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New
York Times
FRIDAY, AUGUST 18, 2000
Business Day
Orthodontics Via
Silicon Valley
A Start-Up Uses Computer Modeling
And Venture Capital to Reach Patients
By Barnaby J. Feder
The business of
straightening teeth has always been a small-scale, fairly low-tech affair -- a
one-on-one interaction between orthodontist and patient, usually an adolescent.
Colored “designer” bands and clear ceramic brackets held
in place by a wire may have supplanted the tortured metal-mouth look, but this
has been a world of incremental change mostly beyond the reach of computers,
Wall Street and the other trappings of the new economy. Until now it seems a
stretch that at a Classic Silicon Valley start-up could create a role for
itself in this highly local profession, but that is exactly what seems to be
happening with Align Technology, a manufacturer of a clear-plastic alternative
to braces aimed at appearance-conscious adults.
Zia Chishti and Kelsey Wirth, the young co-founders of Align, which is
based in Sunnyvale, Calif., drew the attention of many orthodontists with their
claim that computers could be used to design and make a customized series of
plastic retainers for each patient that would gradually move their teeth as
prescribed by the orthodontist
“Believe me, this is the last thing I ever thought I’d do,” said
Ms. Wirth, Align’s 30-year-old president, recalling how she hated her braces
in high school. But, she said, Mr. Chishti’s vision of the technology seemed
to fit her search for an opportunity to “build a company and revolutionize an
industry.”
Unlike braces advertised as invisible but held in place by a wire,
Align’s product is transparent. Instead of visiting the orthodontist to have
braces adjusted, patients would simply switch to the next retainer in the series
every two weeks.
Align
claims that roughly half the nation’s 8,500 orthodontists have attended a
seminar and invested in the
equipment
necessary to offer to product, an astonishingly rapid technology deployment for
such a conservative industry.
Now, armed with
promising early results and backed by venture capital on a scale that has
stunned the industry, Align is
unrolling the most aggressive consumer advertising plan the dental profession
has ever seen en “It has to be 10 times
more than anyone else has ever
done,” said Charles Schultz, general manager of GAC International, a leading
supplier
of braces and other orthodontic
supplies.
The Align system, marketed under the Invisalign brand, is already
inspiring competitors for instance,
GAC
recently began offering an all-plastic device designed by Dr. Keith Hilliard a
Florida orthodontist. That device,
formed in the orthodontist’s office by drawing a vacuum seal over a model of
the mouth, can be adjusted by the
orthodontist to push teeth in a desired direction using pliers.
Align’s ambitious plans are based on research gathered by the American
Association of Orthodontists concluding that
although fewer than 1 percent of
American adults have severe orthodontic problems, more than I 00 million adults
with lesser
dental irregularities are potential candidates for orthodontics. Only 400,000,
or one-half of one percent of adults, get braces each year, so Align believes
there is a huge untapped market. “Some people don’t care about their
appearance, and others do but can’t tolerate the burdens of correcting it “
said Mr. Christi, Alien’s 29-year-old chief executive. “We are going to
attack both groups with marketing, and it will be a huge
market h-expansion opportunity for everyone”
Competitors in the $450 million orthodontics supply industry are hoping
so. They are eagerly awaiting the biggest step yet
in Align’s marketing program — a $31 million campaign starting in September
that will be the first effort by an
orthodontics products company to
appeal directly to consumers through television.
The expectation is that many consumers responding to the ads will instead
end up persuaded to try more
standard treatments. Some will
discover that they have more severe problems than Align is willing to tackle,
and others are
likely to balk at the 50 percent premium over braces that many orthodontists
charge for Invisalign
Invisalign starts with an orthodontist making an imprint of the
patient’s teeth in a plastic material that is sent to Align
along with the orthodontist’s
prescription of how the teeth should be moved to attain a desired final
appearance.
Patients
with severe overbites, underbites and other serious problems are excluded, as
are all children because growing
jaws and erupting teeth are too complicated for Align’s computer to model. But
if the adult’s deformities are mild enough to
fall within Align’s specification, Align
develops an animated computer program — a process that takes three weeks to a
month
and is handled by computer technicians in Pakistan —that can be downloaded
over the Internet and will show how the teeth
will move.
Once the treatment plan depicted by the animation is approved by the
patient’s orthodontist, the specifications are transmitted
to Align’s manufacturing plant in Mexico. The patient gets the first aligner
six weeks after the initial visit. Most treatments require
20 to 60 aligners which are worn approximately two weeks each. If the patient is
following directions, they are taken off only for
eating and tooth-brushing.
