Nobel Buys Alpha Bio: What is the Motivation?

Last month, Warburg Pincus snapped up Lifecore Biomedical for $239 million, and this month Nobel Biocare announced the acquisition of Alpha Bio for $95 million. The question is: Who’s next in the new Implant Mergers & Acquisitions saga? More importantly, what is driving this acquisition spree?

Private Equity firm Warburg Pincus, seemingly bought Lifecore to merge it into Keystone Dental, another Warburg creation, thereby providing Keystone with a much needed dental implant product line, a large revenue stream, and an existing customer base.

But what was the motivation behind Nobel’s purchase of Alpha Bio, as the company apparently was not generating enough revenue to justify a $95 million valuation.

According to Haaretz: “This isn’t a tech stock with army geniuses backed by angels. Alpha Bio Implant was a one-man show: Dr. Ophir Fromovich, CEO, owner and dentist to the stars, not that he’ll say who his clients are…Fromovich founded Alpha Bio Implant in 1988…The breakthrough came only in 2003, after another dentist, Nitzan Bichacho, contacted him about making advanced implants. The development team added dentists Ben Karmon and Yuval Jacoby, and together the four created a new type of implant…”

Given the above description of a seeming start-up operation, was the purchase of Alpha Bio mainly a defensive move on the part of Nobel, in an attempt to lock up some new type of technology or fend off a patent lawsuit on related Nobel technology?

What are your thoughts? Will these acquisitions lead to improved implant technology that helps both practitioners and patients?

47 Comments on Nobel Buys Alpha Bio: What is the Motivation?

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Brian James
2/12/2008
I would venture the fact that their new implant is a copy of the Alpha Bio implant might have something to do with it.
RobMee
2/14/2008
Alpha Bio developed the current NobelActive implant. Nobel Biocare apparently did not, or maybe forgot, to stipulate that Alpha Bio cease selling the Alpha Bio version of the NobelActive implant outside the US. Alpha Bio was selling the implant for somewhere around 1/3 the price of the NobelActive implant. There was nothing Nobel could do since Alpha Bio was not doing anything wrong by selling their version of the NobelActive. How does Nobel justify the 2.5x price premium for the Alpha Bio version? That is the $95 million question. In my opinion this was the motivation behind the purchase of Alpha Bio. Eliminate a low priced competitor to NobelActive. Nobel has some very lofty ambitions for NobelActive. Thus far though they have trained about 500 doctors in the US to place this "implant of the future." This was disclosed in the year end results conference call on 2/11/08. There are about 95,000 dentists in the US. It is highly recommended by Nobel that doctors placing the NobelActive attend a training course. At the rate they are training it will be quite a while before this implant has any effect on the market or their bottom line. A side note. The owners of Alpha Bio unsuccessfully shopped their company three years ago in the US with an asking price of about $5-7 Million. No takers. Now, 3 years later, Nobel pays 14 times that for the company. This is a great deal...for Alpha Bio.
Dr. Debra Occeña-Sablada
2/17/2008
Do you mean that Alpha Bio will cease to exist ? I have been using their implants for 2 years now and have been very happy with the results (and their competitive pricing... )
Dr.Leo
2/17/2008
Thats the point,I think Nobel is moving into low budget implant market.With Alpha Bio present in over 40 countries,it is a good vehicle to increase market shares in this segment.
Idit
2/27/2008
I was told ( as this buyout created a bit of a buzz here in Israel in the dentistry community) by Dr. Chaim Schloss,the head of the School of Dentistry in Tel Aviv, that the company WAS NOT purchased for their product but rather for their distribution channel. Just what I was told and don't know if it is factual or just a damaged ego. Dr. Leo - you hit the nail on the head, it seems.
shlomo
2/27/2008
Do you actually believe that Nobel needs additional distribution channels? They are already everywhere. Alpha Bio was purchased because of the product and the NobelActive Implant. RobMee has the correct interpretation above.
