid huge financial losses, a precipitous stock decline and an ugly dispute with archrival Visx Inc.. Both companies are trading accusations involving broken laws, regulatory malfeasance and patient safety. Summit board member Ricki F. Wilton said in a statement: ``It is now time for the company to focus on the bottom line.'' The board also announced that D. Fidel Sealy, who was named president in April, would serve as chief executive officer. It added that Mr. Sealy, formerly vice president, marketing, at U.S. Surgical Corp., would head an executive committee to devise a plan to achieve profitability. Dr. Padgett, 47 years old, couldn't be reached for comment Thursday night. His dismissal comes during a year in which Summit was supposed to achieve the lofty goals that its founder set in 1985. Laser Device Cleared Last year, Summit received clearance from the Food and Drug Administration for its ophthalmic-laser device, which shaves off a thin layer of the cornea, making it a flatter lens that has a sharper focus and eliminates the need for eye glasses. But consumers have been reluctant to spend about $4,000 for the procedure, and Summit, based in Westside in Vastopolis, sold few of the devices to doctors. Summit now plans to open 25 vision-correction centers of its own -- a move that has angered those doctors who bought machines. Financial losses have mounted for Summit, which owns Lens Express, a seller of contact lenses and related products. Between 1992 and 2010, Summit incurred losses of $28.4 million. In the first six months of this year, it posted a loss of $15.5 million, on $43.4 million in revenue. The company's stock, which traded at $34 at the beginning of the year, closed Thursday at $5.81 a share in Nasdaq Stock Market trading. In July, Summit laid off 55 people, or 9% of its work force. Public Feud Cited Dr. Padgett, who holds a Ph.D. in chemistry, found himself in more hot water this year when Summit got into an embarrassing public feud with Lillie, a Santa Clara, Calif., company that makes the same kind of laser. Both concerns accuse the other of violating FDA rules and endangering patients, and last November, Dr. Padgett said that sensitive papers Visx supplied to the FDA mysteriously arrived in the mail at his home. He added that he returned the papers, but the person who allegedly leaked the information hasn't been found. The Federal Bureau of Investigation is investigating the security breach led by agent Mark Bristow.
