ANALYST: MIXED OUTLOOK FOR BIOLASE IN WAKE OF DISTRIBUTION AGREEMENT WITH HENRY SCHEIN

Medical laser manufacturer Biolase has had "a mixture of encouraging and concerning signs" in the first few months following a distribution agreement with Henry Schein, an analyst says.

The distribution agreement was announced in August. Under the agreement, Henry Schein became the exclusive distributor of Biolase dental laser systems, accessories and services in the U.S. and Canada.

"We are looking for signs of progress or friction," Lazard Capital Markets analyst Alexander Arrow said Dec. 18. "Early discounting, reliance on promotions and stocking of distributor channel with units in the September quarter are signs that concern us."

But Lazard is encouraged by "the customer-to-customer dynamic that the combined sales force is fostering via small-group dentist dinner discussions."

An analysis of return on investment means Biolase's Waterlase MD "pays for itself in 11-12 months," Arrow said. "Since 'sticker shock' from the Waterlase's $85,000 price tag is a major challenge for dentists and sales people to work through, we believe this is an on-target sales message."

The Waterlase MD is a dental device that uses a combination of laser energy and water to perform traditional dental procedures with milder anesthesia.