Slammed by Barrons!!
June 28, 1999
White Lightning
Just what is the secret ingredient in BriteSmile's swift market rise?
By Cheryl Strauss Einhorn
interactive.wsj.com
<snip>
But even though it's in what one might call the beauty business, there are some things about BriteSmile that those who have been amazed by its stock's rise find unattractive.
For starters, the company doesn't appear to be able to substantiate its marketing claims, won't disclose to dentists exactly what chemicals are in its whitening gel, doesn't do any real medical workup on its patients and faces stiff competition, regardless of how good its system really may be.
As for profits, there aren't any.
BriteSmile management says there might be some in its fiscal year ending March 31, 2001. "But we don't want to be held to that," says Chairman Anthony Pilaro.
Instead, losses have been widening
<snip>
How, then, can the company meet federal Occupational Safety and Health Administration rules mandating that dentists be given a form disclosing the exact ingredients in all agents they use on patients, so that they can take proper steps to help anyone who might be adversely affected by the product?
Says Dr. Salim Nathoo, the company's medical director: "We give the dentists a general, but not an exact idea" of what is in the gel the patients soak their teeth in. "We are just trying to control the flow of information and that is why we are making only limited disclosures. It is common business sense. We have a lot of competition." Warner does acknowledge that the product, for which a patent is pending, uses "hydroxy ethylidine diphoshonic acid" as a stabilizer for the hydrogen peroxide, so the peroxide doesn't decay in the gel.
Dr. Steve Russo, a senior lecturer and Ph.D. in Cornell University's chemistry department, says that this could be problematic because "the way this chemical stabilizes the peroxide is to uptake metals, and one of the metals it takes away is calcium."
He continues: "Essentially, this makes calcium soluble and since that is what tooth enamel is, it takes part of the tooth away. It would take the top layer of calcium off your teeth and, in so doing, clean your teeth that way. But enamel doesn't grow back. It would make me nervous to put this on my teeth."
<snip>
For a center to be profitable, Pilaro says, it must do about 30 procedures per day, or 4 1/2 per chair per day. How many do they do now? Says the chairman: "We don't like to get into that."
About 80,000 dental offices now offer teeth-whitening services, according to industry data. On average, each is doing 15 a year, or 1 1/4 per month. So unless its owned and affiliated centers do much, much better than average, it doesn't look as if BriteSmile will drive Dentyne, let alone its real competitors, out of business any time soon. |
