Medtronic announced this week the intention to purchase Mazor Robotics, the Israeli manufacturer of the up-and-coming robotic assisted surgical system Mazor X and the Renaissance Guidance System. Medtronic is expected to spend a total of $1.64 billion to bring Mazor X fully into the fold.
Designed for spine surgeries, the Mazor X made its proper debut a little more than two years ago and then launched commercially a few months later at the annual meeting of the North American Spine Society (NASS). Medtronic was an early and enthusiastic investor in Mazor Robotics, plugging $20 million into the company in July 2016 and issuing a purchase order for 15 systems at the point Mazor X officially hit the market.
(Image credit: Mazor Robotics)
Medtronic continued to invest in Mazor Robotics and eventually set an agreement to serve as the sole distributor for Mazor X systems and associated tools. Positioning the Mazor X as a innovative technology that aligned with Medtronic’s established line of spinal products evidently helped make the pricey robotic system seem like a pragmatic investment for hospitals and surgery centers. Mazor Robotics has reported robust sales and fairly steady revenue growth since Medtronic took over the sales process.
And now Medtronic is set to grip the steering wheel more decisively.
“Over the past two years it’s become clear to us that enabling technology like this is the future,” Geoff Martha, president of Medtronic’s Restorative Therapies Group, told Bloomberg. “It improves outcomes in spinal surgery and reduces the variability. Once we realized this is clearly the future, we knew we had to integrate all this technology.”
The entanglement between Mazor and Medtronic has previously factored into some trouble with the authorities in the former’s home country. In the spring, Mazor’s offices were raided by the Israel Securities Authority because investigators believed insider trading took place around announcements of Medtronic’s investments in the company. The medical device giant’s bolstering of Mazor sent the Israeli company’s stock soaring.
Martha acknowledged the Israeli authorities’ continuing scrutiny into alleged secret tip-offs to investors by Mazor executives, but he dismissed the situation as largely irrelevant.
“We are aware of the issue, it’s an ongoing investigation,” Martha said. “It doesn’t have anything to do with Medtronic or the business.”
As if offering further proof that business is booming, Mazor and Medtronic are also expected to introduce the Mazor X Stealth Station at the NASS 2018 Annual Meeting, taking place in Los Angeles later this month. The tool incorporates Medtronic’s well-known surgical navigation technology with Mazor X to provide 3D surgical planning, real-time feedback during procedures, and robotic guidance for implants, which eliminates the requirement for guidewires.
The merger has already been cleared by the boards of both companies and is expected to close before the end of January 2019.
