How it Works

How It’s Marketed

How It’s Financed

How It’s Made

Who’s Behind It

How It Stacks Up

Fox’s Claims

Corrections or additions?

Toothpaste War: No Biting

Enamelon, Church & Dwight spar for market share, But Crest and Colgate are still the Goliaths.

This story by Barbara Fox was published in U.S. 1 Newspaper on December 16, 1998. All rights reserved. by Barbara Fox

It will be the next Crest, says Steven R. Fox. The Enamelon formula for toothpaste is the most exciting development in dental care since the introduction of fluoride, he claims. In Fox's strictly opinionated view -- he's the Enamelon CEO -- the brand will cause all the other toothpaste makers to, well, gnash their teeth.

Fox, 44, has just moved the headquarters of his firm from 5,000 square feet in East Brunswick to 18,000 feet at Cedar Brook Drive. A dentist and an entrepreneur, he bought research that was 20 years in the making, licensed the rights from the American Dental Association, and founded Enamelon. He took the firm public in 1996, raising a total of $55 million, and early this year he launched the product nationally, complete with a major television advertising campaign.

This toothpaste is said to "remineralize" the surfaces of your teeth. "Nobody's ever been able to do what we have been able to do," says Fox (who is not related to this reporter). "It is very much like putting calcium into bone. In bone, you can only do it with blood supply. In teeth you can only do it by adding something to the saliva."

The patents and the financing are in place for him to take a big bite of a market worth $2 billion in this country alone. But Enamelon is not a mega company. How can it possibly gain significant market share against the old favorites -- Crest, Colgate, and Pepsodent? Church & Dwight, the North Harrison Street consumer products maker, has been in the toothpaste market for 10 years, yet it has just over 6 percent of the market.

"It is very rare to have a new therapeutic claim. We are the first new one in 50 years," Fox maintains. "No toothpaste has ever gotten to our stage and still succeeded, because it is too hard to get shelf space, too hard to raise the money, and too hard to get a therapeutic claim. This is a David and Goliath situation." But he professes not to be worried.

"Bill Gates knew he was competing with a bigger company, IBM. He didn't crawl under a rock," says Fox. "I am not the least bit worried about their retaliation. They can worry about me, I don't. I will do everything I can to get it out there. I'll send a boat down the Hudson River and drop anchor in front of the Colgate sign. We will be able to separate ourselves with something that I believe is superior."

Top Of Page
How it Works

Enamelon is supposed to help fluoride do its job -- fight plaque acids produced by sugars and food. Plaque acids erode tooth enamel and Enamelon calls this erosion "demineralization." But when fluoride combines with calcium and phosphate in saliva, it helps reintroduce minerals into the tooth structure. Enamelon calls this "remineralization."

But your saliva may not contain enough calcium and phosphate for fluoride to work. So Enamelon adds it. Fox says the product will "seek out your teeth's weakened areas" and "provide over eight times the amount of soluble calcium normally found in saliva to strengthen teeth during brushing."

Eating calcium-rich foods or taking calcium supplements won't work, says Fox, to replace the calcium on your teeth. "The blood supply will not bring calcium to the teeth once you are over the age of 17. Calcium that's digested and systematically absorbed won't reach the surface of the adult tooth because tooth enamel has no blood supply. Conversely Enamelon is not intended to increase calcium for dietary purposes."

Everybody needs remineralization, says Fox, not just children: Some need remineralization more than others. The need is based on various factors, including genetics, diet, the amount of saliva in the mouth, the amount of calcium and phosphate in the saliva, the fluoride in drinking water, the lack of fluoride in bottled water, and medications taken that affect saliva levels.

"What's interesting is that bottled water has made the problem worse," says Fox. "Medication has reduced the flow of saliva -- antihistamines, Prozac, radiation. One fourth of the adult population has reduced salivary flow, and one in five has sensitivity in the teeth."

Older people are particularly susceptible to decay because their gums have receded, exposing the softer roots. Fox cites a worst/best case of a man who had had treatments that totally destroyed his saliva. He was literally losing the enamel on his teeth daily, and Enamelon was like a miracle cure.

Another specialty group that needs to add extra calcium are those who are wearing braces. For orthodontists, the worst nightmare is to take off the braces and see white spots on teeth where the braces were. White spots are not extra calcium, they are where the calcium has eroded. "These white spots are hypocalcification. We reduce white spots by 30 percent within three months," says Fox.

