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Medtronic to Acquire Mazor Robotics

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Medtronic (MDT) entered into a definitive agreement to acquire Mazor Robotics for US $1.64BB in cash in a transaction that is slated to close in January 2019. For 2017, Mazor posted revenue of ~$65.0MM, +78.7% vs. 2016.

The announcement is not surprising, given their relationship that began in 2016 with a multi-phase commercial agreement for co-promotion, co-development and exclusive global distribution of certain Mazor products, as well as an equity investment in Mazor by MDT. This led to >80 installations of the Mazor X™ Robotic Guidance platform for spine surgery since the system's launch in 2016. The partnership pairs Mazor's guidance tools with Medtronic's implants, navigation and imaging technologies.

At NASS this year, the companies will debut Mazor X Stealth Edition: a combination of Mazor X fully integrated with MDT's Stealth navigation for surgical planning, execution and confirmation. The system is expected to launch by early 2019, offering competition to Globus Medical's ExcelsiusGPS system that already offers both navigation and robotics. In Globus' 2Q call, leadership noted developments to move Excelsius beyond pedicle screw placement—for instance, into interbody use.

The move clearly indicates MDT's belief in the future of guided spinal procedures. Many of its peers have technologies that could be or are being developed for use in the spine, including Johnson & Johnson's Orthotaxy, Stryker's Mako and Zimmer Biomet's ROSA. Other systems include Brainlab's Cirq and TINAVI Medical's TiRobot, which is reported to be the only surgical robot capable of performing surgery on all spinal regions.

Sources: Medtronic; Wells Fargo Securities; ORTHOWORLD Inc.