Dr Granderson
3/6/2008
How could Nobel not charge more for the implant? That is the question. Yes, it is an Alph Bio implant with Nobel's TiUnite surface. We all must remember that it is necessary to pay more to have the support the company offers. If you need help you can contact Nobel's technical support. If your restorative doctor has questions or needs help restoring an implant who do they call? The Nobel sales rep. If you have a new surgical assistant, do you always have the time to train them on the system you use? The fact remains- You pay for that support. We have called the Nobel sales rep on short notice many times if we didn't have the right part and they where there for us. Nobel will train the restorative docs for me and also help me market my practice. I have increased my practice by having the sales rep host restorative courses and educate my staff on how to educate my patients properly. I will gladly pay the extra expense to have the support and backing I get from Nobel. My patients are also comforted in knowing Nobel is there to be supportive as well. There are other good implant companies in the market but so far, in my area, I can't beat the SUPPORT from Nobel!
Albert Hall
3/16/2008
Again, we will see Nobel users buying cheap implants for high prices.... How they will handle that for night to day alpha Bio implants will be sold as NobelBiocare Implants???? But again....Nobel Customers are easy to convince.....
Dr SDJ
3/22/2008
Rightly said Dr Albert Hall!
Cronos
3/24/2008
Does anyone know for certain what Nobel intend to do with Alpha-Bio? Will I still be able to buy Alpha-Bio implants (which I have found to be absolutely excellent) from Alpha-Bio or will Ihave to start dealing with Nobel Reps? Thanks.
Dr.Leo
3/25/2008
There will be changes,difficult to predict how radical.I belive SFB will sease to exist,so far Alpha-Bio stopped selling their surgical drills.
dean
3/29/2008
I would think that the reason for the aqcuisition is the implant design, which has a patent that AlphaBio owns. A very good technical support, how excellent it may seem, cannot be patented( I think). Any dental implant company can improve it's technical support without having to spend $95 million. Nevertheless, only time will tell how many dentists will be willing to spend extra dollars per implant, for a good technical support. Queston is, where do AlphaBio users get their implants now? This needs concrete answers
Albert Hall
3/29/2008
Buying a company for attending "1st Class users " and "economy class users " with the same product is a wrong sales strategy because doctors will buy from other markets and the US and europe market will loose position toward competitors. Nobel share is now 235 swiss francs and they appointed a former friend from Mr,Scala to re-direct the whole financial situation. What happen when you call friends to help you? New companies are going to be more competitive because Nobel can not maintain the burocratic positions and the ridiculous sales strategies.
Albert Hall
3/29/2008
Dr.Leo prepare a speech to your wife explaining why you are bringing less money home! For Nobel customers are more inportant to talk each other about their skills, rather that their own families....they might be wealth enough I do not know that.... Many doctors beleive by buying Nobel Biocare Implants they are shortening the lack of knowledgment and wisdom in this profession. Worst is that patients do not know the doctors........
Dr.Leo
3/30/2008
Sorry,I didn't get it.Why should I bring less money home?
Sheldon Lerner
3/30/2008
Which patent does Alpha Bio own? An internal hex with a morese taper connection above has been around forever with Astra. The shape of the Alpha Bio is similar to Pitt Easy as well as the One piece O company implant.
Sparcatus
3/31/2008
I for one will stop using Alpha-Bio if Nobel nobble it by putting up their prices and subjecting users to their silly sales reps. There are plenty more low cost / allegedly high quality implant companies out there who do not spend a fortune every year on reps and marketing. Niznick's company springs to mind, however I've heard that what he sells is of dubious quality (or is that what he said about Alpha-Bio?!)
Donald
4/3/2008
Maybe when you purchase those cheap implants you'll put them in your Mother, at the same time pass on the savings to your patients, but you'll leave the office and drive home in your BMW! I thought we were in this business to provide our patients with the best products and care. Our patients put their trust in our hands and it is up to us to deliver the best care possible.
