SmileDirectClub (SDC) - Get Report had investors beaming Tuesday after the provider of teeth straightening products announced plans to enter the wholesale market and sell its products directly to dentists and orthodontists.
Shares of SmileDirectClub shot up 16.76% to $11.91 a share following the company's announcement of its entry into the wholesale market, its supply agreement with Align Technology (ALGN) - Get Report having expired Dec. 31.
The move will expand SmileDirectClub's customer base for its clear teeth aligners, with the dental product company until now in charge only of direct-to-consumer sales. The decision to dive into the wholesale market will also thrust SmileDirectClub into direct competition with its former business partner Align Technology, which sued SmileDirectClub in 2015 for patent infringement, only to later become an investor in the company.
Align is no longer an investor in SmileDirectClub, according to Bloomberg.
Align Technology fell 2.39% to $290.95 in trading Tuesday.
SmileDirectClub, which went public in September and saw its stock price falter over the fall, said it was seeing rising demand from orthodontists and dentists who want to provide the company's clear teeth aligners to their patients.
Only 30% of the 200,000 dentists and orthodontists in the United States currently offer clear-aligner therapy to their patients, the company said.
"With our agreement with Align Technology now expired, we are no longer obligated to stay in the direct-to-consumer channel," said Alex Fenkell, co-founder of the SmileDirectClub, in a press statement. "We are excited to expand our offering and welcome new providers to add an important and needed offering to their suite of services."