Align Technology (ALGN - Get Report) shares sank 5.8% to $287.91 Monday after announcing that talks had ended between the medical device company and the Straumann Group over a possible development and distribution agreement.
The potential agreement had been discussed in connection with the patent settlement agreement announced by the two companies in March.
The San Jose, Calif.-based company said that as part of the settlement, Straumann will pay Align an additional $16 million in lieu of the agreement. The Basel, Switzerland-based Straumann said in a statement that it expects a one-time exceptional expense of roughly $24 million in its first-half results.
The settlement ended outstanding patent disputes in the U.S., the United Kingdom and Brazil, including those involving ClearCorrect, a subsidiary of Straumann, Align Technology said.
As part of this settlement, Align and Straumann signed a non-binding letter of intent for a 5-year global development and distribution deal in which Straumann distributes 5,000 iTero Element scanners to be fully integrated into the Straumann/Dental Wings CARES/DWOS workflow.
Additionally, the parties considered exploring the possibility of offering existing iTero users access to Straumann's prosthetic and surgical planning workflows.
Straumann said it "will continue to build on its current intraoral scanning capabilities."
In April, Align Technology reported first-quarter net income of $71.8 million, or 89 cents a share, beating Wall Street's expectations of 83 cents a share. The company posted revenue of $549 million, beating analyst expectations of $530.2 million.