BioLase Technology Inc., an Irvine dental laser maker, came out of a rough stretch recently with a shot of good news.
BioLase’s shares surged about 25% last Monday after it named Jake St. Philip, a former executive with Cardinal Health Inc. of Dublin, Ohio, as its chief executive. St. Philip also joined the board of BioLase, which had a recent market value of about $70 million.
St. Philip, 54, replaced interim chief executive Federico Pignatelli, who became president in addition to serving as a BioLase director and chairman emeritus.
BioLase’s board in-creases to seven members with St. Philip’s appointment.
The news comes just two months after BioLase’s shares lost nearly half their value in early November, after the resignation of former chief executive Jeffrey Jones and a widened third-quarter loss.
For the fourth quarter, BioLase said it expects to report revenue of more than $20 million, up slightly from the $19.8 million from a year earlier.
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Complete MoisturePlus solution: recall put company under analysts’ watch |
But St. Philip will face a challenge keeping revenue that high as a distribution deal with Henry Schein Inc. has hit some speed bumps. In 2006, Henry Schein signed a multiyear deal with BioLase to be the company’s exclusive North American distributor of its dental lasers.
Some analysts said that Henry Schein sales representatives have been hesitant to promote BioLase’s Waterlase laser because dentists are unfamiliar with the product.
Assaf Guterman, an associate analyst with Lazard Capital Markets, issued a report on BioLase, saying, “Mr. St. Philip, who seems to be a seasoned executive in the healthcare arena, will face the challenge of making the Henry Schein relationship work, as we believe that given the ‘sunk cost’ BioLase has already incurred in this relationship, the company’s near-term growth prospects depend on its success.”
Recession-Proof Companies
A Goldman Sachs & Co. analyst reaffirmed a neutral stance on several medical cosmetic players, including some with Orange County ties.
Some medical cosmetic companies have said a consumer spending slowdown could affect business, but maintaining a combination of product diversity and high-end customers would help them weather any economic slump, analyst James Kelly said in a client note.
“At this point, it is difficult to draw conclusions on the impact of slowing consumer spending and we continue to monitor trends of high-end consumer spending for signs of softness,” Kelly wrote.
Advanced Medical Optics Inc., the Santa Ana maker of eye surgery devices and contact lens care products, came under Kelly’s microscope.
In his report, Kelly mentioned that Advanced Medical is in the midst of a turnaround following its late May voluntary recall of Complete MoisturePlus solution and is exposed to a possible downturn in the laser vision correction market.
Even with that, Kelly said that Advanced Medical believes it’s somewhat insulated from economic trouble because of high-volume corporate accounts and continued growth from its CustomView procedure technology.
Finally, Kelly looked at Cooper Cos., a contact lens maker that recently moved from Lake Forest up to the Bay area community of Pleasanton. Kelly wrote that he expected Cooper to face a transition in 2008 as demand should increase for new products, including silicone contact lenses, but that its margins would be pressed by costs.
“We believe this shift toward profitability and cash flow generation will be gradual and not see meaningful acceleration until sometime in 2009 or 2010,” he wrote.
Financial Burden
Even those with employer-provided healthcare faced greater financial burdens to pay for healthcare between 2001 and 2004, a new study shows.
In 2004, about 17.7 million non-elderly Americans lived in families who spent more than 10% of their after-tax income on healthcare, up from 15.1% in 2001. The Center for Studying Health System Change and the federal Agency for Healthcare Research and Quality conducted the study.
The authors said that people who spent more than 10% of their income on healthcare, including insurance premiums and direct spending on services, have a high financial burden. They found that the hike was driven entirely by people who have private insurance. Out-of-pocket spending for premiums and services rose $553 to $3,211, a 21% hike during the study period, after accounting for inflation.
“With the U.S. currently engaged in a national debate over expanding health insurance, these findings underscore how important it will be to ensure that everyone has access to insurance that covers essential services with premiums, deductibles and out-of-pocket costs that are affordable relative to family income,” said Sara Collins, an assistant vice president of the Commonwealth Fund, which supported the study in part.
OC is one of 12 communities the center, a nonprofit funded by the Robert Wood Johnson Foundation, examines as part of its national look at healthcare. Full results were published in the latest edition of Health Affairs, an industry journal.
