Good news pertaining to the supply of ventilators in the U.S. has put Biolase Inc.’s plans for a corporate pivot on hold for now.
Biolase, an Irvine-based maker of laser cleaning dental equipment, said in early April it was shifting its corporate focus to ventilators, which at the time were in short supply as New York and other markets saw their first big wave of COVID-19 patients..
“We expect to pivot quickly and leverage our FDA-registered facility for the manufacturing and delivery of the MTV-1000 ventilator and have already received over $10 million in orders,” Chief Executive Todd Norbe said in an April statement.
“We expect to continue to focus our efforts to quickly ramp up production,” he said at the time.
Biolase reported revenue of $4.8 million in the first quarter of 2020.
Biolase’s headquarters near Bake Parkway run 57,000 square feet, and include about 20,000 square feet dedicated to manufacturing and warehousing.
The Food and Drug Administration in April granted an Emergency Use Authorization to Biolase to manufacture South Korea-based MEK-ICS’ “ICU-grade” portable ventilator devices.
The 20-year-old MEK-ICS is a manufacturer of ventilators and other medical devices for intensive care units.
The approval doubled the share price of the small-sized company (Nasdaq: BIOL) to 80 cents a share on the day of the announcement.
Since then, Biolase has fallen back to 42 cents a share and a $16 million market cap.
Change in Plans
The ventilator plan no longer is a primary focus for the company, recent regulatory filings indicate.
MEK-ICS, short for Medical Equipment of Korea Intensive Care System, has “experienced supply chain disruptions for certain critical parts and was delayed in shipping ventilators to the company,” Biolase said in a May 28 filing with the Securities and Exchange Commission.
Although MEK-ICS “is ready to ship ventilators at this time, the United States market for ventilator products has rapidly changed since early April, due to the effect and level of spread of COVID-19 infection throughout the nation, and went from products of undersupply to products of oversupply,” Biolase said.
“As an example, certain state governments are now canceling prepaid orders for ventilators.”
Due to changing condition, Biolase said it is not planning to purchase any ventilators from the Korean firm at this time.
“However, if there is a second wave of COVID-19, the company expects there may be a return to peak demand for this product. If that occurs, the company expects to be in position to be able to address this demand through its collaboration” with the MEK-ICS, it said.
Biolase in early April laid off approximately half its 150-person workforce before receiving a $3 million Paycheck Protection Program (PPP) loan from the federal government only a few weeks later. Executive Vice President John Beaver told the Business Journal that “the impact of significant lost business during the COVID-19 economic shutdown” was huge, and the PPP loan will “help keep as many people employed as possible.”
Biolase had lost a cumulative $78 million over the last four years.
Biolase last year reported revenue of $37.8 million, down 18% from 2018. It hasn’t report an annual profit in the past four years.
Dental Offerings
The company has touted its Waterlase product, a minimally invasive dental laser, for dentists to use without worrying about the spread of COVID-19 to patients or dental workers.
Waterlase uses 80% less water compared to traditional dental handpieces.
The American Dental Association recommends reducing aerosol production as much as possible to help prevent transmission of COVID-19. “A key component of aerosol production is water usage,” Biolase said.
