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Align Technology Raises $130M in IPO

January 26, 2001 GMT

SAN FRANCISCO (AP) _ New-age orthodontic company Align Technology Inc. made its stock market debut Friday with a discounted initial public offering that reflects the hard bargains being made by more demanding investors.

Align sold 10 million shares at $13 apiece _ raising $130 million _ down from the $14 to $16 range originally targeted. The Santa Clara-based company uses computers to design a more cosmetically appealing way to straighten crooked teeth.

The company had hoped to raise as much as $200 million when it filed its IPO plans in November.


Shares of Align were trading at $17.19 in late trading Friday on the Nasdaq Stock Market after moving as high as $18.25.

The slowing economy and investor uncertainty raised by the stock market’s recent volatility is forcing unprofitable companies to make concessions to get their stocks launched, said Jeff Hirschkorn, an analyst with IPO Monitor.

``The (IPO) underwriters are feeling the heat. They know they have to lower the price to move a stock or it won’t make it to market.″

Both IPOs made so far this year have dropped their offering prices. On Thursday, Peet’s Coffee and Tea accepted $8 per share for an IPO that raised $26 million. Initially, the specialty coffee retailer had hoped to sell its 3.3 million shares at between $10 and $14 a share.

``These companies are taking what they get now and hoping that they can return to investors with a secondary stock offering later,″ Hirschkorn said.

Before its IPO, Align raised $137 million in venture capital to finance a patented treatment called ``Invisalign.″ The treatment uses clear, retainer-like plastic molds to straighten teeth. A patient typically will wear more than 20 different removable aligners for two- to three-week periods.

The technique, which relies on computers to design the molds, has been spotlighted for the past four months in national ads that depict Invisalign as a more cosmetically appealing way to straighten teeth.

Just under 10,000 patients had been treated with the Invisalign treatment as of November. About 5,300 orthodontists have been trained in the Invisalign method so far and another 1,000 doctors began classes this month, Align said.

The company is still a long way from making a profit. In the nine months ending Sept. 30, Align lost $53.3 million on revenues of $3.5 million.


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