Enamelon contains no peroxide to bleach the teeth or "harsh abrasives" which may cause long term harm to the teeth, he says. It does not "over-mineralize" teeth with too much calcium because it penetrates only porous areas. "Once a porous area has been remineralized, Enamelon will not add further minerals, but can continuously protect against demineralization on a daily basis."

Figuring out how to effectively combine calcium and phosphate with fluoride has taken several decades. The American Dental Association co-sponsored research on it with various government agencies. Fox purchased the patents in 1992 and has spent $6 million to continue the research at 17 universities. The firm has published 11 studies and has 24 patents and patents pending.

"You will feel something different from Enamelon toothpaste," promises Fox. "The feel on the tongue is different. Your teeth will feel smoother, will feel glossier."

Top Of Page
How It's Marketed

David's five smooth stones look paltry compared to the marketing muscle of a Goliath like Colgate-Palmolive. For the first time in years, Colgate-Palmolive's brand Colgate has edged past the ever-popular Crest. In part because of heavy spending on other new brands, Colgate has 28.1 percent of the toothpaste dollars, and Procter & Gamble's regular Crest has 24.9 percent. Meanwhile SmithKlineBeecham's Aqua Fresh has 10.4 percent. Mentadent, owned by Chesebrough-Ponds USA, has 9.6 percent. Church & Dwight's Arm & Hammer Dental Care has 5.8 percent. Enamelon has 0.6 percent.

Of course Enamelon is a newcomer. Enamelon began initial shipments of its toothpaste into test markets in March, 1997. By June 1997 the product was in test markets representing 5 percent of United States households, and by September it was able to announce that it measured 3 percent market share in those markets and was ready for the national rollout. It began national distribution in January 1998, and the latest figures show that it had climbed to a 1.5 percent share for the month of October.

Enamelon has four sizes, ranging from the one ounce sample size to six ounces. It sells for a few pennies more than "regular" toothpastes, and most food stores and mass merchandising stores carry two sizes, while drug stores carry three sizes. Fox is working on three different kinds of toothpaste (regular, whitening, and desensitizing) plus over-the-counter products that could help prevent early stage decay. It has exclusive worldwide rights for toothpaste, the chewing gum, food, and candy. SmithKline Beecham bought the exclusive license to market related products (oral spray and mouth rinse) in the United States. Both SmithKline and Enamelon hold nonexclusive international licenses for these products.

But just look at how hard it is for a toothpaste to squeeze out additional market share. After 10 years of making baking soda toothpaste, North Harrison Street's Arm & Hammer brand can claim less than 6 percent of market share.

Again, Fox is optimistic. In 1996 when 2 million shares were sold as part of the initial public offering, the firm had just seven full-time employees, and now it has 48. "People have left 20 and 30-year jobs because they believe in this product," he says.

"We do have money, nearly $20 million in the bank, and we do have influence in the dental community," says Fox. "I bought out the license, at $400,000 a year, for the lifetime of the patent, which has about another 20 years to go."

Top Of Page
How It's Financed

Fox says he is the only person in the United States to have had four private placements and two public placements in two years: "I raised the first $4 million myself because I didn't want to go near the venture capital community. I decided I could do better by myself."

The IPO in 1996 brought $11.9 million which was followed by a private placement of $16 million, divided into fourths: $4 million for marketing, $4 million for research, $4 million for manufacturing equipment, and the rest for working capital and expenses.

In 1997, the period in which Enamelon was doing test marketing, Allen & Co. led a $13.1 million private placement, and Lehman Brothers raised about $26.3 million with a public offering. The new shares were offered in October at $16.50.

Also that year, the stock "significantly outpaced the Nasdaq Composite Index's gain of 22 percent." At the end of 1997, Enamelon had $39.5 million in cash, cash equivalents and investments, and at the end of 1998 about $19 million remains. It is trading as ENML on NASDAQ at about 8, down from a year high of 15.8 and up from a year low of 3.25.

Top Of Page
How It's Made

The company's patented split-tube system keeps the formulas separate and soluble until they ooze out on your brush. (Because the tube can be filled with conventional high-speed equipment, the manufacturing cost is lower than for the vertical "pump" type dispensers.) The calcium comes out one side and the phosphate on the other; one of them contains fluoride but the company won't say which one.

