Medtronic Accelerates Mazor Robotics Partnership with $40M Investment
Medtronic is speeding up its investment plan with the fast-growing, surgical-guidance systems developer Mazor Robotics.
Isreal-based Mazor announced its deepening partnership deal with the medtech giant on Wednesday, in which Medtronic would agree to give the startup an additional $40 million for a larger stake and exclusive control of distributing its devices used for spinal procedures.
The agreement accelerates the two companies’ original timeline that gave Medtronic exclusivity in 2018. “These developments are a result of the early achievement of certain sales and marketing milestones by both companies,” Mazor said in a release.
Mazor and Medtronic’s partnership agreement dates back to May 2016 when the two agreed to a three-tranche investment plan that would give Medtronic a sizeable stake in Mazor.
With its latest infusion of $40 million, Medtronic’s total investment in Mazor grew to $72 million. The investment, which gives Medtronic shares of Mazor for $38.46 each, will ultimately bring its stake in the company to 10.6 percent.
Moreover, Medtronic received warrants to purchase an additional 1.21 million shares of the company at a 15 percent increase in the price it paid in its $40 million investment. If Medtronic fully exercises the warrants, the company’s investment total would jump to $125 million and its stake in Mazor would grow to just over 14 percent, Mazor said.
“The strategic partnership between Mazor and Medtronic has already resulted in 59 Mazor X [spinal surgery guidance] system orders since the October 2016 launch,” said Ori Hadomi, CEO of Mazor, in a statement. “Now as commercial responsibility for the Mazor X in the spine market shifts to Medtronic, the annual minimums for sale of Mazor X systems agreed to by the two companies are expected to drive substantial improvement in Mazor’s financial results during the next several years.
“Together we will be able to further advance our robust jointly-developed product pipeline for the spine market,” he added, “while Mazor also pursues new opportunities to apply our innovative technologies to other medical needs.”
Per their agreement, 30 members of Mazor’s sales organization are expected to join Medtronic “to assure continuation of the current momentum,” Mazor said. With additional staff, Medtronic is forecasting sales of the Mazor X systems to reach several hundred over the next several years.