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Align Technologies (Nasdaq: ALGN) | Company Profile, History, Competitors



Align Technologies (NASDAQ: ALGN) is a dental device company that manufactures clear aligner orthodonia. The company was founded in 1997 and headquartered in San Jose, CA.

Align manufactures the Invisalign product, which is a clear aligner to help strengthen teeth. The treatment comes in various stages depending on the significance of the condition. The company sell its products directly to dentists and orthodontists.

Business Overview

Align operates in two main segments:
  • Clear Aligners (89% of 2017 Revenues): Sells their Invisalign product for straightening teeth.
  • Scanners (11% of 2017 Revenues): Sells dental scanning equipment that submits data to Invisalign for aligner manufacturing.

Segment: Clear Aligners

Align makes Invisalign, a clear aligner product that helps strengthen teeth. Align's products treats malocclusion (crooked teeth condition). The company has 80% market share in the North America clear aligner market [1].

Align's portfolio consists of a broad portfolio of aligners in two categories: Comprehensive Products and Non-Comprehensive. 

Comprehensive Products
Comprehensive Package: Their primary clear aligner product used for a wide range of malocclusion conditions. This package includes Mandibular Advancement (MAF), which is an advanced treatment for orofacial disorder. MAF is pending approval in the United States. The Comprehensive Package can be used for both teens and adults.

Assist: This is sold to general practitioners and primarily used for anterior alignment conditions.

First Comprehensive Package: This is geared towards children 6-10 years old to address earlier malocclusions, including shorter clinical crowns, erupting dentition and dental arch expansion. This package includes unlimited aligners.

Non-Comprehensive
Express 5/Express Package: This is used for the least complex orthodontic cases or for relapse from prior orthodontic treatment. Express 5 package includes up to 5 aligners and Express Package is up to 7 aligners.

Lite Package: This is the same as the Express package but includes up to 14 stages.

Go Package: This is sold to general practitioners for mild malocclusion cases. The package includes up to 20 aligners.

Clear Aligners Treatment Process

Initially, a general practitioner or orthodontist will take a dental impression and submit the results to Align. Align technicians will use the impressions to create a customized 3D simulation plan for the patient. The general practitioner or orthodontist can submit modifications before giving final approval for manufacture.

The aligners are thin plastic devices that are each used in 2 week increments typically in both upper and lower teeeth pairs. The
number of aligners varies from 10 for a simpler Invisalign Express case to 20-30 for more complex Full Invisalign cases. Following treatment, a patient will typically use either a conventional or Invisalign-branded retainer.

The average price of treatment is $5,000 with an average duration of 12-18 months.

Segment: Scanners

Align makes the iTero Element machine, which is an intraoral scanner that can be used for orthodontics. The system provides digital impressions which are sent to Align for Invisalign manufacturing. The system also provides patient simulation and tracking for Align.

The iTero list price is $30,000 with an ongoing subscription fee.

Sales & Marketing

Align sells its products directly to dental professionals. As of 2017, Align had 64,400 active Invisalign providers.

Align offers doctor royalty programs into tiered discounts depending on the number of Align cases.

Manufacturing and Distribution

Align's manufacturing plant is located in Juarez, Mexico. This is where Align manufactures their aligners and scanners.

As of 2017. Align has 420 active US patents and 456 active foreign patents. Their US patents expire between 2018 and 2035.

Competitors

Align's major competitors in clear aligners are ClearCorrect (owned by Straumann) and Ormco (owned by Danaher). Align also competes with Direct-to-Consumer offerings such as SmileDirectClub, Orthly and Candid Co.

History

The company was founded in 1997 by Zia Chishti and Kelsey Wirth. They were students in the dental program in Stanford where they came up with the idea. The company received venture funding from Kleiner Perkins, Caulfield and Byers.

In 1998, they received FDA clearance to manufacture/market Invisalign. In May 2020, Align launched its first product. In 2001, the company went public.

In 2011, the company acquired Cadent, which manufactured the 3D scanning iTero product.

In 2016, the company reached $1 billion total sales.

Management

Joseph M. Hogan (CEO): Joseph Hogan serves as CEO since 2015. Prior, he was CEO of ABB Ltd, a Swedish electrical equipment and automation company. He had also served as CEO of GE Healthcare and CEO of GE Medical Systems.

John F. Morici (CFO): John Morici serves as CFO since 2015. Prior, he was Executive Vice President of NBC Universal Media and CFO of the Diagnostic Imaging division at General Electric.

Financials

 $ USD in millions    2013    2014 2015 2016 2017
 Revenues $660 
$762 
$846 
$1,080 
$1,473 
 Gross Profit $498 
$578 
 $640 
 $815 
 $1,117 
 Operating Profit $94 
$194 
 $189 
 $249 
 $354 
 Net Income$64 
$146 
$144 
 $190 
 $231 
 EPS$0.80 
$1.77 
$1.80 
$2.33 
$2.83 

References

Align Technologies, Inc.
 
  Type     Public
  Ticker     NASDAQ: ALGN
  Industry Healthcare
  Founded 1997
  Headquarters San Jose, CA
  Revenues
$2.0bn (2017)
  Employees 8,715 (2017)
  Website aligntech.com