Recently, Align Technology (ALGN) identified interoperability with Cadent Holdings' orthodontic full arch scanning process for the use in its Invisalign treatment. This interceptive Invisalign procedure of Align will be available on Cadent’s OrthoCAD iOC system with latest software version iOC 4.0.
The company is currently conducting final beta tests to validate Cadent’s another major product iTero 4.0 scanning software and expects to identify its interoperability in immediate terms. This has become a major step towards widening both the company’s scope as orthodontists presently using the iOC system and general practitioners using the iTero system demand integration with Invisalign.
Earlier this month Aligned completed the acquisition of privately-held Cadent Holdings, a provider of 3D digital scanning solutions for orthodontics and dentistry and maker ofthe iTero and OrthoCAD iOC scanning systemsfor $190 million in cash. This transaction is expected to dilute fiscal 2011 EPS on a GAAP basis, while it will be accretive to the adjusted EPS in fiscal 2012.
Align believes that the merger with Cadent will help boost the use of intra-oral scanning in dentistry by leveraging Align’s global sales reach, professional and consumer marketing capabilities and a customer base of more than 55,000 ClinCheck software users. The company aims to invest further in Cadent products and look forward to combining both the company’s technology and expertise in order to deliver innovative new tools for the market displaying huge potential.
Apart from OrthoCAD iOC and iTero 4.0, Align plans to maintain all Cadent products and services, which include the orthodontic digital impression system, OrthoCAD iCast, OrthoCAD iQ and OrthoCAD iRecord.
In the first quarter of fiscal 2011, Align witnessed balanced sales growth across all its channels. This resulted from increased number of patients visiting the clinics along with growing interest for high-value procedures like Invisalign. The company’s highest contribution came from Invisalign Full (67.8% of total revenues), which saw a growth of 9.6% compared to the fourth quarter of fiscal 2010. Other products including Invisalign Teen and Invisalign Express also had an encouraging quarter.
Align has undertaken several strategies to further penetrate the malocclusion market. However, the company is witnessing pressure on its margins due to higher operating expenses resulting from its continuous strategic investments in the international market, development of portfolio and costs associated with the Cadent acquisition.
This trend is likely to continue in 2011. Moreover, the competitive landscape is quite disturbing with the presence of players such as Danaher Corporation (DHR) and Dentsply International (XRAY).
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