Biolase Investment - Laser Dentistry Forum

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April 28, 2003 at 11:37 pm #3221 Reply

Anonymous
Guest

I was wondering how many board members have been contacted recently regarding their investing in Biolase? This is becoming a frequent occurance for me. Today I received a letter from someone at Oppenheimer who suggested that since I was an owner of a Biolase product I should consider investing in the company.

Last week ,I know Glenn and I were both contacted by another source regarding Biolase. Below is the correspondence that went on between this research analyst and myself. He was going to post himself (joined the board) but hasn’t yet done so. He also gave me permission to post the following:

Original Message

From: “Eldar Brodski”
To:
Sent: Monday, April 21, 2003 4:12 PM
Subject: Comparison of Waterlase to all other comparable lasers: is it
markedly superior, slightly superior, basically the same, or inferior on a
price/performance basis?

> Dear Dr. Schalter,
>
> I came across your name on dental town and laserdentistry forum. I am
> comparing the Biolase Waterlase with the OpusDent OpusDuo, Softlase by Zap
> Laser, the Millenium laser, and the relevant lasers offered by Continuum
> Biomedical, one of which is called DELite, as part of an investment
analysis
> of Biolase, Inc. for my firm, Abacus Capital.
>
> I do not have expertise in this area and different dentists say they
prefer
> different lasers. Is one of these, or perhaps one I have not mentioned,
> superior to the rest? If so, is it markedly superior, the same, or
inferior
> when you consider how much it costs?
>
> Many dentists have said that the Waterlase is superior because unlike the
> OpusDuo and the Continuum lasers, including DELite, it does not heat the
> tooth. The latter do and hence carry a higher risk of injury to the tooth.
> Also, and perhaps related, though I am unsure, is the higher incidence of
> pain with the non-Waterlase lasers. Dentists claim that the heat emitted
by
> these non-Waterlase lasers causes the pain and the incidence of pain is
50%
> higher than with the Waterlase. Also, because of the heat, the
non-Waterlase
> lasers are constrained in the power levels at which they can be used–too
> much power will cause too much heat; such constraint on power is much less
> or non-existent with Waterlase.
>
> One of the other reasons dentists chose the Waterlase was that it had the
> ability to work on both hard and soft tissue, with only a small % of soft
> tissue procedures being outside the ability/scope of the Waterlase. This
> argument seems wrong in that OpusDuo comes with two lasers, one for hard
and
> for soft. Am I missing something?
>
> I am curious to hear your thoughts, especially because you own the
Waterlase
> and know others, like Dr. van As (to whom I’ve also written), who own
> competing lasers. In case you are interested in learning about us, I have
> attached a profile of my firm. Thanks.
>
> Eldar Brodski
> Research Analyst
> Abacus Capital

(My response in blue)
Eldar Brodski,

You have already discovered one of the most important issues, regarding
dental lasers, which is trying to determine what is truth and what is hype.

It would be unfair of me to claim that I could tell you one laser is better
than another when I have not personally used all the lasers you mention.
What I can tell you is that your focus first needs to be on the wavelength
of the laser, rather than the make.Otherwise you are comparing apples with
oranges.

I believe that some of the information you are getting regarding lasers
heating up teeth, other than the Waterlase, is inaccurate. The Waterlase is
an er,cr:YSGG laser .Dr. vanAs’s Continum product (DELight) is also an
erbium laser. Both are absorbed by water and cause vaporization of tissue.
Any of the erbiums that use water for cooling will not heat up the tooth.
The literature actually shows a drop of a few degrees during laser use.
Erbium use w/o water would be a whole different story.

As far as which laser is best for soft tissue , it again comes back to
wavelength of the laser and the target tissue. Can the Waterlase be used on
soft tissue-yes.Is it the best for soft tissue-probably not. The best soft
tissue lasers target pigment rather than water. These would be diodes or
nd:YAG’s.

Probably the most useful information for you would be found in a book
,Dental Applications of Advanced Lasers ( http://www.jgma-inc.com/
) . It will help with the differences between types of lasers according to
target tissue and absorption. Once you have an understanding of that you
will be better able to compare products. Part of the problem with the info
you are getting from dentist is that ,unfortunately, there are many who have
not taken the time to investigate these things themselves and thus rely on
the companies info. For those giving you info regarding pain-ask to see any
scientific studies. They are just giving you anecdotal info or the company
line.

