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  "documentTitle": "Align Technology, Inc. (ALGN)",
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  "authorName": "Ben Axler",
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  "presentationDate": "2020-04-09 00:00:00",
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      "text": "The reality: the economics of clear aligners are on the precipice of a radical shift – and it has little to do with SmileDirectClub or other direct-to-consumer players.",
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      "text": "Emergent Competition Already Putting Pressure On Align: Though still relatively novel, Spruce Point observes that these competitive forces are already beginning to pressure industry pricing and threaten Align’s case volume. Our diligence reveals that a large dental service organization (DSO) representing up to 12% of Align’s US aligner volume is actively exploring opportunities to source aligners from third-party labs. Meanwhile, we are told that 3M is offering orthodontists lab fees as low as $500-$600 per case – less than one third the price of a comprehensive Invisalign case.",
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      "text": "Third-Party Labs Turning Aligners Into Commodities: For close to 20 years, Align operated as the lone major player in the clear aligner space... Spruce Point has obtained term sheets... dental practitioners can save over 50% per case... major dental players are already slashing prices to as low as 33% of Align’s.",
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      "text": "Under-The-Radar Improvements In Workflow Technology Make In-House 3D Printing A Threat: Until now, Align bulls have generally considered in-house 3D printing an inconvenient alternative... we find that broader adoption of in-house printing has been constrained NOT by limited demand, but by the relatively limited supply of quality technological infrastructure... uLab Technologies... is in the process of rolling out CAD/CAM software.",
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      "text": "share price: $80-$115",
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      "text": "The reality: the economics of clear aligners are on the precipice of a radical shift – and it has little to do with SmileDirectClub or other direct-to-consumer players. Once considered high-value-added \"dental tech,\" FDA-approved aligners of similar quality to Invisalign – Align’s clear aligner product – are now being printed at scale by commodity 3D printing labs, which price their aligners at less than half the cost of Align’s. Meanwhile, patent expirations have ushered in under-the-radar developments in aligner design software which are removing the final barriers to the widespread adoption of 3D printers by orthodontists – many of whom are infuriated with Align’s aggressive tactics, and who are actively exploring their options in a market which, for the first time, offers numerous (cheaper) alternatives to Align. On-the-ground diligence reveals that large dental players are already slashing aligner prices in response to these shifts, in some cases to as low as a third the price of Invisalign. We believe that it is only a matter of time – perhaps accelerated by industry cost pressures brought on by the pandemic – until Align is forced to follow suit.",
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      "text": "By now, investors in Align Technology, Inc. (\"ALGN\" or \"the Company\") are used to hearing that competitors are, for the first time, beginning to penetrate the clear aligner space. The bullish consensus: dental equipment competitors can coexist with Align, but cannot yet compete toe-to-toe with the 20-year incumbent.",
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      "text": "Short ALGN: Spruce Point Sees 40%-55% Downside To $80-$115 Per Share",
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