A Medical Device Daily

Law Offices of Howard G. Smith (Bensalem, Pennsylvania) representing investors of Align Technology (Santa Clara, California) reported filing a class action lawsuit on behalf of a class consisting of all persons or entities who purchased the common stock of Align between January 30, 2007 and October 24, 2007, inclusive.

The class action lawsuit was filed in the U.S. District Court for the Northern District of California.

Earlier last week, Shalov Stone Bonner & Rocco (New York) reported filing a similar lawsuit against the company (Medical Device Daily, August 20, 2009). The complaint charges the company and its chief executive officer with violations of federal securities laws. Align Technology markets the Invisalign system for treating the misalignment of teeth.

The complaint alleges that throughout the class period the defendants knew or recklessly disregarded and failed to disclose or indicate that the company had shifted the focus of its sales force to clearing backlog, causing a significant decrease in the number of new case starts. Consequently, defendants' misleading statements and omission of materially adverse information rendered their class period statements concerning the company's business, operations and financial prospects materially false and misleading at all relevant times.

On October 24, 2007, Align held a conference call with analysts to discuss the company's 3Q07 financial results reported that same day.

During the conference call, the company shocked the market when it acknowledged, among other things, that in an effort to clear prior backlog "we did not focus enough effort on filling the pipeline for new case starts," and the company had to refocus its field and channel marketing teams to generate new case growth.