Medtronic is all-in on surgical robotics after inking a deal to buy Mazor Robotics for more than $1.6 billion in cash. For Medtronic, the world’s largest medical device maker, the deal expands its leadership in the spinal surgery market and expedites its move into robotic-assisted procedures.
Medtronic has owned since 2016 a $300 million stake (about 11%) in Mazor, which is widely regarded as a leader in robot-assisted spine surgery. By 2022, the global spinal surgical robotics market is expected to reach $2.77 billion. Mazor makes the Mazor X guidance system and the Renaissance robot-assisted spine surgery platform.
Medtronic became the exclusive worldwide distributor of the Mazor X system in 2017, and more than 80 of the systems have been successfully installed to date. Now all of Medtronic’s chips are in the pot with the $58.50-per ADR share offer to acquire Mazor, which is based in Caesarea, Israel. The offer works out to $29.25 (ILS104.80) per share, for a total of roughly $1.34 billion net of the existing stake and acquired cash.
Medtronic plans to develop a fully-integrated surgical planning, execution and confirmation system by uniting its existing spine technologies with the Mazor robotic system when the deal closes, which is expected to happen during Medtronic’s third fiscal quarter, which ends Jan. 25, 2019. Medtronic’s expanding line of spine technologies generated $2.7 billion in revenue in 2017.
“We believe robotic-assisted procedures are the future of spine surgery, enhancing surgeons’ abilities to perform complex procedures with greater precision, consistency and control. Medtronic is committed to accelerating the adoption of robotic-assisted surgery and transforming spine care through procedural solutions that integrate implants, biologics and enabling technologies,” says Medtronic’s restorative therapies president Geoff Martha. “The acquisition of Mazor adds robotic-assisted guidance systems to our expanding portfolio of enabling technologies, and we intend to further cultivate Mazor’s legacy of innovation in surgical robotics with the site and team in Israel as a base for future growth.”
Medtronic and Mazor are expected to showcase their partnership and the Mazor X system at the annual North American Spine Society conference in Los Angeles on Sept. 26-29.
“Today is a historic day for spine surgery and a defining event in the market’s evolution, and I want to acknowledge and thank all of those whose contribution and faith have been so critical and impactful to our success,” added Mazor Robotics CEO Ori Hadomi. “The Mazor team and product portfolio’s full integration into Medtronic will maximize our impact globally through Medtronic’s channels, advance our systems’ leadership position in the marketplace, and drive the realization of our vision to heal through innovation.”
On a related note, Hadomi continues to be the subject of an insider trading investigation. Hadomi was first questioned in 2017 by Israel Securities Authority about Mazor’s relationship with Medtronic. “We are aware of the issue, it’s an ongoing investigation,” says Martha. “It doesn’t have anything to do with Medtronic or the business.”