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Globus Medical (GMED) acquired StelKast, a manufacturer of hip and knee replacement implants, and announced plans to launch a robotic system for joint replacement applications in late 2020. GMED purchased StelKast for USD $24.1MM in cash, with an additional potential $4.3MM in product sales milestones.
The acquisition is the first part of GMED’s strategy to acquire implant and metallurgical technology with a proven safety record and long history of clinical use to combine with their robotic technology. The company seeks to build on its experience with robotics to expand beyond spine and into cranial and arthroplasty procedures.
GMED has been developing a robotic system for total joints for the past several quarters, with accelerated investment in the program during 1H19. The company doesn’t plan to aggressively ramp up commercial activity on the acquired hip and knee devices themselves until the launch of the accompanying robotic system.
In response to questions about strategy during the company’s quarterly earnings call, President and Chief Executive Officer Dave Demski remarked that with a strong core competency and team behind development (recall their acquisitions of KB Medical and Nemaris/Surgimap), GMED sought other ways to leverage robotic technology.
Demski also provided insight into the company’s thoughts on a multi-application robot. When asked about developing a single platform with the ability to perform multiple procedure types with minor hardware changes (for instance, joint and spine), he suggested there are benefits to tailoring the systems for each specialty. “I understand the value proposition…but I think that when you get into the dynamics of the accounts—the surgeons and the different specialties—getting them to share technology like that is a challenge, and you have to get them all to agree on which one,” he said.
StelKast was established in 1992. ORTHOWORLD and analysts estimate the company’s yearly revenue at ~$10MM, all in the U.S. Its portfolio comprises over 40 devices including modular hip stems, acetabular cups, posterior stabilizing and cruciate retaining knees and a revision knee.
Upon the system’s launch, Globus will compete against other companies with joint replacement robotic-assisted tools, such as Corin, Smith & Nephew, Stryker, THINK Surgical, Zimmer Biomet. DePuy Synthes’ Orthotaxy is also set for a 2020 launch.
