On Sept. 20, Medtronic announced plans to acquire all outstanding shares of Mazor Robotics, a company it has had a strategic partnership with since 2016. Medtronic plans to make the acquisition for $1.64 billion to strengthen its core spine technology platform.
Medtronic expects the acquisition will generate a double-digit return on invested capital by year four and is planning new innovations combining Mazor's technology with Medtronic's navigation products.
Five days after announcing the acquisition, on Sept. 25, Medtronic launched the Infinity(TM) Occipitocervical-Upper Thoracic (OCT) System, designed to simplify posterior cervical spine procedures. The system is a complete procedural solution that integrates navigation and biologics with devices and instrumentation for efficient fusion procedures and workflow.
Here, Senior Vice President and President of Medtronic Spine Doug King and Senior Marketing Director Billy Albans discuss the company's new technology and factors driving spine market trends in the future.
Question: Medtronic recently announced plans to acquire Mazor Robotics. How does that tie into your business strategy?
Doug King and Billy Albans: With the Mazor acquisition, we continue our focus on technology advancements around procedural solutions, and part of that involves enabling technology: StealthStation navigation and O-arm imaging which are unique to Medtronic and promote Surgical Synergy. We think the combination of all these technologies together is going to drive success in the future. We are really leaning on our ability to transform spine surgery and spine outcomes, and we do that by creating better procedural solutions and clinical outcomes.
Q: Why was it important to launch the Infinity System with navigation capabilities?
The placement of cervical screws is more complicated naturally, and navigation becomes more critical in this type of surgery. We wanted to make sure when we launched the Infinity System we had navigation capabilities right out of the gate.
From an anatomic standpoint, surgeons are trying to place the screw in the bone: you have the spinal cord and vertebral artery to avoid, so it becomes very critical to place screws accurately. Navigation gives you the opportunity to see this in a 3D plane. You can see the anatomy from the front and the side, but you can also see where the instrument is coming from and ensure you're not getting near the spinal cord or vertebral artery.
The reason we are so excited about navigation is it increases accuracy and makes the procedure more reproducible, and it can reduce radiation exposure for surgeons.
Q: Medtronic has been successful in the spine space for decades with spinal fusion technologies and solutions. What is Medtronic's strategy for the spine business going forward?
Medtronic Spine has been the leader in delivering innovative, effective and value-based products to treat spinal disorders. One of our strategies as a company is to make sure we have applications for all aspects of the spine, and when you do that, you give surgeons the complete solutions they are looking for in order to treat the patients who count on them.
Q: Are you looking at any types of surgeons who are early adopters of navigation and robotics? Or does it run the gamut?
Initially, you would think the younger surgeons are the ones to adopt this, and they are definitely looking at it, but we've seen some of our most tenured surgeons looking at this technology and wanting to incorporate it into their practice. We've heard some surgeons say this will extend their careers and allow them to operate longer. If they can make the operation easier by incorporating the technologies, it can extend the career of a surgeon as well. I think it's definitely here to stay. We are seeing all-comers interested in the technologies.
Q: Medtronic has been in the cervical spine space for more than 25 years and continues to innovate there. Could you discuss what differentiates your current offerings?
Posterior cervical instrumentation has been out there for a while. We pioneered that many years ago and continue to build on our legacy of innovation and commitment, so each element of this makes it more comfortable for the surgeon and gives them more confidence. It's a pretty tight space they are operating in, so [we give them] assurance that they have technology that's designed to be more efficient with more features that allow surgeons to see the anatomy easier, and they can visualize the trajectory of where the screw goes. It's a combination of many little things that will hopefully lead to a better outcome.
From the surgeon perspective, we have different sizes. We go to a 5.5 mm screw, and most systems don't have that. It allows surgeons to transition down to the thoracic spine easily without having to change to a different system. We have a 3.0 mm screw, which allows surgeons to do some of the smaller stature procedures. Little things like this are what surgeons are looking for, and adding in navigation certainly helps with accurately placing the screws and giving them confidence when they close up.
Q: Healthcare is moving toward value-based care initiatives to improve outcomes and lower costs. How is Medtronic innovating with this in mind?
We don't want to iterate for the sake of iteration; new developments have to be more meaningful. Developing solutions that add value in a lot of different ways is important to us, and we think we can help surgeons save time, increase confidence, drive reproducibility, and improve outcomes. That's our focus and one of the reasons why we believe robotic-assisted surgery will be the next evolution.