Enamelon buys conventional toothpaste tubes and has its custom-designed split-tube system inserted in them. It ships the tubes and the raw materials to Paco Pharmaceutical Services Inc., a 1,200-worker firm in Lakewood, owned by West Company, based in Downingtown, Pennsylvania. Six to eight Paco employees are dedicated to the round-the-clock process of "batching" the product, mixing it up in two 1,000-gallon Lee kettles. First they make a gum base for both kettles, then they add the ingredients for two mixtures.

To fill Enamelon's tubes, Paco devotes 14 people and two manufacturing lines. It takes less than a second for dual nozzles to spit out enough toothpaste to fill each side of one tube. One machine fills one tube at a time, and the other line can fill two at a time. It takes one day to put one batch into six-ounce tubes, and three or four days to finish filling one-ounce tubes.

Top Of Page
Who's Behind It

Enamelon has tried to hire an impeccable team. Two of the top people who report to Fox are expatriates of Church & Dwight, and the rest have good credentials as well.

"We have always picked the best that we could find in the business," says D. Brooks Cole, president and chief operating officer, "whether it be clinical, legal, or ad agency people, so that no one could cast aspersions on the credibility of the people working with us."

Cole went to Rutgers College, Class of 1961, and worked for Vicks Chemical Company, Avon Products Inc. (most recently as vice president), and Mentholatum Company (most recently as president of the United States division). He has been a vice president of the Non Prescription Drug Manufacturers Association, was a consultant to Enamelon in 1993, and was hired as president and COO in 1996.

Norman Usen is vice president of R&D product development. He went to Michigan State, Class of 1965, and has an MBA from Iona College. He helped Church & Dwight develop Arm & Hammer Toothpaste and Toothpowder from 1982 to 1991. He was retained by Enamelon as a consultant until he was hired in 1993.

Anthony E. Winston, 53, vice president of technology and clinical research, is an alumnus of Nottingham in Great Britain. He has more than 60 United States patents and at Church & Dwight was responsible for technology development, clinical research, ADA and FDA interface, claim substantiation, and patent protection for Arm & Hammer's baking soda toothpastes, including Peroxy Care. He joined Enamelon in 1995.

Edwin Diaz, chief financial officer, graduated from Seton Hall in 1984. Thomas Duncan, vice president of manufacturing, went to the New Jersey Institute of Technology, Class of 1970, and has a graduate degree from there as well. Tae Andrews, vice president marketing, went to United States Naval Academy, Class of 1984, and has an MBA from Columbia Business School. He worked for Kraft, Colgate-Palmolive, and Leo Burnett. Louis Machin, vice president of sales, has worked for such firms as Procter & Gamble and Coca Cola, and he has a degree from Columbia State.

On the board of directors are an investment banker, Richard A. Gotterer, an attorney, Eric D. Horodas, and two dentists (S.N. Bhaskar and Bert D. Gaster). Bhaskar is retired as a major general from the United States Army Dental Corps, where he was assistant surgeon general for dental services and chief of the U.S. Army Dental Corps. Gaster is a prosthodontist and a tenured associate professor at New York University's College of Dentistry.

Bhaskar is chairman of the scientific advisory board, which also includes the winner of the 1984 Nobel Prize for Chemistry (Robert Bruce Merrifield, who teaches at the Rockefeller Institute), Joseph L. Henry (former associate dean of Harvard School of Dental Medicine and former dean of the dental college at Howard University), and Jason Michael Tanzer (who teaches at the University of Connecticut).

Top Of Page
How It Stacks Up

Enamelon's initial progress could have been slowed because a number of other brands were introduced this year in a very volatile market. Several took advantage of the fact that Church & Dwight's "baking soda patent" has run out. "The category is exceptionally competitive," says Jim Daniels, Church & Dwight's category manager for oral care. "A plethora of new products has come in the last 18 months. Spending is at record levels, and over 25 percent of category dollars are spent on products a year or less old."

Daniels declined to comment on Fox's product, but he cites clinical studies proving the efficacy of his own. (See sidebar page 55 for more on Church & Dwight.)

Other observers in the dental profession have noted that the jury is still out on Enamelon's technology. The latest of a dozen published studies is an overview paper in the November issue of the Journal of the American Dental Association, an eminent peer-reviewed journal.

