Earlier this year Mazor Robotics made two deals with Medtronic worth up to $50 million to come in three potential tranches. At the time, it picked up $11.9 million in return for 4% of its shares. Now, with the launch of its new robotic-assisted spine surgery system, the Israeli small cap is meeting a milestone and stands to collect a second tranche of up to $20 million from Medtronic.
The initial partnership was forged in May and comprised co-promotion, co-development and the potential global distribution of Mazor’s future spine products by Medtronic ($MDT). All told, the tie-up could exceed $50 million, with Medtronic owning about 15% of Mazor if all tranches are executed. The third tranche depends on the initiation of global distribution of Mazor’s products.
Mazor revealed its Mazor X guidance platform for spine surgeries on Tuesday. The system was designed to go beyond trajectory guidance and incorporate analytical tools, multisource data, optical tracking, intra-op verification and connectivity technologies, Mazor said in a statement.
“The Mazor X platform expands the field of spine surgery from trajectory guidance to assisting surgeons with a total patient treatment strategy,” said Mazor CEO Ori Hadomi in the statement." Following our recently formed partnership with Medtronic and the increased market access it provides us, the launch of the Mazor X positions us for accelerated growth and long term leadership in the spine market."
As part of the co-promotion and co-development agreement, Medtronic has already ordered 15 Mazor X systems, according to the statement. And while the duo will work together to co-develop products for spinal surgery using Medtronic implants, Hadomi said the system will be compatible with other companies’ implants, the Star Tribune reported. The Mazor X will go for an “introductory” price similar to that of Mazor’s Renaissance system, which sells for $850,000, according to the Star Tribune.
In the meantime, Medtronic is also working on its own surgical robot, which it intends to use in every surgery that robots are currently able to perform. The robot is “likely” to enter the market in 2018, according to analysts. But Medtronic isn’t the only devicemaker trying to get in on surgical robotics. While Intuitive Surgical ($ISRG) has enjoyed leading the pack, Johnson & Johnson ($JNJ) and Verily’s joint venture, Verb, is working on surgical robotics. And Auris Surgical Robotics and Hansen Medical ($HNSN)--both founded by Dr. Frederic Moll, who also founded Intuitive--announced earlier this year that they would merge.
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