My opinion of the Waterlase is-
1. great service from company
2. poor training
3. great promotion by company
4. more problems w/ maintenance than Continuim
5.wouldn’t want to practice w/o it

With your permission, I’d be willing to post your email and let others
respond if you’d like?
Hope I helped a little,
R.W. Schalter DDS

The followup is below:

Dr. Schalter,

You helped a lot. Your response is thoughtful. I would appreciate you
posting my email. Thanks.

Also, some more questions:
1. It seems that one ought to be able to come to a conclusion about which is
the best laser on a price performance basis. Am I wrong? I mean: given two
lasers, A and B, A costs X and B costs X/2 (which seems to be roughly the
case with Waterlase versus Continuum, maybe I am off), and yet B’s
functionality and quality of functionality is 90% of A’s, then B is probably
the better choice (unless the 10% is crucial). Am I thinking about it the
wrong way? Can one determine which laser is best? If yes, then how?
2. Why is the training poor?
3. Why are there more problems with maintenance than with Continuum?
4. By #5, do you mean “Wouldn’t want to practice without it”? If so, why
wouldn’t you? In other words, why wouldn’t another laser be able to
adequately substitute the Waterlase?
5. Why wouldn’t you want to practice without it given that the training is
poor and maintenance problems are greater than with Continuum? In other
words, your #5 (if I read it correctly) implies that Waterlase has strengths
that more than compensate for its weaknesses relative to the competition,
i.e. though it has weaknesses relative to the competition, it is still
better overall. Is this an unfair interpretation?

Please feel free to post any of my responses.

Eldar Brodski

(My response again in blue)
My response in bold italics- Remember these are opinions and also anecdotal.

Dr. Schalter,

You helped a lot. Your response is thoughtful. I would appreciate you
posting my email. Thanks.

Also, some more questions:
1. It seems that one ought to be able to come to a conclusion about which is
the best laser on a price performance basis. Am I wrong? I mean: given two
lasers, A and B, A costs X and B costs X/2 (which seems to be roughly the
case with Waterlase versus Continuum, maybe I am off), and yet B’s
functionality and quality of functionality is 90% of A’s, then B is probably
the better choice (unless the 10% is crucial). Am I thinking about it the
wrong way? Can one determine which laser is best? If yes, then how?
To determine the best laser you have to determine the purpose for which you want to use the laser. Some wavelengths are better for soft tissue, some better for hard tissue.Since there are also differences in operator skill, knowledge, and experience , the only way to determine this would be to take the operator factor out of the equation and then standardize the test by procedure.
2. Why is the training poor?Training usually starts with an office visit from a tech who will teach a cookbook approach to using the laser. The purchase price does include a credit toward training in a doc’s office but it often occurs later. The emphasis should be 1st-understanding the physics behind the laser and then how to. 3. Why are there more problems with maintenance than with Continuum?Check the posts on the forum regarding trunk fibers- again anecdotal but there seems to be a difference 4. By #5, do you mean “Wouldn’t want to practice without it”? If so, why
wouldn’t you?
In other words, why wouldn’t another laser be able to
adequately substitute the Waterlase?Didn’t say it wouldn’t. My intent was that I wouldn’t want to practice w/o a laser.
5. Why wouldn’t you want to practice without it given that the training is
poor and maintenance problems are greater than with Continuum?I’ve pursued certification and extra training and knowledge on my own and am now comfortable with it.Biolase service has been outstanding in taking care of problems. In other words, your #5 (if I read it correctly) implies that Waterlase has strengths
that more than compensate for its weaknesses relative to the competition,
i.e. though it has weaknesses relative to the competition, it is still
better overall.
Is this an unfair interpretation?Yes.

Again, not having used the other lasers it is hard for me to offer opinions other than on that which I have used.

I think you might find it interesting if you posted your questions to the forum as a whole. I ‘d be happy to then post my reponses to get things rolling. Good luck with your research.

What is the deal with the Biolase push? Is this common with what others are seeing?Is it that Biolase just hit a high enough stock price to get more attention? What do you think?

