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THINK Surgical seeks to disrupt the market for knee replacement robots by offering a handheld, implant-agnostic solution. The company’s President and CEO, Stuart Simpson, is an industry veteran who led Stryker’s entry into robotics in 2013 with the $1.65 billion acquisition of Mako Surgical.
We spoke with Mr. Simpson about THINK Surgical’s TMINI Robotic System, the barriers to mass market adoption and the potential market for open robotic systems. That conversion is excerpted below, edited for length and clarity.
Why has surgeon adoption of robotics for knee replacement remained low relative to the focus that robotics receives from the largest joint replacement companies?
Stuart Simpson: The market is about 15% penetrated in the U.S. If you look globally, the adoption is even lower. Companies are not thinking about driving the value of robotic programs. They’re thinking about placing robots to defend their implant market share.
The existing four large orthopedic companies with a dominant position in the joint replacement market are not robotic companies; they’re implant companies. They have a 90% share of the knee market in the U.S., which generates an 80% gross margin. So, all they care about is defending their highly lucrative implant market. That drives a lot of their behaviors and their decisions.
What are the main obstacles that have kept robotics from crossing into mainstream orthopedics?
Stuart Simpson: Number one is the form factor. These systems are 900 lbs or so. They’re difficult machines to wheel into your operating room. The operating area is quite limited. So, you have to position the robot very precisely, and that’s not easy. The robot displaces the surgical team. They have to learn a whole new workflow around the robot. It’s very disruptive.
Second, these robots are closed systems. Companies will dress it up as quality assurance or whatever. But the reality is it’s a razor and razor blade business model. The loser is the customer because they increasingly do not want to buy into these restrictive contracts that the orthopedic companies are offering them.
They talk about “free” robots. There’s no such thing as a free robot. You’re signing up for a volume and a price commitment for implants, millions of dollars of implants per year over multiple years, to get your free robot.
TMINI is a departure from conventional knee robots in just about every way. What was the development process like?
Stuart Simpson: Joel Zuhars, our VP of Research and Development, thought about what a robot is trying to do for knee replacement surgery. Not what a robot looks like. Everybody else has started with what a robot looks like. Well, it’s a big piece of equipment. It’s got an arm on it. That arm either has five, six or seven degrees of freedom so that it can manipulate in space to control an end defector that does something that ultimately allows the surgeon to guide a resection so that the implant ends up exactly where it needs to be.
Joel starts trying to get the implant exactly where it needs to be. What are the options with a miniaturized robot that’s handheld? It’s not a refrigerator; it’s more like an iPhone. It sits on the stand next to the scrub tech who is in the same place that they’ve always been, the physician assistants at the same place that they were trained to be for the last 20 years. And the surgeon is standing exactly where they are for every surgical procedure, and they just pick the robot up. It’s seven pounds now, not 900 pounds, and they hand it over. They hold it in one hand, do what they do for a few minutes, and achieve all the same results.
It’s just genius. When THINK Surgical recruited me to this company, they told me that we had a handheld in development, and I honestly couldn’t imagine what that looked like or how it would work. But as soon as I put my hands on it, the light bulb went off, and I thought, wow, this does everything. It just made 893 pounds of redundant machinery.
THINK’s open approach to implants is unusual in the current landscape. What percentage of the market would you expect to adopt an open platform?
Stuart Simpson: We currently have four partnerships. We have over half a dozen other companies talking to us right now, finalizing contracts to get them all onto the system. We’re fulfilling our commitment and value proposition of being an open platform robot.
But the big question is, what about the big guys, the 90% players? Are they ever going to give us an opportunity? I’ve been in this market for 25 years, and I’ve been competing with those companies fiercely for all of that time. The one major thing that has changed in my day-to-day business life is that I’m not competing with any implant company anymore. I view them all as potential customers.
I have regular meetings with the very senior executives in those companies. I tell them exactly what we’re doing, fully transparent, and I reassure them that I’m not an implant company; I’m not coming to eat their lunch. I’m offering them a different channel to put their implants on the market.
If the customers in the U.S. respond well to my value proposition, in other words, if 10%, 20% or 30% decide that the open platform is the way to go, then the big companies have to participate.
If it is only 1%, then they can ignore me. They can ignore THINK Surgical. But I sense that it could be anything up to a third of the market that wants what we’re offering.
THINK Surgical seeks to disrupt the market for knee replacement robots by offering a handheld, implant-agnostic solution. The company’s President and CEO, Stuart Simpson, is an industry veteran who led Stryker’s entry into robotics in 2013 with the $1.65 billion acquisition of Mako Surgical.
