March 12, 2007
LOS ANGELES BUSINESS JOURNAL
Machine Shop at the Calabasas manufacturing facility of Dr. Jerry Niznick’s dental implant company, Implant Direct.
Dr. Jerry Niznick, “the godfather of the American dental implant industry,” sold his former implant company but is still active in the sector. By DEBORAH CROWE
nce dubbed the “godfather of American implant dentistry” by Barron’s magazine, Dr. Jerry Niznick enjoys a bit of a bad-boy reputation. Not only does the 64-year-old entrepreneur enjoy riding his Harley Davidson Fatboy motorcycle and is a licensed commercial-rated jet pilot, these days he is making waves shaking up the dental implant industry with his latest Calabasas business venture. His Implant Direct Company, which launched last year, has gained attention in the medical device industry with its Internet-based marketing approach that is creating a price-point shift in the cost of implant dentistry. Dental implants, tiny titanium screws that are embedded into the jawbone to support a prosthetic crown or bridge, are increasingly popular among baby boomers seeking a more natural-looking and functional alternative to a traditional denture or bridge. But Niznick believes implant products, often costing upwards of $550 per tooth, are unnecessarily expensive and that limits their market. The outspoken Canadian native believes he can offer an equal or superior product for as little as one-third the price of the 5 major implant companies, each with annual sales between $100M and $700M. That might be empty talk from some, but consider his track record: Throughout the 1980s and 1990s, Niznick trained thousands of dentists worldwide on the placement and restoration of his designs of dental implants, manufactured by Paragon Implant Company. Six years ago, Niznick sold Paragon for $102 million to Sulzer Medica. At the time he sold Paragon, Niznick held 23 U.S. dental implant patents. He has since obtained two new ones and has seven pending. This serial entrepreneur has several other business interests including Acromil, a City of Industry Aerospace Manufacturing Company and Tactile Technology, a Medical Device Company in Israel.
Question: Why did you become a dentist? Answer: I’m mechanically inclined and like working with people. I also like to golf so I figured I could run my schedule a lot better as a dentist than as a medical doctor. After I got my dental degree from the University of Manitoba, I took two years of advanced training in prosthetic dentistry, the specialty of replacing teeth. I opened a practice in the San Fernando Valley in late 1968. Since I was the only prosthodontist in the valley at that time, I got a lot of referrals of patients without teeth because many dentists did not like to make dentures. This eventually got me interested in dental implants as an alternate solution. Q: Why is that? Answer: There are very limited things you can do to help a patient with dentures – even if you do a great impression (of the mouth), the thing still floats around. In the early 1970s I got involved with dental implants at a time when there were only around 500 guys in the country doing them. The results at that time were not very predictable. By the late ’70s, I thought I could design a better implant. What I came up with in 1981 was called the Core-Vent Implant. It would become firmly anchored to the jawbone when the surgical procedures were strictly followed. Prior to that, most implants were held in place by fibrous tissue with unpredictable results, requiring connection to teeth for stability. Two Core-Vent Implants could be used freestanding in the lower jaw to retain a complete denture. This treatment, which I documented in 1982, is now considered the Standard of Care by the American College of Prosthodontists.
Question: In addition to the design, what made your dental implants commercially successful? Answer: I was at the right place at the right time. In 1982, I launched my implant sales and started training people how to use them in live surgical courses at my office, and at lectures around the country. Ayear later a Swedish company, now known as Nobel BioCare, came out with an implant that also became firmly anchored to bone, a process they called “osseointegration.” The clinical results with their implant had been documented at a university study in Sweden, with 15 years of research to show that bone anchored implants would probably last the lifetime of the patient. That brought credibility to the field. With the simplicity, versatility and economy of my implant system, plus the readily accessible training I was offering, my company grew through the 1980’s to be the most widely used implant by the end of that decade. I had three or four years with very little competition before other companies emerged, but the market was relatively small then by today’s standards. Question: How did you market the product in those days? Answer: I sold education, not the product. The sale of the implants were the by-product of the training. Question: What did you do after you sold Paragon in 2001? Answer: I stayed on as a consultant for a year before leaving to pursue other business opportunities. I did retain ownership of the Calabasas manufacturing building, and that is what eventually got me back in the business, when their lease expired in 2004. Question: What do you enjoy about flying planes? Answer: It’s like playing the ultimate video game. You’re going at 500 miles per hour, monitoring all sorts of electronics on the control panel. You have to be aware of everything that’s going on around you. I think it sharpened me up in multitasking for running several businesses at the same time. Question: You’re now in the middle of a 35-city barn-storming lecture tour around the country to introduce dentists to your new “Spectra-System” product line. How does having your own jet help? Answer: It has allowed me to schedule four consecuitve evening lectures in different cities which would be difficult, if not impossible to do if I had to rely on commercial airlines. Question: What about your other investments? Answer: I found it just as much stress and work investing in real estate and stocks as it was running a business, with a lot less control in growth of the asset or income. I’m much happier having businesses to run. The aviation business I acquired out of a bankruptcy sale has made a complete turn-around, hitting $3.4 million in sales last month. My new dental implant business, Implant Direct, has tremendous potential as this multi-billion dollar industry is still growing at about 20% a year. My R & D company in Israel is developing an image guided system to improve the accuracy and simplify of placing dental implants. It is exciting to develop new technology. Question: What led you back into the implant business? Answer: In 2004, I got my building back when the lease expired, along with about 90 of my former employees who did not want to relocate to San Diego. While my non-compete extended for another two and one-half years, I had no restrictions on preparing to compete so less than three years after selling my implant business, I had my factory and key employees back, manufacturing the next generation of implants. Question: Did you see an undeserved niche in the implant industry? Answer: The market for implants had expanded dramatically since 2001. There are many more dentists trained to do the procedures and new techniques, such as bone grafting and image guided surgery, enabling dentists to place implants with more success and accuracy. It’s really become the standard of care. I was doing $30 million a year when I sold my implant company in 2001, and the company I sold to was also doing about $30 million in its dental implant division. Now, six years later, they are reported to be doing around $180 million, mostly with my old products. This is the fastest growing medical device market with a cost of goods of under 20%. Unfortunately, much of the growth in sales has been due to price increases without much innovation or added value, creating a unique business opportunity for me.
