Big Boost for Align Technology

The company's stock surges after it signs a deal to settle a lawsuit.
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Align Technology

(ALGN) - Get Report

, the inventor of the Invisalign method of straightening teeth, signed a preliminary deal to settle its litigation with OrthoClear.

Shares of Align were surging on the news. In premarket trading, the stock was up $2.89, or 37%, to $10.69.

Effective immediately, OrthoClear will no longer accept new patients for treatment with its dental appliances. Also as part of the agreement, Align will make a one-time cash payment of $10 million to OrthoClear.

Among other terms of the arrangement, OrthoClear will no longer import its dental aligner products into the U.S.. Additionally, certain OrthoClear employees, including Zia Chishti, its CEO, and Charlie Wen, its president, will sign noncompete pacts.

"This resolution achieves all of Align's litigation objectives and allows us to fully focus the company's energies and resources on providing innovative products and excellent service to Invisalign customers," Thomas Prescott, Align's president and CEO, said in a statement Thursday. "We are particularly committed to helping OrthoClear patients and their doctors minimize disruptions in their treatment by getting started with Invisalign."