We spoke with Mr. Simpson about THINK Surgical’s...
THINK Surgical seeks to disrupt the market for knee replacement robots by offering a handheld, implant-agnostic solution. The company’s President and CEO, Stuart Simpson, is an industry veteran who led Stryker’s entry into robotics in 2013 with the $1.65 billion acquisition of Mako Surgical.
We spoke with Mr. Simpson about THINK Surgical’s TMINI Robotic System, the barriers to mass market adoption and the potential market for open robotic systems. That conversion is excerpted below, edited for length and clarity.
Why has surgeon adoption of robotics for knee replacement remained low relative to the focus that robotics receives from the largest joint replacement companies?
Stuart Simpson: The market is about 15% penetrated in the U.S. If you look globally, the adoption is even lower. Companies are not thinking about driving the value of robotic programs. They’re thinking about placing robots to defend their implant market share.
The existing four large orthopedic companies with a dominant position in the joint replacement market are not robotic companies; they’re implant companies. They have a 90% share of the knee market in the U.S., which generates an 80% gross margin. So, all they care about is defending their highly lucrative implant market. That drives a lot of their behaviors and their decisions.
What are the main obstacles that have kept robotics from crossing into mainstream orthopedics?
Stuart Simpson: Number one is the form factor. These systems are 900 lbs or so. They’re difficult machines to wheel into your operating room. The operating area is quite limited. So, you have to position the robot very precisely, and that’s not easy. The robot displaces the surgical team. They have to learn a whole new workflow around the robot. It’s very disruptive.
Second, these robots are closed systems. Companies will dress it up as quality assurance or whatever. But the reality is it’s a razor and razor blade business model. The loser is the customer because they increasingly do not want to buy into these restrictive contracts that the orthopedic companies are offering them.
They talk about “free” robots. There’s no such thing as a free robot. You’re signing up for a volume and a price commitment for implants, millions of dollars of implants per year over multiple years, to get your free robot.
TMINI is a departure from conventional knee robots in just about every way. What was the development process like?
Stuart Simpson: Joel Zuhars, our VP of Research and Development, thought about what a robot is trying to do for knee replacement surgery. Not what a robot looks like. Everybody else has started with what a robot looks like. Well, it’s a big piece of equipment. It’s got an arm on it. That arm either has five, six or seven degrees of freedom so that it can manipulate in space to control an end defector that does something that ultimately allows the surgeon to guide a resection so that the implant ends up exactly where it needs to be.
Joel starts trying to get the implant exactly where it needs to be. What are the options with a miniaturized robot that’s handheld? It’s not a refrigerator; it’s more like an iPhone. It sits on the stand next to the scrub tech who is in the same place that they’ve always been, the physician assistants at the same place that they were trained to be for the last 20 years. And the surgeon is standing exactly where they are for every surgical procedure, and they just pick the robot up. It’s seven pounds now, not 900 pounds, and they hand it over. They hold it in one hand, do what they do for a few minutes, and achieve all the same results.
It’s just genius. When THINK Surgical recruited me to this company, they told me that we had a handheld in development, and I honestly couldn’t imagine what that looked like or how it would work. But as soon as I put my hands on it, the light bulb went off, and I thought, wow, this does everything. It just made 893 pounds of redundant machinery.
THINK’s open approach to implants is unusual in the current landscape. What percentage of the market would you expect to adopt an open platform?
Stuart Simpson: We currently have four partnerships. We have over half a dozen other companies talking to us right now, finalizing contracts to get them all onto the system. We’re fulfilling our commitment and value proposition of being an open platform robot.
But the big question is, what about the big guys, the 90% players? Are they ever going to give us an opportunity? I’ve been in this market for 25 years, and I’ve been competing with those companies fiercely for all of that time. The one major thing that has changed in my day-to-day business life is that I’m not competing with any implant company anymore. I view them all as potential customers.
I have regular meetings with the very senior executives in those companies. I tell them exactly what we’re doing, fully transparent, and I reassure them that I’m not an implant company; I’m not coming to eat their lunch. I’m offering them a different channel to put their implants on the market.
If the customers in the U.S. respond well to my value proposition, in other words, if 10%, 20% or 30% decide that the open platform is the way to go, then the big companies have to participate.
If it is only 1%, then they can ignore me. They can ignore THINK Surgical. But I sense that it could be anything up to a third of the market that wants what we’re offering.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
