Recently, Align Technology (ALGN) launched its Invisalign system in China. The company is training orthodontists in the cities of Shanghai, Beijing, Shenzhen, and Guangzhou. Align has been focusing on the international arena over the past few quarters.
Earlier, in October 2010, the company had received approval from the Chinese State Food and Drug Administration (SFDA) to market the Invisalign system as a Class II medical device to treat malocclusion. This is a significant achievement for the company as it would help Align to expand its foothold into one of the fastest growing markets for orthodontics.
Align manufactures and markets the Invisalign system, a proprietary method for treating malocclusion or misalignment of teeth. The system corrects malocclusion using some nearly invisible and removable appliances that help gently move the tooth to a desired final position.
In an effort to further penetrate the malocclusion market by making Invisalign more attractive to both doctors and patients, in May 2011, Aligned completed the acquisition of privately held Cadent Holdings, a provider of 3D digital scanning solutions for orthodontics and dentistry. The company subsequently discovered that Cadent’s orthodontic full arch scanning process is interoperable for use in its Invisalign treatment.
Banking on core product, Invisalign, Align has established itself as a strong player in the orthodontic market. The Invisalign system significantly reduces the limitations of conventional orthodontic treatment (braces) when it comes to aesthetic issues and oral hygiene. To top it, the replacement of the Aligners in two-week cycles puts less strain and pain on the teeth.
The advantages associated with the use of Aligners should help drive patient acceptance and usage. Riding on the sheer strength of this product, the company has consistently booked profitability.
Moreover, Align has been bringing in advanced products in its portfolio to cater to a wider base of patients. The company launched Invisalign G3 in August 2010 for its class II and class III patients. We believe that the Chinese launch of Invisalign should further spur revenues ahead.
We are currently Neutral on the stock.
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