April 29, 2003 at 2:13 am #9390 Reply

Glenn van As
Spectator

Hi Ron…….here is my take from talking to people in several companies.

It is not uncommon for companies to push hard to drive the stock up and then the principals (CEO, VP and many in the marketing area) bail out and a company buys them.

Several ways to drive the stock up and that is sales and marketing and getting users to buy the stock to create excitement.

I think that Biolase stock has risen in recent times to 11 dollars or so from 6-8 dollars at around Xmas.

Keith told me the stock was really doing well……….is the push on now…….

Who knows but I wont post my reply back to Eldar because some things were honest and heartfelt.

I was concerned regarding what some university dentist had told him was that the Waterlase was the only laser not to cook the pulp. The competitors apparently cooked the pulp……..god was I mad.

Opusdent doesnt do that, Hoya doesnt do that.

Where is the evidence based dentistry on this.

He didnt tell me who the person was but that they were affiliated with a university and owned a Biolase.

I do hope that the financial guys get the real goods and not some feel good story………

Thanks for posting Ron……..interesting thread.

Oh RAY…….OH BOB , where are you??

Glenn

April 29, 2003 at 2:40 am #9394 Reply

Robert Gregg
Participant

Oh Man!

What a topic!

It’s 1991 all over again (remember I’ve been saying it’s 1990 all over again). We’re moving closer to the next Armagedon of laser dentistry.

In 1991, when ADL went public with an IPO and for the next couple of years, Tom Chess, Kim Kutsch, Del, I and others received regular calls from analysts like this.

They started paying attention because of the IPO “road show” and PR and trade advertising that ADL was putting on that was just enormous. When ADL went public, the underwriter hype went along with it, driving the share price up. We got more calls. We invested. Tom and Kim bought low and sold high–made good money. I broke even!

We gave our best and honest answers–like Ron has done. Thoughtful, fair and measured. The responses were always appreciated. But we all missed the point.

1. Impulse buying of ADL dLase 300 in 1990 and 1991 led to some dissatisfied customers with buyer’s remorse.

2. Claims were made that couldn’t be replicated by anyone but the Guru’s.

3. Company provided training was non-existant. It was left to dentist trainers to train in their offices, similar to today (so the ALD was formalized)

4. Standardization of claims and procedures was lacking–even FDA clearance in many cases (so the curiculum Guidelines were established)

5. None of this assuaged the disgruntled, untrained laser dentists with &#3650,000 laser that they didn’t know how to use–or couldn’t use or integrate into the practice effectively.:angry:

6. Most lasers became plant stands.

7. Some dentists were a little bit more angry.:angry: They filed a class action lawsuit alleging over-stated claims by the salespeople and paid “Clinical Instructors” (sales seminar dentists), fraud and a few other things.

The stock of the high rising ADL plumeted. Went from &#3613 to &#363 in just a few months–never recovered.

Today ADL/ADT (ADLI) trades at 28 cents a share– a far cry from their IPO of &#3613.00.

Hype without substance. Claims without science. Procedures without protocols. That’s the unfortunate legacy of ADL/ADT. (And ADL had a reliable, durable, stable laser device and deliver system still in use by many of us today.)

And we stopped getting calls from analysts…..

………and now they’re baaaaaack!

Hold on to your check books ladies and gentlemen. Beware: stock prices rise before they fall.:o

Bob

April 29, 2003 at 5:35 am #9381 Reply

ASI
Spectator

Hi All,

Interesting read.

History does repeat itself.

A person who doesn’t know history is bound to repeat it.

Andrew

April 29, 2003 at 5:37 am #9375 Reply

lagunabb
Spectator

The Abacus venture that I am familiar with is run out of Hong Kong. I don’t know much about Abacus here in the US. My guess is that it’s a small hedge fund that could either go short or long, or perhaps already have either a short or long position. If the fund has no position, it’s a strange start to doing research as I would assume someone on staff or by contract has some rudimentary understanding of laser physics. If the fund has a long position, the questions are starting at the wrong spot with questionable timing. If the fund is short, they are stuck with a losing position and are grabbing at straws to extricate themselves from a bad position using whatever means available. (there has been a sharp increas in short-interest since Feb and I am guessing the average breakeven price for the shorts is at least 20% lower than where the stock is trading now) Take your pick but I would not take the questions too seriously until more information is provided. Having said that, I do believe a shoot-out would be useful for current-generation systems. The only thing that’s come close to a shoot-out was a report by Stewart Rosenberg that compared cutting of extracted teeth at a convention.

