Could there be an opening for 3D Systems to regain the aligner business?
Let’s back up a bit. 3D Systems is one of the largest and oldest companies in the 3D print space, having invented the original SLA process back in the 1980s. Since then they have grown substantially and developed a number of other machines and processes.
Their technology was ideal for producing dental aligners, and that became a big chunk of their business. That’s because dental aligners are personalized and must be individually made for each patient. 3D printing allowed them to be mass produced.
One of 3D Systems’ biggest customers in this area is Align, which now has around 15M worldwide customers. Their key product is the invisalign clear aligner systems. And it’s produced with 3D Systems equipment and materials.
But then recently Align announced they’ve acquired Cubicure, a European startup that produces specialized 3D printer resins. While nothing has been stated, it is suspected that Align just might migrate some of their business from 3D Systems towards their new acquisition, Cubicure.
If so, that could put a noticeable dent in 3D Systems’ revenue and evidently investors noticed this possibility. 3D Systems’ stock price has dropped quite a bit in recent weeks, partly because of this move by Align.
What is 3D Systems to do? I’m sure they’re working with Align to clarify their relationship, but it’s also possible for other moves to take place.
One was recently suggested by 3D print aficionado Tuan Tranpham, who wrote on LinkedIn:
“Dental company SmileDirectClub has uncertain future after bankruptcy filing 🦷 since Align acquired Cubicure for €79M, maybe $DDD 3D Systems should acquire $SDC this week ;o)”
While Tranpham might be kidding, could this be a real possibility?
I’m thinking “no”. While SmileDirectClub would certainly be technically able to make use of 3D Systems equipment and materials (and perhaps even do already), it’s more than just technical feasibility. There has to be an actual, true business case for this to work.
If SmileDirectClub failed on their own, what could 3D Systems do differently?
After reading several posts, it seems that the root cause of SmileDirectClub’s failure has to do with the cost of acquiring customers. Their business model is quite different than Align’s which goes through dentists; SmileDirectClub has customers order directly.
But in order for that to happen, customers have to be aware of SmileDirectClub, and that means substantial advertising and promotional expenses. This apparently was too much for the company to survive.
Could 3D Systems do something different? I’m not sure. 3D System does not operate a large network of dentists, so they can’t help that way. They would have to get very deeply involved in the dental industry in order to make “SDC” work, but I can’t see them doing that. It is far too distant from their normal operating space.
My thought is that SDC is likely to fail, and 3D Systems will not attempt to acquire their business. That leaves 3D Systems in the same pickle they’re already in, except that it might be worse if it turns out that SDC used 3D Systems equipment and materials.
Via LinkedIn
