Align Technology

Align Technology produces Invisalign clear aligners, iTero Intraoral scanners, and OrthoCAD digital services for dental professionals to deliver dental options to their patients.

Align Technology was founded by Stanford MBA students Zia Chishti and Kelsey Wirth. Chishti had a degree in economics and computer science and Wirth had a degree in literature and American History. The initial tooth aligners were not as effective as metal braces. Align Technology began to turn an annual profit in 2004 when it reduced marketing to consumers and increased marketing to orthodontists and dentists. A change from global expansion to focusing on North America lead to more clinical research which improved the efficacy of the product.

After the US, China, where it has a factory, is the next largest market for Align Technology teeth-straightening products. The company expects Japan to become one of its top five markets by 2023.

Align began to turn an annual profit in 2004, a turnaround led by CEO Tom Prescott who joined in 2002. Prescott cut marketing to consumers and focused on marketing to orthodontists and dentists, as well as emphasizing growth in North America over global expansion.

Co-Founder Chishti left the company in 2004 and started a competitor called OrthoClear. OrthoCear was shut down when Align bought OrthoClear’s IP for $20 million in 2006. Align Technology releases about one new Invisalign product per year. Align had a lawsuit against Smile Direct Club, which is dropped and signed a deal to supply the company with a portion of their aligners for a 17% stake in the company and a board seat.

Align Technology was estimated in 2017 to have 80 percent of the North America clear aligner orthodontics market. In 2017 Invisalign was reported to be offered by more than 50,000 orthodontists and dentists and reached its 4 millionth patient in September of 2016 and sales hit $1 billion that year. Align Technology had a monopoly on clear braces and the technology to digitally map and build the multiple aligners which make up the treatment.

Beginning in October 2017 Align’s patents began to expire and 23 are expected to expire per year until about 2028. Invisalign lost exclusivity on 40 patents in October 2017. Loss of exclusivity plus more sophisticated 3D printing is allowing for more competition in the clear aligner space. In 2018 clear aligners were the largest and fastest-growing global invisible orthodontics market category. At this time Invisalign captured 80 percent of this category, competing with products from companies such as 3M Co. and ClearCorrect. Align was among the best performers in the 2017 S&P 500 Index.

Align has increased its spending on research and development nearly 240 percent since 2009 and the company releases about one new Invisalign product per year. Align Technology initially had pending litigation against SmileDirectClub (SDC) for patent infringement. SDC had a business model whereby customers register online and submit putty impression of their teeth from home, with orthodontists reviewing remotely. Align Technology dropped their lawsuit and made a deal with SDC to supply them with a portion of aligners it ships to customers, have a 17% stake in the company and a seat on the board.

Align entered the China market in 2011. In 2017, Align Technology opened a software facility in mainland China in Chengdu which will help orthodontist design treatments and reduce waiting times. The facility has locally hired technicians and Chinese language software. The Asia-Pacific market was the fastest growing region from about 2014 until 2016.

In November 2017, Align opened its first Invisalign store in San Francisco. It was announced in 2019 that it would close 12 Invisalign stores due to a decision by an arbitrator that it breached noncompete provisions that apply to SDC Financial LLC. In a March 5, 2019 press release, Align Technology stated that the supply agreement with SDC will continue.