Intuitive Surgical ($ISRG) has enjoyed a sizable head start in the robotic surgery arena. But Medtronic ($MDT) is gaining momentum, having partnered in May with small-cap robotics player Mazor, and now detailing plans for its internally developed robotic surgery program.
|Bryan Hanson, Medtronic EVP and president of the Minimally Invasive Therapies Group|
The device giant has kept its robotics R&D largely under wraps until now. It is Medtronic's single largest R&D expenditure in its Minimally Invasive Therapies Group and one of largest in the company as a whole, said Bryan Hanson, EVP and group president, at Medtronic's recent investor day. The company expects its surgical robot to generate "material revenue" in 2019, though "we'll obviously launch before that." It's "likely" to hit the market in fiscal 2018, Leerink's Danielle Antalffy wrote in a note.
Medtronic plans to use its surgical robot in every surgery that robots are currently able to perform. Its prowess in minimally invasive surgery will allow the company to immediately target all of these procedures "out of the gate," Hanson said, though he highlighted colorectal, thoracic and bariatric surgery in particular.
The devicemaker started working with the German Aerospace Center, or DLR, on its surgical robotics platform about three years ago, Hanson said. This technology relationship was the first of many that Medtronic pursued to speed up development. Picking up existing tech along the way is allowing Medtronic to reach the market faster, "because you don't have to create it, it doesn't have to be proprietary, and… it's lower cost to take things off the shelf and ultimately more easily upgradeable," Hanson said. Medtronic is currently working on its tenth prototype of the robot, with another likely to come before it moves onto next steps.
The news follows Medtronic's recently announced spine-focused deal with Israel's Mazor Robotics ($MZOR), which could end up being worth more than $50 million. The investment will come in three potential tranches and, if Medtronic goes through with all three, will result in its owning 15% of Mazor. The Israeli company markets the Renaissance Guidance System for spine and brain surgeries.
Also at the investor day, Medtronic disclosed that it picked up Minneapolis-based startup Responsive Orthopedics for an undisclosed sum. It will help Responsive develop its low-cost hip and knee implants, but Medtronic declined to detail long-term goals or financial targets.