Johnson & Johnson acquires Auris Health
Deal value: $5.8 billion
Announced: February 13, 2019
Completed: April 1, 2019
The second-largest deal of 2019 is one of two major plays by Johnson & Johnson as it looks to assert its position in the steadily growing field of surgical robotics.
With the $3.4 billion upfront cash deal, J&J not only netted Auris Health—the Silicon Valley maven behind the Monarch endoscopic platform for lung procedures—but also its founder, the robotic surgery giant Frederic Moll, who was named chief development officer for J&J’s medical device companies.
Moll has been called the father of the field: After developing laparoscopic technologies as an entrepreneur, he co-founded Intuitive Surgical in 1995, makers of the well-traveled da Vinci and CyberKnife guided surgery systems. He then helped launch Auris Surgical Robotics, as it was then known, in 2007.
As his fourth robotic surgery venture, Auris operated in stealth mode for years before quietly receiving an FDA clearance in 2016 for an endoscope system known as ARES.
Equipped with a flexible, camera-tipped tube that snakes down a person’s airway to search the insides of their lungs for cancerous nodules, the ARES system was the precursor to its current Monarch platform—which helped Auris raise more than $700 million in venture capital funding for development and commercialization.
Designed to access the tight, difficult-to-reach spaces around the periphery of the lung—and remotely piloted by surgeons using a video game-like controller—the Monarch system showed it could easily deploy a biopsy needle and retrieve samples in first-in-human studies late last fall.
But even before it was acquired by J&J, Auris was working with a subsidiary for the healthcare conglomerate's Ethicon division. Auris had teamed up with that Ethicon unit, NeuWave Medical, to add microwave-powered ablation instruments to its surgical arm—giving the robotic snake some fangs and allowing it to find, localize and destroy early lung tumors all in one surgical procedure.
For the future, J&J said it plans to use Auris and its tech to help expand its digital surgery portfolio across multiple specialities—with its acquisition deal including $2.35 billion in potential milestone payments for new advancements.
And as the deal closed in April 2019, J&J said Auris would also complement its other robotic efforts, such as its Verb Surgical joint venture with Verily.
But these two projects may get the chance to work together a lot more closely, with J&J announcing last December that it plans to fully take over the four-year-old enterprise from Google’s life science-focused sister company—a decision Moll had a hand in.
Verb has been pursuing a general surgery robot paired with big data capabilities that would allow it to share, analyze and disseminate best practices on a global scale—what it has referred to as “Surgery 4.0.” The financial terms have not been disclosed, and that deal is expected to be completed in the first half of 2020.