Mazor Robotics Posts 1Q17 Revenue

Mazor Robotics reported 1Q17 revenue of US $11.7MM, +82.8% from 1Q16.

Geographic results: (U.S. $11.2MM, +100%; ex-U.S. $0.5MM, -37.5%)

1Q17 performance highlights:

• Ended quarter at 159 systems sold worldwide; of that, 104 in the U.S.
• Received purchase orders for 6 systems and ended 1Q17 with backlog of 14 (revenue for the latter will be recorded in 2017)
• Supplied 12 Mazor X systems (including 6 to Medtronic) to fulfill 2016 year-end 21-system backlog
• In 2Q, received 4 POs for Mazor X; in the 6 months since its launch, received 43 orders (including a 15-system PO from Medtronic in 3Q16)
• U.S. increase attributed to revenue recognition from 12 Mazor X systems
• Mazor X sales cycle lasts ~6 to 8 months, vs. Renaissance, which could last >12 months; this is partially attributed to an increase in benefits/awareness of robotics
• After close of quarter, received FDA clearance to market Mazor X Align software for use in spinal deformity correction

Update on agreement with Medtronic (MDT):

• As announced in 2Q16, the first phase of the commercial agreement started with U.S.-based co-promotion; if both organizations achieve respective milestones by the end of 2017, they then enter stage 2, in which MDT will assume exclusive global sales and distribution rights for future MZOR spine systems and applications
• Mazor leadership presently expects to meet its own milestones earlier than expected
• “Can’t speak on behalf of MDT”—the decision to move to the second phase is up to MDT

Sources: Mazor Robotics; ORTHOWORLD Inc.

An ORTHOWORLD Observation:

Mazor has competitors at varying stages of development for their own robotic technologies. These include:

• Brainlab, prototype in development for spine
• Globus Medical, Excelsius GPS (FDA clearance expected in 1H17) (UPDATE: clearance is delayed to 2H17)
• KB Medical, AQrate (CE Marked and limited launch slated for this year)
• TINAVI Medical, numerous applications available in China
• Zimmer Biomet, ROSA (CE Marked and FDA cleared for use in brain and lumbar spine)

Others that could enter the spine application arena include Intuitive Surgical, whose da Vinci system has been used clinically in specific spinal indications, and Stryker, which could potentially develop Mako for spine, though we certainly don’t expect that in the near-term.