Medtronic puts another $40m into Mazor Robotics

August 30, 2017 Medical Devices, Medtronic, Orthopedics, Robotics

Mazor Robotics (NSDQ:MZOR) said today that it’s accelerating a deal with Medtronic (NYSE:MDT), which is due to put another $40 million into Mazor and take on exclusive global distribution rights for the Mazor X robot-assisted surgery device.

It’s the third investment in the Israeli surgical robotics concern for Fridley, Minn.-based Medtronic, taking its total investment to $72 million and a 10.6% stake in Mazor. The deal also includes 1.21 million warrants priced at $44.23 apiece; if exercised in full Medtronic would own a 14.2% stake in Mazor, having invested some $125 million.

A year ago Medtronic paid $20 million for a 3.4% stake as part of a two-stage deal struck in May of that year. The first phase of the deal called for Medtronic to acquire 15 Mazor systems in 2016 and made Medtronic Mazor’s sole partner for developing and commercializing robot-assisted spine surgery devices. The second phase called for a three-step equity investment; after the second step, triggered by the launch of the Mazor X system in July 2016, Medtronic had spent $31.9 million acquiring a 7.27% stake in Mazor.

The new terms of the deal set annual minimum Mazor X purchases that could mean hundreds of the systems over a four-and-a-half-year period and place about 30 Mazor sales reps under the Medtronic umbrella “to assure continuation of the current momentum,” Mazor said, noting that it will continue to service the installed base of Mazor X platforms.

Apart from shoring up the balance sheet, the deal is expected to slash Mazor’s annual operating expenses by $13 million, or about -25%, the company said.

“Medtronic is our valued strategic partner and together we have achieved the desired outcome for Phase I well ahead of our original plan,” Mazor CEO Ori Hadomi said in prepared remarks. “I believe that the move to this next phase reinforces our significant leadership position in the growing market for surgical guidance systems for spine procedures. Our strategic partnership will allow hospitals in new markets around the world to have access to the Mazor X and gain the clinical benefits that this technology offers.

By Brad Perriello | MassDevice

Image Credit: Mazor Robotics

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About Peter Coffaro 559 Articles

A growth-driven and strategic executive, Peter Coffaro commands more than 20 years of progressive management success within the medical device industry. As a District Sales Manager for Stryker Orthopaedics, Peter was responsible for managing and directing a regional sales force to achieve sales and profit goals within the Rocky Mountain region. Previously, he was the Director of Sales & Marketing for Amp Orthopedics. In this role, Peter was responsible for planning, developing, and leading all sales and marketing initiatives. Peter is a former orthopedic distributor in the Pacific Northwest. He has also worked with DePuy Orthopaedics as well as Zimmer, and held positions in sales, sales training, and sales management. Peter has an extensive background in organizational development, business development, sales management, negotiating and P&L management. Peter holds a B.S. degree in Biology from Northern Illinois University.