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Align Technology said that pent-up demand increased clear aligner cases in the third quarter, but admitted that it was difficult to quantify how much of this demand still remained. (Image: Alex Mit/Shutterstock)

Pent-up demand helps Align Technology top pre-COVID-19 sales

By Jeremy Booth, Dental Tribune International
November 06, 2020

SAN JOSE, Calif., U.S.: Half a million cases of clear aligners sounds like a considerable number—and indeed it is. It appeared that Align Technology had shrugged off the impact of the SARS-CoV-2 pandemic when the company revealed that Invisalign sales for the third quarter had nearly eclipsed the half-million mark. This was a substantial increase on the comparable pre-COVID-19 quarter last year. According to President and CEO Joseph M. Hogan, the increase was driven by pent-up demand for orthodontic care and by the availability of unused disposable income.

Dental Tribune International (DTI) reported in February that 2019 had been a year of new records for Align. The company had sent a robust 1.5 million Invisalign cases to its customers during the 12-month period, which ended on the same day that a cluster of cases of pneumonia in Hubei province in China was reported to health authorities.

In the third quarter, Align sold clear aligners to its 1 millionth patient in the Asia Pacific region—a 23-year-old aspiring Olympic athlete from Japan. (Image: tigristiara/Shutterstock)

This year has already resulted in more new records for the company. At 222,000, Invisalign case shipments for the second quarter plunged by a record 41% compared with the same period last year before rebounding considerably in the third quarter to reach 496,100—a 123.6% sequential increase and a gain of 28.7% when compared with the third quarter of last year. It is worth noting that COVID-19 had not been heard of when the Californian company posted its third quarter results in 2019.

Since the outbreak of the pandemic, Align has focused on helping general dentists and orthodontists return to work in a safe and profitable way. Historically, the company has increased the prices of Invisalign cases by around $50 in the third quarter of each year. It did not do that this year. The company encouraged dentists to swap fixed appliances for Invisalign retainers in existing patients and offered a buyback of the wires and brackets and existing inventory. The company also aimed to help dentists to reduce practice visits by transitioning from analog to digital orthodontic workflows. It launched the My Invisalign app in more than 40 countries and announced the proprietary ClinCheck Pro 6.0, the next-generation treatment planning software. Hogan noted in a webcast conference call that Invisalign cases submitted with a digital scanner during the three-month period increased to 83% from 79% in the Americas region and to 72% from 63% in international markets. In North America, 95% of all clear aligner cases submitted by orthodontists were based on digital scans.

During the quarter, Invisalign shipments increased by 25% year over year in the Americas region, and international shipments increased by 34% year over year, driven by strong performance in the Europe, Middle East and Africa and Asia Pacific regions. At 162,700, cases for teenage patients increased by more than 25% year over year and the company’s revenue from imaging systems and CAD/CAM services was up by 24.5%.

“In our new normal there are far fewer trips abroad, fewer flights, less money spent on gas”
– Joseph M. Hogan, CEO, Align technology

Hogan said that several factors had helped to boost the company’s results. He explained: “Across the business, we believe there are several factors contributing to our strong performance, starting with pent-up demand. Many of our doctors indicate that they are making good progress in working through the backlog of patients from office shutdowns. Pent-up disposable income remains a key factor as consumers focus on feel-good investments, while many other quality of life options are unavailable.”

In our new normal,” he added, “there are far fewer trips abroad, fewer flights, less money spent on gas, dry cleaning, etc. More people can afford to allocate that spending to Invisalign treatment, especially when they’re working remotely and critiquing themselves on camera so much of the time. That’s the Zoom effect we’ve heard about across multiple sectors.”

Hogan was pressed by analysts on how much pent-up demand still remained, but he emphasized that this was difficult to quantify across the company’s global markets.

The company did not provide guidance for the fourth quarter. “We are confident in the huge market opportunity, our industry leadership and our ability to execute. At the same time, there continues to be uncertainty around the pandemic and global environment. Therefore, we aren’t providing specific guidance,” commented John F. Morici, chief financial officer and senior vice president of global finance at the company.

Baird analysts said in a mid-October preview of third quarter results for dental companies that clear aligners remain well positioned in a post-pandemic dental market.

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