Align Technology (ALGN) – California Check-Up
Back on March 6th in our morning Conversations podcast delivered to Pro clients, dental stocks were discussed, specifically Align Technology (ALGN) and Dentsply Sirona (XRAY). (Click HERE for Subscription Options).
Today’s Home Page write-up will be a continuation of that topic but will be focused solely on shares of Align.
Stifel analyst Jonathan Block recently held a podcast with a high-volume Invisalign practice out in California, led by Dr. Brodsky of Brodsky Orthodontics. At the time of Stifel’s last meetings in December, Dr. Brodsky said he had expected his 2023 clear aligner volume to be flat to -5% relative to his approximately 600 case starts in 2022. However, Dr. Brodsky has since positively revised his 2023 outlook, and now expects clear aligner case starts at his practice to be flat to up Y/Y, noting that the volume of new patients, specifically Adults, has spiked since the start of the year. “Interestingly, Dr. Brodsky has observed increased insurance coverage in 2023, which he believes may be playing a role in the higher case volume.”
In terms of starting cases, he noted that he finished December with 41 case starts, before a “robust” January in which the practice started 66 clear aligner cases. Despite being closed for one week in February, he started 44 Invisalign cases for the month, and expects to start a total of 60 Invisalign cases for the full month in March. “When we asked if there was a specific strategy leading to the increased case start volume, the doctor simply credited increased patient traffic, noting that booked Invisalign consults at his practice are at levels he had not seen for the past 9 or more months.”
Speaking of Invisalign, it should be noted that for Q1-to-date, worldwide Google Trends data look rather encouraging, up 9% Q/Q while U.S. trends are also solid, showing +13% Q/Q and +3% Y/Y.
Subscriptions – Brodsky Orthodontics was apparently an early enrollee of Align’s Doctor Subscription Program, or DSP, starting at the lowest tier of 100 monthly trays or retainers. Stifel learned that back in December, this practice moved up a tier to 150 monthly trays/retainers, and now has climbed tiers again to 200 trays/retainers per month. “His practice went from in-house retainers to solely outsourcing to Align (allowing him to eliminate some overhead), and Dr. Brodsky spoke highly of the quality of Vivera retainers.” Lastly, Dr. Brodsky stated that within DSP there is a patient subscription program which would include the option of direct shipping retainers/trays to the patient as opposed to having him or her come into the office. “He has heard this would be implemented in 3Q of this year and would be very receptive of this optionality.”
Innovation – The practice had positive feedback on Invisalign First, noting how they are able to do more for the patient in phase 1 with the product compared to traditional methods. Next, Align recently launched its next-gen mandibular advancement clear aligner, which most offers “enhanced precision wings.” Dr. Brodsky has done a number of next-gen cases and while he isn’t far along enough with any of these patients, he stated that everything else is looking good so far. Lastly, Align has recently released a number of innovative solutions focused on software, treatment planning, and the digital workflow. Dr. Brodsky was one of the first physicians to utilize Align’s Invisalign Personalized Plan (IPP), which automatically applies a doctor’s specific treatment preferences to enhance efficiency and treatment planning consistency. “His feedback was positive (rated efficiency improvements as a 9 out of 10), and although the setup took some time for his practice, he believes it is a lot more streamlined now.”