The biggest name in robot-assisted surgery is Intuitive Surgical, whose da Vinci Surgical System has been installed in more than 2,000 hospitals since its introduction in 1999. However, with sales of medical robots topping a billion dollars annually (Intuitive itself reported revenue of $611 million in its most recent quarter) and expected to grow, they are obviously not the only company interested in the segment.
Today, one of those other companies, Mazor Robotics, released its first quarter 2013 results. The Israel-based company produces Renaissance, a robotic guidance system for a variety of spinal procedures, and was named one of Fast Company magazine’s Top 5 most innovative robotics companies earlier this year.
Mazor’s revenues are a fraction of Intuitive’s, but they are growing quickly. In the first quarter, it doubled its revenue to $4.9 million, compared to $2.4 million in the first quarter of 2012. That’s thanks in large part to Renaissance sales in the U.S., where the company sold five units and generated $4.1 million in revenue.
CEO Ori Hadomi said in a conference call today that the company is consequently dedicating 80 percent of its investment dollars to its U.S. growth strategy. The company’s U.S. sales and marketing team has already doubled since last year to about 40 and more additions are planned throughout the year.
Renaissance was introduced to the U.S. just two years ago and remains in the early stages of penetrating the market, with only about two dozen systems installed in the U.S. (and about twice that number globally). It’s also not profitable yet, with the most recent quarter’s loss ($10.6 million) being particularly pronounced — mostly due to financing expenses of $9.9 million related to the “revaluation of the fair value of the derivative instruments granted as part of a prior financing agreement.”
However, health care robotics is clearly a growing market, and the news late last week that Intuitive was not liable in the death of a patient who underwent prostate surgery involving a da Vinci surgical system helped allay fears that the technology will be set back by a number of similar pending lawsuits.
In today’s conference call, Hadomi was optimistic about his company’s fortunes, saying that robotic technology has proven itself to be a good investment for both patients and hospitals.
“The age of evidence-based medicine and accountable care is making payers and providers reassess clinical care in general and, specifically, the use of surgical robotics,” he said. “Even post-adoption, vendors are expected to demonstrate that beside the clinical benefits, the cost of utilization of their products is offset by savings or earnings. Renaissance is no different and is judged by hospital administration in this light. So its continued growth in clinical adoption attests to the value it delivers to patients and through them to the providers caring for them.”
[ photo courtesy of Mazor Robotics ]