PS. Being a money manager or an analyst can be a lonely route, sometimes very lonely. The lonely route is the often the right route.

May 1, 2003 at 3:44 pm #9370 Reply

Anonymous
Guest

And today (5/1/03), another one……

Dr. Schalter,

I recently sent a letter to your attention introducing myself and the idea
of an investment in Biolase. I would like to discuss this with you further
at your convenience. I will be brief. We have visited the company and done
other extensive analysis that you might find interesting as well.

All the best,

Joshua Gimpelson
Financial Consultant
Oppenheimer and Co
888-336-9787
joshua.gimpelson@us.cibc.com

P.S. We have a research report available on Biolase. If you are interested
in receiving this report, please reply via email or phone at the above
number.

Information in this message reflects current market conditions and is subject to change without notice. It is
believed to be reliable, but is not guaranteed for accuracy or completeness. Details provided do not supersede your
normal trade confirmations or statements. Any product is subject to prior sale. Oppenheimer & Co. a Division of
Fahnestock & Co. Inc., its affiliated companies, and their officers or employees, may have a position in or make a
market in any security described above, and may act as an investment banker or advisor to such. Any securities
products recommended, purchased, or sold in any client accounts will be subject to risks, including possible loss
of principal invested.

Love this part of the disclaimer-

QUOTE

It is believed to be reliable, but is not guaranteed for accuracy or completeness.

May 1, 2003 at 5:50 pm #9379 Reply

lagunabb
Spectator

The best report I have seen on Biolase was the original report written by Alex Arrow now at Lazard. We compared notes on Biolase and Lumenis a while back when he first started looking Biolase. I will take credit for warning him off of Lumenis. Let me know if you are interested in his report. On the whole I find most of the sell side reports to be a little light on risks assessments. Alex’s report was well balanced.

May 3, 2003 at 11:03 am #9368 Reply

Anonymous
Guest

#Moderation Mode

Moved here

July 6, 2003 at 1:39 am #9401 Reply

Swpmn
Spectator

Letter I received last week:

Al

July 14, 2003 at 2:04 am #9372 Reply

dkimmel
Spectator

Allen, I got the very same letter from their office in Pensascola.
David

July 14, 2003 at 6:34 am #9397 Reply

Robert Gregg DDS
Spectator

Tell them you’d be happy to advise them….and that your hourly fees are very reasonable.

Bob

August 25, 2003 at 6:15 pm #9384 Reply

Albodmd
Spectator

I was just contacted by an analyst from Smith-Barney in New York. So how much is a good hourly rate to charge for my consulting? 😉 Big concern seems to be the growth rate of lasers in dentistry. I don’t seem them being incorporated on a widescale quickly unless the price drops a lot. In which case, I’ll be unhappy cuz I paid so much :-(. But I can always say I was the first to have it in town!
Regards,
Al B

August 26, 2003 at 2:13 am #9400 Reply

Swpmn
Spectator

Well which one did they contact you about the DELight or the Waterlase or was it just erbiums in general???

If you believe all the crap being posted on Dental Town “comparing erbium lasers” you and me are gonna be out of luck!!!! The sky is falling, the sky is falling.

Al

August 26, 2003 at 4:27 am #9385 Reply

Albodmd
Spectator

They were actually asking about the Waterlase and why I picked the Delight. They wanted to know how fast I thought the market for hard tissue lasers would grow. Like I said before, not to fast unless there’s a big price drop. I don’t know how fast waterlase is telling them they think it’s going to grow. Can’t wait to see those references from Stu about how much faster the Waterlase is than the Delight. 🙂

August 26, 2003 at 8:13 pm #9402 Reply

crowboy
Spectator

Biolase was issued a patent today
<a href="http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=/netahtml/search-adv.htm&r=1&p=1&f=G&l=50&d=ptxt&S1=biolase&OS=biolase&RS=biolase

Comments?

(Edited” target=”_blank”>http://patft.uspto.gov/netacgi….(Edited by crowboy at 4:16 pm on Aug. 26, 2003)
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