Thanks! You've successfully subscribed to the BONEZONE®/OMTEC® Monthly eNewsletter!

Please take a moment to tell us more about yourself and help us keep unwanted emails out of your inbox.

Choose one or more mailing lists:
BONEZONE/OMTEC Monthly eNewsletter
OMTEC Conference Updates
Advertising/Sponsorship Opportunities
Exhibiting Opportunities
* Indicates a required field.

Medtronic Assumes Exclusive Commercial Rights for Mazor X

Medtronic entered Phase II of its strategic partnership with Mazor Robotics, granting Medtronic exclusive global distribution of the Mazor X surgical robotic assistance platform. Medtronic will also make a $40MM third tranche investment in Mazor.Mazor X

The companies established Phase I of their relationship in 2Q16, in which they partnered on co-promotion and co-development of certain Mazor products. The move to Phase II occurred ahead of the planned 1Q18 timeline, in light of higher than expected global market acceptance and demand for the Mazor X system, as well as early achievement of certain sales and marketing milestones by both companies.

Under terms of Phase II:

  • Medtronic assumes exclusive global spine market commercialization of Mazor X
  • Medtronic will implement annual minimums for purchase of Mazor X systems (with a cumulative potential of hundreds of systems over 4.5 years)
  • ~30 Mazor sales staff will join Medtronic
  • The companies will co-develop spine products that capitalize on Mazor’s surgical planning and Medtronic's navigation/implants; initial results should be showcased at NASS 2017
  • Medtronic will invest $40MM in Mazor, yielding a total current investment of $72MM

The partnership with Medtronic resulted in orders for 59 Mazor X systems in ten months. As of June 30, Mazor had 170 Mazor X and Renaissance systems installed: 113 in the U.S. and another 57 in ex-U.S. markets.

The partnership affords Medtronic the lead in robotics amongst the largest spine players; Zimmer Biomet and Globus have also invested in robotics. Zimmer Biomet purchased Medtech’s ROSA Spine robotic-assistive device for $130 million in 2016, though management has said little about the system except for a future application in knee. Globus Medical made two plays in August, acquiring robotic company KB Medical and receiving FDA 510(k) clearance to market its Excelsius GPS robotic guidance and navigation system.

Moving forward, Mazor will recognize revenues for Mazor X at contracted pricing that is lower than what was realized through its direct sales channel. Further, Mazor will receive synergy fees for use of Medtronic implants. Moving from direct sales to this new distribution model is expected to reduce Mazor’s annual operating expenses by ~$13 million immediately.

Mazor will still market the Renaissance surgical guidance system in certain market segments—not yet specified–where Renaissance is able to provide customers with added value.


 
Julie Vetalice is Editorial Assistant for ORTHOWORLD. Reach her by This email address is being protected from spambots. You need JavaScript enabled to view it..

 

4 COMMENTS

Security code
Refresh