Question: So what innovation do your new products provide? Answer: I have produced a unique system of application specific implants, each containing all the components in one package to complete a specific type of case. I also offer the broadest product line in the industry with 8 different implants. I was able to improve quality and reduce manufacturing costs by adding the latest computerized monitoring equipment to each of my 26 new CNC screw machines, allowing 24/7 lights-out production. While adding innovations, I retained some common features with the most popular systems (Zimmer and Nobel Biocare), lowering the barriers for dentists using these systems to switch. They do not need to buy new drills and the abutments sold by these companies fit into some of my new implants. I offer a full line of prosthetic components for their systems as well, at substancial savings. Question: What’s so exciting to you about the Internet? Answer: We’re at a major turning point in the sale of consumer products. The Internet has flattened the world. I can get into the office of a dentist in Bombay with the click of a mouse. Before, I would have needed salespeople or a distributor. Implant Direct’s website (www.implantdirect.com) contains computer graphic videos showing the use of our products and a 12 minute video interview explaining my 25 year history in the implant industry. This shows the product innovations and how simple it is to use our interactive shopping cart ordering system. We also provide online, features and cost comparisons with the leading implant systems. We collect the payments in advance of shipping, using credit cards, and ship the products anywhere in the world within 2 days. We even have five Web cameras 24/7 in our factory so that dentists can view live operations and buy from us with confidence, knowing that we produce our own products with state-of-the-art equipment. Question: Aren’t you are also involved in another medical device company? Answer: I am the CEO and owner of a company in Israel called Tactile Technologies. It’s developing image-guided placement for dental implants using CT scan technology. I’ve been funding and directing this R&D for over three years. It’s already being used in Israel and we have filed for FDAmarketing approval with anticipated launch in the US before the end of the year. Other companies produce a surgical template with holes to guide the drills but no other system allows the dentist to change the guides based on clinical findings at time of surgery. It also offers unmatched simplicity, precision and cost advantages that could assure greater clinical success with experienced clinicians and reducing the learning curve for dentists just starting to place implants. Question: You also own an aerospace company. How did that come about? Answer:Acromil Aerospace Manufacturing Company was in Chapter 11 bankruptcy in late 2002. It had a 60,000-square-foot building on 5 acres in City of Industry. I bought its $10 million bank debt for $3.2 million and became the only secured creditor, giving me control over the re-organization plan. After funded the company out of bankruptcy by settling with the unsecured creditors, I invested heavily in updated manufacturing equipment, more than doubled the number of employees and made a 40,000 sq. ft addition to the existing building. Acromil is now making precision structural parts for companies like Boeing, Lockheed, Embraer and Northrop., with over $100 million in firm contracts in the next four years. The Aerospace and Dental Implant industrires both have unlimited growth potential. Jerry Niznick DMD, MSD - Title: Chief Executive Officer Companies: Implant Direct LLC, Acromil Inc., Tactile LLC Born: 1943, Canada; now a U.S. citizen, living in Las Vegas Nv Education: DMD, University of Manitoba Dental School in 1966; Certification in Prosthodontics, University of Southern California in 1967; Master’s Degree in Prosthodontics, Indiana University in 1968; Honorary Doctorates: University of Manitoba, Canada and Tel Aviv University, Israel. Career Turning Point: Taking advanced training following dental school that made him aware of the potential in the implant industry during its early years Most Influential Person: His wife, Reesa, a very practical person who doesn’t let him fool himself Personal: Married 43 years, two daughters, six grandchildren Hobbies: Flying, riding motorcycles, golfing.