Align Technology's Management Presents At Morgan Stanley Healthcare Conference - Transcript

Align Technology, Inc (ALGN)

Align Technology at Morgan Stanley Healthcare Conference

September 11, 2012 08:00 AM ET

Executives

Kenneth Arola - Vice President, Finance and Chief Financial Officer

Analysts

Steve Beuchaw - Morgan Stanley

Presentation

Steve Beuchaw - Morgan Stanley

Good morning everyone. Thank you for joining us. I am Steve Beuchaw from the Morgan Stanley Medtech team. It is my pleasure to have you all here and to introduce Align Technology. We have Ken Arola, CFO of the company.

Before we begin though, please do note that all important disclosures including all personal holdings disclosures and Morgan Stanley disclosures, appear on the Morgan Stanley public website at morganstanley.com/researchdisclosures. It’s a riveting read. So Ken, I would like to open the floor to you for any opening remarks.

Kenneth Arola

Sure. I just like to thank everybody for being this morning at Morgan Stanley Conference, just a little bit of Align Technology for those of you who don’t know. We have been in business for about 12 to 13 years as a public company. We’ve helped about 2 million patients get treatment and generated over about $2 billion in revenue over that time period along the way was delivering about 75 to 80 million individual class II medical devices which we call aligners.

Our strategy for the company really focuses around four key areas. One of them being clinical innovation giving doctors what they want to treat the patient effectively and get the results that they are looking for and I am sure we’ll get some questions on that at this morning. The other one is the driving consumer demand and educating patients so they can walk into doctor’s offices understanding the capabilities of what Align – Invisalign can do for them and should basically challenge a doctor if that something they want as a formal treatment.

The third one is on customer experience making sure that we are doing business as effectively can with the doctors making it easier for them to do their ClinCheck approvals, to get their cases going etc., and the fourth lever that we are pushing on for the Invisalign business is really around the international expansion of business in core Europe as well as in China. We opened up some offices about a year ago, in four major cities over there and then about a year ago we acquired a company called Cadent Inc. They provide scanners to the market place and are strategic to look at the Cadent business was to increase the placement of scanners in the market place over time and at the same time driving Invisalign revenues up of those scanners as doctors can submit cases directly to us versus taking impression. So, with that I’ll stop and turn it over to you Steve.

Steve Beuchaw - Morgan Stanley

Thanks Ken. So, Align is interesting in a number of ways. One of them is that the company has been growing very fast now since let’s call it early part of 2010, most businesses go through ebbs and flows and we’ve seen some companies that grew very fast in 2011, slow a little bit with the macro pressure this year and Align is frankly just powering right through it. What is your secret? What are you doing differently? What are you doing differently than what you did in 2009 when even a very fast growing Align saw a little bit of pressure from the economy.

Kenneth Arola

Sure. So, I think back to 2008 actually was a year we came out with some products to address areas of the market where we were not effectively competing in and one of them was the Teen product, we came out with in the middle of 2008 and then towards the end of the year we came out with the a product called Assist, which is really to help newly trained doctors get comfortable with Invisalign.

In 2009, with the economy we thought we are going to be down pretty significantly in our business. We had about a 3% growth in 2009, difference between then and now is really the fact that we have a lot of new technology in the product like I said Teen and the Assist product and over the past couple of years we’ve also added additional technologies and features into the product. Features that we called Invisalign 1.5[ph] back in 2009, then in 2010 we followed up with what we called G3 and in G4 in 2011 and those are the features that are across all of our products whether it is full Teen Assist etc. giving doctors better control to get their results that they want whether it is (inaudible) procedures, optimize attachments, precision cuts in the aligners.

So, what is more effectively allowing doctors to get the outcome that they want as they report back to us. They were very pleased with the results that we are getting in the practice, they’ve actually reported that. They are more confident now and when they look at the ClinCheck, they are going to get the results at the end of the case that they were expecting to get and they are more likely to recommend Invisalign. So, contrast that back to 2009 coming into 2009, Orthos and GPs both kind of hunker down, the Orthos themselves never really had to sell as much as they have to pay and when patients were walking into the office asking for Invisalign. They were more hesitant when GPs, they didn’t want to push Invisalign back in early 2009 time frame and now it is because of her $5000 procedure, they got the whole family in their practice and in our reality they did not want to practice to walkway because they got upset that the doctor is trying to push him on a $5000 procedure. So, couple of different things in the marketplace probably the biggest driver though is technology that we are adding to the products over the past several years.

Read the rest of this transcript for free on seekingalpha.com

If you liked this article you might like

Cramer: Hunting for Bargains

Cramer: Hunting for Bargains

Emerson Electric, S&P Global, Ball Corp.: 'Mad Money' Lightning Round

Emerson Electric, S&P Global, Ball Corp.: 'Mad Money' Lightning Round

Don't Fall for the Downward Bias: Cramer's 'Mad Money' Recap (Thursday, 2/1/18)

Don't Fall for the Downward Bias: Cramer's 'Mad Money' Recap (Thursday, 2/1/18)

7 Investment Themes You Can't Afford to Miss for 2018

7 Investment Themes You Can't Afford to Miss for 2018

Feed the Beast: Cramer's 'Mad Money' Recap (Thursday 1/4/18)

Feed the Beast: Cramer's 'Mad Money' Recap (Thursday 1/4/18)