Dr.Leo
4/5/2008
Might be,but i am not in this business to make fat profit for Nobel shareholders.About two years ago I had a chat with a CEO of an implant company and of the record he admitted that basically all implants do integrate,the rest is marketing.So much for this.
Dr. G
4/5/2008
All of the "big-market" implants integrate at a highly successful rate, with the possible exception of 3i. That point shouldn't have been in question when you had your alleged discussion with a CEO. Nobel Biocare offers a predictable result and is far and away the easiest system to work with. There's no question that you pay for marketing, but where isn't that the case?
Dr.Leo
4/6/2008
Typical Nobel marketing"far and away the easiest system to work with".
Donald
4/7/2008
Nobel Biocare is a freely purchased through your stock broker, 10 years ago you could purchase Nobel Stock for 14SF and 4000 shares or 56000SF is worth today 1,000,000SF. Now, if you place 1000 implants a year like typical Nobel Users, whats the difference between 96% and 99% success. 30 additional implant failures, which in turn eats at your profits from the 960 successes or what I hear 4x30, so 120 successful implants pay for your failures and by the way implants don't fail. The biological site fails, to integrate with the implant, it just seems to happen more often with other companies who don't have an answer to TiUnite. Why would I want to drive a stick shift car, if I can drive a BMW that practicly drives itself. If i'm getting heart surgery, I hope the surgeon is using the easiest system to work with, but I guess some of us want to live in the dark ages of dentistry.
Bobby
4/8/2008
Donald, It's you who lives in the dark ages. It's not Alpha-Bio who have had problems with their implants and have had to withdraw them from the market!! I guess that if you can only afford to drive a BMW (more common than Fords in the UK!) you are doing rather less than 1000 implants per year and if you need a shift stick to help you drive this would explain why you need the most simple of simple implant systems and not necessarily the best. You stick to your 'Implants for Dummies'; the rest of us will continue to offer our patients rather more for a smaller fee.
Donald
4/8/2008
It's clear you didn't read the label, and your response is off base. Considering your lack of knowledge, I'll pass on providing a real response.
Dr. Grobeisen
4/11/2008
Let me put some input here , I am an Alpha Bio user in Mexico , as far as I know the purchase is do to the patent , and also for Dr. Nitzan Bichacho's efort to try to do some better quallity implants , the worst thing is that all of us Alpha Bio users will in the future will have to use Nobel or other company's implants ( by the way , someone asks what they will use , try MIS Implants , A-B implants or Hy-Tech implants that are almost 100% compatible or try to serch for some components by Attachements - International ), also I do not thing this is a matter of marketing or quallity ,this is a matter of bussines ( in my humble opinion ) but we will see , if the only design will be from Nobel I will use it because it works fine , at least in my practice.
dean
4/11/2008
it's the NobelActive that looks very much like AlphaBio's SFB. the thread design and the bevel. that's the design we're talking about
Dr. Grobeisen
4/11/2008
Yes Dean that is right , a combo of the SPI and SFB, but the conection is diferent , as far as I see in the NobelActive , and AlpheBio's catalogs , at least in Mexico we do not have yet the NobelActive , and you have to take a course to use the system ( NobelActive ), I will appreciate some info
Dr. Vijay Armitraj
5/21/2008
Words from the Nobel CEO: NobelActive will be lauched mid May and will be supported by a one year multy center study... One single one-year long study???? Do you feel confident using it???
R2D2
6/11/2008
I think that Nobel Biocare has closed Alpha-Bio down. As a UK user, I no longer get any response from the Israelis or the German distributor when I email. The Uk distributor bailed out months ago. This is potentially a big problem for some of us... If Nobel has screwed us over then I am going to switch to implantdirect and buy the Nobel copies just to spite them!! Anyone got any info on this please?