Yet Enamelon's president and chief operating officer stops short of saying Enamelon has "proved" beyond a doubt that remineralization is effective."We have spent $6 million and you go step by step," says D. Brooks Cole, "from in vitro studies, to animals, to short-term human clinicals, and the major human clinicals that take better than two years to do. It is the progression of the technology and clinical studies that builds."

Cole says clinical studies are in progress at 10 universities (including Tufts, Indiana, and UCLA) and the results are due within three years. He cites a human study on strengthening tooth enamel that indicates the Enamelon product is more effective in hardening both the intact and acid soft drink decalcified enamel. "It may be especially effective in treating mild exposure due to acid soft drinks," says Cole. But otherwise, "I don't make comparative claims. I will some day but not now."

"That's why you are not seeing wild and outlandish claims. You need to be truthful and you need to have the backup to do it," says Cole.

Top Of Page
Fox's Claims

Fox, the CEO, is more promotion oriented than Cole, and he freely talks about the "new therapeutic claim" and objects to the idea that current studies are not statistically significant. "They are all statistically significant, and we are in the process of doing a lot more also," says Fox. "The papers go through peer review. They are not making anything up. They are writing about the science."

He scoffs at the new competitors: "All of those toothpastes only have fluoride. There is no clinical proof that baking soda does anything to you," says Fox, "and no clinical proof that baking soda and peroxide does anything for you."

Total, Colgate's new brand, he pronounced "Nonsense," and Crest's new brand, Multicare, "more multi-nonsense. It is the same fluoride thing they have had since 1960."

"Remineralization and improving the strength of tooth enamel is at the heart of our product. If you are driving more fluoride into the tooth structure, you are making fluoride more effective. Our fluoride product, soluble calcium and phosphate, has proven to remineralize tooth enamel. It goes on in your mouth every time you eat."

"Remineralization as a technology was not developed until we started to work on it. Restoring, rebuilding tooth enamel and preventing early stage cavities -- the time is now ready," says Fox. "It has not been easy. It has been a step by step project."

The son of an attorney, Fox graduated summa cum laude from the University of Rochester in 1975. "I did four years in three, and I was the youngest professor (assistant clinical professor) in the country," he says. "I was the youngest fellow in the American and International College of Dentistry at the age of 32." He lectures on the subject of remineralization at Harvard's dental school.

Dentistry is a high stress profession: "you deal in a small area with very little possibility for mistake, and it is very tedious," says Fox, who goes to the gym and jogs five miles a day. "You have to have releases." You also, says Fox, need to be happily married to be an entrepreneur; he himself has been married for 17 years and has two teenage daughters.

"My father always said, `Don't tell me how hard you worked, tell me what the results are.' He was a wonderful father and my best friend. He would have loved my starting this company. He is clapping right now, wherever he is. My proudest moment? That I developed a product, took the company public, and did something good for humanity. I hope people will understand, and that we can educate the dental community on the efficacy and the efficiency of this product."

How could a major healthcare project come on the scene with very little notice? "Dentistry is always under the radar screen," says Fox, "even though the dental industry is a $44 billion industry in this country."

And if remineralization is such a good idea, why didn't the big companies buy the patent from the ADA. Fox's answer: They don't take chances. The Proctor & Gambles of the world prefer to buy established products. "The majors were basically ignoring the fact that a two-page patent was out there to be licensed. They are interested in takeovers, to buy a consumer product. I will do what's best for the shareholder but right now I am focused on building it."

"Only one out of a 100 patents becomes a consumer product, and we have already beaten those odds," says Fox. "They are ready to buy it and they are marketing machines."

If Enamelon does manage to seize market share, Fox might have to sell the company to one of the big firms to please the stockholders, but for now he is in charge.

"I enjoyed building this company, and I enjoy seeing the fruition of my labor, seeing it done my way," says Fox. "I enjoy building something worthwhile. There happens to be a thrill in seeing something grow.There is more in life than just making money."

Enamelon, 7 Cedar Brook Drive, Cranbury 08512-. Steven Fox DDS, CEO. 609-395-6900; fax, 609-395-7727. Home page: http://www.enamelon.com.


Next Story


Corrections or additions?


This page is published by PrincetonInfo.com -- the web site for U.S. 1 Newspaper in Princeton, New Jersey.

Facebook Comments