Nobel Biocare Offers Weak Forecast for North American Dental Implants Market

Summary:

Today, Nobel Biocare, the world's largest maker of dental implants, posted a sharp drop in third-quarter profit, missing investors’ reduced expectations and signaling that, despite stellar long-term growth prospects, the dental implant market is not immune from the current global economic malaise.

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Straumann isn’t the only dental implant company feeling the economic slowdown. Today, Nobel Biocare, the world's largest maker of dental implants, posted a sharp drop in third-quarter profit, missing investors’ reduced expectations and signaling that, despite stellar long-term growth prospects, the dental implant market is not immune from the current global economic malaise.

Nobel Biocare, which issued a profit warning one month ago, said growth was slowing further in the current quarter. Nobel Biocare shares are off over 60% this year on the company's lowered forecast.

"The figures are a disaster, well below even the lowest analyst forecast," ZKB analyst Sibylle Bischofberger said.

Nobel Biocare itself had this to say about operations in North America:
"A substantial market slowdown was observed during the last two weeks of September. This slowdown has continued in October. The current economic uncertainty thus further increased the cautionary ordering pattern observed at the beginning of the year. Most dentists operate as sole proprietors, so their practice capital, used for funding their purchases, is closely tied to their personal wealth. Many clinicians also report lower visibility of prospective patient flow. As a consequence, most customers continue to de-stock and currently carry low inventory levels."

Interestingly, Nobel’s sales in the Asia/Pacific region remained strong, though we would expect that situation to change going forward as the US recession begins to spread worldwide. A significant contraction in Nobel’s Latin American region would appear to lend credence to the worldwide slowdown theory.

On a more positive front, Nobel Biocare is reporting good news as it relates to new product development.

Specifically, the company stated that NobelActive, the company’s new dental implant, continues to gain traction. The company says that, "Over 100,000 NobelActive implants have been sold since its introduction to the market, and more than 90,000 implants in 2008, alone... Based on this success, Nobel Biocare in early 2009 will launch the NobelActive line extensions with additional diameters and lengths as well as new innovative prosthetic components."

In addition, Nobel Biocare strengthened its position in digital dentistry with the acquisition of Medicim and the launch of a partnership with Imaging Sciences International, the global leader in cone beam 3-D imaging solutions. The alliance with ISI supposedly will lead to the pre-installation of Nobel’s planning software on all i-cat cone beam 3-D scanners.

Source:

Nobel Biocare