Albert Zickmann
6/12/2008
Blue Sky Bio is now available in the UK and you may find the internal conical connection in addition to the trilobe connection a great asset. In some respect, this connection is compatible with replace prosthetics and has advantages of the conical connection of the active.
Dr.Leo
6/14/2008
If you like Israeli implants,you can try MIS,AB-Dental or Adin implants. They are all Alpha-Bio compatible and they would go an extra mile to work with you.I personally switched to MIS but the other two will work fine as well.If you are a bit more adventures try ARDS implants,a new concept of placing implants all together but has an internal hex,so that the prosthetic remains the same.
Dr.Leo
6/15/2008
MIS is market leader in Israel and has FDA approval. Seven is the implant you should look at.I have been using their prosthetic components with Alpha-Bio implants for more accurate fit for some years,before switching to their implants after Nobel takeover.
R2D2
6/17/2008
Thanks again, I emailed MIS last week, but frustratingly haven't heard anything from them yet. A couple of years ago they were actively seeking UK dentists, but I don't think anything came of it.. If anyone knows of an MIS distributor I could deal with personally, then please let me know. Thanks again.
Dr.Leo
6/17/2008
To R2D2, I left a contact for you on osseo news,but as I have experienced before, it was deleted. You can contact me under leo@mashensky.com and i'll forward you the details.
Dr. Membrive
6/19/2008
I am the responsible for the sales to Portugal of a Brazilian Implants Brand. We sold on the last two years around 4.000 thousand implants on the the Portuguese market as we don't invest a lot on it, from all those implants I have been asked to replace only 3 implants which did not succed - 3 among 3 thousand - our implantes succed equaly or more as Nobel Implants and futhermore we offer a very special customer service and the simpliest implant system of the market in terms of instruments as our whole cirugical and protetics system have only one single key and our price is around a quarter of Nobel prices. I am amused by the fact that Drs. people still believe there are doing the best to their pacients offerind them Nobel products that has nothing more than the most expensice marketing.
Zeev Schriber, Alpha-Bio
7/1/2008
Many rumors about the acquisition of Alpha-Bio Tec by Nobel Biocare have been going around, and this is to resolve all the speculations and rumors. The acquisition of Alpha-Bio Tec by Nobel Biocare creates a leading force in the dental implants world market. With this acquisition, Nobel Biocare will obtain all rights to Alpha-Bio Tec’s trademark, brand names, innovation pipeline, strong R&D network and proprietary manufacturing facility in Tel Aviv. Nevertheless, the two companies will continue to serve the market under two separate brands, in which each company will maintain its distinct brand identity. According to Domenico Scala, CEO of Nobel Biocare, this acquisition expands Nobel Biocare’s leading position by allowing it to enter new and fast-growing market segments. Alpha-Bio Tec’s leading position in Israel, its attractive pipeline and strong innovation skills with excellent people will complement Nobel Biocare's innovation capabilities. With a market share of more than 60 percent, Alpha-Bio Tec is the leading dental implant company in Israel. Alpha-Bio Tec products are sold in more than 40 countries, and its export business has been growing at a pace in excess of 35 percent over the past several years. Alpha-Bio Tec continues to conduct research and development, constantly working on innovations in the field of implant dentistry. With its innovative Arrow Press Implant System and the new Arrow Press Changeable, Alpha-Bio Tec continues to grow and expand its business both in existing and in new markets.
BJ
7/1/2008
You all are so high and mighty...squabbling over "this implant costs more than that one because of marketing, etc." Don't see any implant surgeons in my area that use knock-off, inferior, lesser brands than Nobel, cutting their surgical fees!!! Still charging anywhere from $1500-3000 per tooth for placement and/or temporization. So much for passing on the savings to your poor patients. In my opinion, like most things in life, you get what you pay for. As for dental implants, go with a cheap, kock-off, but when you need questions answered or assistance, good luck finding help. Nobel is unmatched in this industry in terms of cutting edge technology, support for both surgeons and restorative dentists and their patients.
