Medtronic is now selling robotic surgical systems.
The Minnesota-run medical device maker this week announced plans for a $40 million investment in Israeli firm Mazor Robotics along with an agreement to become Mazor's exclusive worldwide distributor for its newest robotic surgical guidance systems for spine surgery.
About 30 members of Mazor's sales team are expected to become Medtronic employees to keep the sales momentum moving in the right direction, Mazor announced Wednesday.
"Mazor Robotics' technology and Medtronic's [surgical] navigation capabilities and implant systems provide spine surgeons with complete procedural solutions that advance the standard of care and will help surgeons maximize predictability and efficiency," Medtronic spinal division President Doug King said in a news release.
When the $40 million equity investment closes — expected to happen around Sept. 12 — Medtronic will have invested a total of $72 million in Mazor. Medtronic is also getting warrants allowing it to buy another 1.2 million American depositary shares in the company at a specified price, which would bring Medtronic's total investment to $125 million and give it ownership of 14 percent of the company's fully diluted shares.
The investments are taking place according to an agreement announced last year, but the $40 million infusion is coming earlier than expected because of strong sales and "higher than expected global market acceptance and demand" for the newest system, called the Mazor X, Mazor said in its announcement.
The Mazor X allows a spine surgeon to create a complex 3-D surgical plan before or during the procedure using medical imaging. The system then uses electronic navigation systems and a robotic arm to ensure that the doctor's surgical tools are precisely positioned for the procedure.
Since September 2016, the partnership between Mazor and Medtronic has resulted in orders for 59 Mazor X systems, Mazor said. As of the end of July, there were 114 Mazor X systems installed in the United States, a 50 percent increase from one year earlier, according to a presentation for investors.
Although Mazor told investors last year that the Mazor X machine would carry a $900,000 price tag plus $1,500 in "disposables" for each surgery, the company said Wednesday that it is now using contractual pricing agreed to with Medtronic. The new contract prices are at lower rates than what Mazor got from its direct sales, but exact figures were not disclosed.