Orthodontists have mixed feelings about Align. Jennifer Salzer whose
practice is on Park Avenue in New York, is in
the fifth month of wearing the aligners She and her partners have more than 40
patients using them. “People who don’t get
involved are going to be left behind,” she told 135 orthodontists and
assistants who attended a one-day course Align offered in
New York recently.
The’
New York audience included plenty of skeptics who said that Invisalign would
make sense for only a small percentage
of their patients, many of whom might fare just as well with a retainer, which
is far cheaper. A treatment that might cost
several thousand dollars with Invisalign might be done for several hundred
dollars with a retainer, they say. Others said
that treatment with the aligners, like all removable dental appliances, is prone
to failure if patients do not wear them
around the clock.
Align asserts that orthodontists using Invisalign have increased profits
on the order of 30 percent because, without
the need to adjust braces, they need less “chair time” for each patient. But
some said that orthodontists who work mostly
with children could find productivity going down if Invisalign brings in more
adults, because adults always take up more
time with questions than children.
Whatever
their doubts, orthodontists who delay preparing to offer lnvisalign risk being
viewed as behind the times once the television advertising campaign takes off,
said Dr. George W. Scott, an orthodontist in Middletown, N.J., and former
president of the New Jersey Orthodontists Association. “I’m here only
because I’m afraid,” he said with a laugh at the end of the New York
meeting.
Many other orthodontists say their biggest fear is that Align’s drive
to grow will eventually lead it to offer its system through general dentists,
thus eating into their practices.
Ms. Wirth
said that Invisalign does nothing to simplify orthodontics and that the company
could not rely on dentists to use it appropriately.
New technology has traditionally crept slowly into the market, with
practitioners developing devices they eventually sold to companies like GAC
International; the Ormco subsidiary of Sybron; or 3M Unitek, a subsidiary of
Minnesota Mining and Manufacturing. Some misunderstandings and suspicion seem
inevitable given that Mr. Chishti and Ms. Wirth come out of the hothouse of
Silicon Valley with no background in dentistry.
The two entrepreneurs met as classmates at the Stanford University
Graduate School of Business. Mr. Chishti, a native of Pakistan who had been a
consultant at McKinsey & Company and a financial analyst at Morgan Stanley
became intrigued at how his teeth, which had been straightened by braces, would
drift out of position when he neglected to wear his plastic retainer and how the
retainer moved them back to the proper place. It did not take much research to
learn that orthodontists had been talking as far back as 1945 about the
possibility of using a sequence of removable plastic appliances instead of
braces to move teeth toward a predetermined end point. Many had used simple
plastic devices fashioned in their offices for minor adjustments.
But
no one could figure out how to make wider use of plastic aligners practical
until Mr. Chishti and Ms. Wirth a former environmental consultant and investment
banker, set up Align in 1997 to apply computers to the problem. Not only could
computers be used to design the sequence of aligners, they realized, but stereo
lithography, a computer driven process widely used by design engineers in
industry for building plastic models layer by layers, could be the key to
inexpensive automated production.
The
first venture capitalists they approached did not share the vision. Some laughed
at the idea of putting money into unfashionable orthodontic supplies, Ms. Wirth
recalled. The industry leaders were equally unimpressed. GAC declined to invest
because Align could not show them any results with patients.
But after Joseph S Lacob a general partner at Silicon Valley’s most
famous venture capital firm, Kleiner Perkins Caufield & Byers became
enthusiastic in 1997 just 15 minutes into Mr. Chishti’s presentation, doors
began to swing open.
The company recently collected $100 million from institutions and wealthy
individuals in its fourth round of financing. It was managed by Robertson
Stephens, the San Francisco-based investment bank where Ms. Wirth worked before
heading for Stanford.
The company had offers for an additional $100 million to $200 million
that it turned away, Ms. Wirth said. The next step is likely to be a public
offering, possibly before the end of the year. Some orthodontists, like Dr
Michael Steinberg, of Millburn, N.J. say such a step would be encouraging
because they want to be sure the company has the resources to stay in business
if they are going to start many of their patients on treatments that can easily
last more than a year.
Mr. Chishti
is certainly prepared for a road show. He likes to drive home the point that the
devices are next to invisible by nonchalantly popping out his current aligner,
which invariably has gone unnoticed until that moment.
“It gets a good reaction,” he said.
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