Robert56
7/2/2008
Ya right In 1995 Nobel Pharma , Then Branemark, went to the lack of support model and started focusing on sales alone. Other companies have passed or matched the product and added support that is expected chairside. Ask your local rep to help chairside and bring some parts. If they don't, then find one who will on your time. Not theirs.
carlos gonzalez
9/18/2008
alpha bio models spi or sfb are the best implants I have use, they will still selling these implants until 2010 that is the time alphabio sign contracts with the international distributors, Nobel will respect this contracts, after that it seems that No one knows whats going to happen, I personally thing that nobel will have to change the way they are trying to sell the active model. I´ve been invited to a course for place the active implant, the doctor that gives the course had place arround 40 nobel active, and nobel wants me to pay for these course? sorry I have already place more than 500 alpha bio so what do I need to learn to place that implant, economics are change a lot arrond the world I won´t be sorprise if nobel decide to keep a spi implants in reasonble cost pararels to the nobel active line thanks
dr ahlawat
10/4/2008
what about 3m acquiring imtec ? anyone can give any insights. have been using endure and mdi from imtec since the last 2 years am pretty happy with the results and the simplicity and practicality of the system.but what happens once 3m take over?
Frank Nelson DDS
11/30/2008
Are there any new developments on this issue? One specific question: As NB develops compatability of Nobel Active with their software, will there be compatability with the Alpha Bio implants in any form? fmn
ashes
12/15/2008
I'm still not getting enough information here to decide on implant system? I'm currently using Nobel, but as we all agree here it's very expensive. So how can I make it more affordable for patients if I can only feel more comfortable using the more expensive brand?
R. Hughes
12/16/2008
Consider MIS or AB dental. Both are of excellent quality and at a fair price.
Odyseas Kanenas
3/20/2009
Hi friends! I am an oral surgeon and i have also used alpha bio implants amoong other systems. I find alpha bio to be very cost effective and ,really, they do integrate. Alpha bio stiil exists and sells, but there is no more SFB. it has become nobel's active with a mouch higher price.to answer to those of you who want to knoe WHAT is with SFB it was the concept and the design! yes ! the design.it was , then, innovating; for all the screw like implants with internal hexagon yes it was inovative. the first company ever to use slopped shoulders to their implants was STRYKER transformed later in todays BICON.from then every single implant produsing company has tried to apply this innovation to their products; others with succes and others not.weel Alpha bio did it with SFB; and it was highly efficient and in a very ''delicious'' price.NOBEL says that they have brought SFB to its rightfull place evolving its prosthetic posibilities but i personally dont agree. it was just fine like it was. We all know better than that. It is OUR SKILLS who make the differnse prior to enything else. My only problem with alpha bio was the support from skilled personel; almost un-existing. For those of you who have problems finding parts for your already alpha bio treated patients try the parts of MIS implants;also low cost and tey fit; or try to buy from Romania. ALPHA BIO ROMANIA AND WEST DENTAL firms are the distirbutors. I am sure they would be happy to sell some more, and, guess!! intra european sales do not have VAt or TAv or TVA ( no matter how it is called in your country). One thing is for cerrtain, as fa as i am conserned; i am not going to by Nobel. GOOd LUCK to everyone
R. Hughes
3/21/2009
You can still obtain alpha bio implants from AB Dental at 310-980-4402. The contacts name is Pini. AB is an Israle company, with a distributor in the USA, just like MIS. These are great implants that are user friendly and easy to restore.
edward
3/22/2009
Alpha Bio and A B Dental are two distinct Israeli implant companies.Hard to believe that A B Dental markets Alpha Bio implants in the U.S. or indeed in any other country.It's like saying Implant Direct markets Zimmer! Strange bedfellows!! h
R. Hughes
3/23/2009
It's all about money!