Shares of dental supply distibutors sank Wednesday after Morgan Stanley issued a stark warning to investors: “Amazon will be here.”
Dental supply distributors Henry Schein along with also Patterson Cos. both closed down more than 4 percent after analyst Steve Beuchaw said in which Amazon will be buying supplies directly coming from oral goods company Dentsply Sirona.
“We have fresh evidence in which Amazon will be accessing critical products coming from Dentsply Sirona,” wrote Beuchaw on Tuesday. “While Amazon makes up a smaller share of average total spending both backward (4 percent) along with also forward looking (5 percent), in which was used by 34 percent of practitioners in our survey inside last year suggesting in which will be doing inroads into many practices.”
The analyst downgraded both suppliers to underweight coming from equal weight. Shares of Henry Schein fell 5 percent while shares of Patterson Companies slipped 4.7 percent.
“We are unaware of any market-leading dental company in which features a direct relationship with Amazon,” a Henry Schein spokesperson said. “We believe in which at in which time Amazon will be a minor player inside dental consumables markets, with an insignificant market penetration.”
For its part, Amazon offered the following statement due to in which story: “We don’t comment on individual relationships, however Amazon Business customers have a choice of products coming from numerous dental suppliers along with also manufacturers.”
Patterson Companies did not respond to CNBC’s request for comment.
Many have speculated in which Jeff Bezos along with also his company could try to disrupt the medical or pharmacy supply chain along with also undermine established distributors like Henry Schein along with also Patterson. By accessing dental supplies directly coming from a company like Dentsply Sirona, Amazon could work to deliver medical devices along with also products directly to dentists along with also additional physicians.
Amazon indicates a majority of the dental products on its business-to-business portal are sourced directly coming from manufacturers, with the additional 50 percent sourced by third parties, wrote the analyst in November, allowing a distributor of Dentsply Sirona products to resell via Amazon.
— With reporting by CNBC’s Michael Bloom.