Align Introduces Invisalign G4

Recently, Align Technology, Inc. (ALGN - Analyst Report) introduced its next-generation SmartForce clinical innovation, Invisalign G4. This new generation Invisalign system is expected to provide the much-needed solution to some significant treatment challenges faced by the doctors.

With improved SmartForce features like Optimized Attachments and the Power Ridge, Invisalign G4 will help enhance open bite treatments, more predictable movement of upper laterals and improved root control for canines and central incisors.

Banking on its core product, Invisalign, Align has established itself as a strong player in the global dental market. The Invisalign system significantly reduces the limitations of conventional orthodontic treatment (braces) with respect to aesthetic issues and oral hygiene.

Aligners are clear-plastic appliances that are nearly invisible when worn and unlike braces, they can be removed while brushing. Moreover, since the Aligners are replaced in two-week cycles, they are less strenuous and painful on the teeth. The advantages associated with the use of Aligners should hdrive patient acceptance and usage.

In recent times, Align has undertaken several strategies to improve adoption of Invisalign. These include acceleration of product and technology development, extension of clinical effectiveness, expansion of Invisalign brand and driving international growth, among others.

The company witnessed higher sales over the past few quarters based on the strength of Invisalign brand. Moreover, Align has been introducing advanced products in its portfolio to cater to a wider patient base. Invisalign G3, the company’s another next-generation product is working successfully for its class II and class III patients.

During the second quarter of fiscal 2011, Align successfully launched Invisalign G3 in international markets including Europe, Asia Pacific, China, and Japan. The company believes that the new features and functionality of Invisalign G3 are even more effective outside North America, especially in Asia, due to the higher complexity of cases among the Asian population.

Over the long-term, we expect Invisalign G3 and the new G4 as well as other innovations to act as a major catalyst to sustain the continued growth momentum of Align in new as well as existing markets. Considering the advantages of Invisalign and the strong untapped potential of the malocclusion market, we are optimistic about the growth prospects of the stock. Align currently retains a Zacks #2 Rank (short-term Buy rating).

However, we remain apprehensive based on the economic uncertainty as it makes patient defer dental procedures, being elective in nature. Widespread austerity measures in both public and private sectors led to a softer performance in the UK. Although Align has experienced an upside in patient traffic since the second half of the fourth quarter, any hiccup in the recovery process will have a negative impact on the top line. As a result we remain “Neutral’ on Align over the long-term, which is in agreement with a short-term Zacks #3 Rank (Hold). With respect to competition, Align ranks at par with its peer Danaher Corporation (DHR - Analyst Report).

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