DENTSPLY, Glaxo in Co-branding Pact - Analyst Blog

Leading dental products maker DENTSPLY International (XRAY) has collaborated with global health care giant GlaxoSmithKline (GSK) to develop co-branded oral care products for use by patients suffering from tooth sensitivity (pain or discomfort), a condition affecting roughly 45 million adults in the U.S. The deal does not involve cash or equity exchange from either party.

The agreement will enable DENTSPLY to co-brand its NUPRO product line with GlaxoSmithKline's coveted Sensodyne toothpaste brand. DENTSPLY's NUPRO products contain the NovaMin calcium phosphate technology, which GlaxoSmithKline acquired through its takeover of NovaMin Technology Inc in December 2009. The NovaMin technology is effective in relieving tooth sensitivity.   

While the deal enables DENTSPLY to make a range of professional tooth sensitivity products, the company is expected to market, in the short term, two co-branded products (NUPRO Sensodyne prophy paste and Sensodyne NUPRO) containing the NovaMin technology.

The deal marks the union of two well recognized oral care brands. Sensodyne is one of GlaxoSmithKline's leading global brands with annual sales of roughly $750 million, holding nearly 10% share of the U.S. toothpaste market.

On the other hand, DENTSPLY's NUPRO products are one of the world's top-selling prophylaxis (prophy) pastes used for removing build-ups on teeth. The pooling of the technologies and expertise of the two entities will result in the development of a comprehensive treatment solution for tooth sensitivity, thereby benefiting millions of patients.  

DENTSPLY's products are used in over 120 countries enabling it to leverage the changing dental practice across North America and Western Europe, which emphasizes preventive care and cosmetic dentistry. One of the company's major customers is Henry Schein Inc (HSIC), a dental products distributor.

DENTSPLY's diverse product range, significant international presence, new product introductions and acquisition initiatives are expected to boost operating metrics over the forthcoming quarters. Moreover, the company is poised to grow its share of the dental implant market driven by a strong product base and significant investment on product/technology innovation and sales/marketing infrastructure. 

However, DENTSPLY's international operations are exposed to foreign exchange translation risk. Moreover, growth in the company's domestic market has ebbed due to a slow economic recovery and competitive pressure. We are currently Neutral on DENTSPLY.

 
GLAXOSMITHKLINE (GSK): Free Stock Analysis Report
 
HENRY SCHEIN IN (HSIC): Free Stock Analysis Report
 
DENTSPLY INTL (XRAY): Free Stock Analysis Report
 
Zacks Investment Research