May 20, 2016      

Lots of maybes

Maybe it’s because most of robotics is finally gaining wide acceptance and reaping even wider sales, all the while looking ready to skyrocket to mega-success, that healthcare robotics looks so earthbound in comparison. Industrial robotics is the best it’s ever been; collaborative robotics has hit its stride; armies of consumer/home robots are on the march into homes around the globe; drones, although there’s a bit of drone fatigue hovering about, are a huge industry triumph almost overnight; a dozen brand new logistics robots are stalking warehouses, and driverless everything is the word from Tokyo to Detroit. That’s the reality of robotics here halfway through 2016. However, healthcare robotics seems not to be part of that new reality. It was a robust part of the new reality just a short time ago (2014). What’s happened since to change all that?

Who’s on first?

Lately, it’s difficult to find a legit… success story in the healthcare robotics segment except for Intuitive Surgical’s near-magical romp through ORs at $3 million a pop and the hundreds of thousands of operations that its da Vinci has performed. Healthcare robotics is quiet these days. Why? Maybe a chill set in when Johnson & Johnson’s Sedasys, the robotic anesthesiologist, was unceremoniously pulled from the market following a contentious year of poor sales and poor relations with the American Society of Anesthesiologists.

health 2016

Maybe it was TransEnterix’s fateful encounter with the Federal Drug Administration as its SurgiBot failed at FDA 510(k) approval Maybe it’s the exoskeleton industry’s sloth-like pace at getting FDA approvals and inability to lower its sky-high price tags.

Maybe it’s the sense of uncertainty surrounding stealthy robotics company Auris Surgical Robotics acquiring Hansen Medical and its Sensei system for electrophysiology procedures and the Magellan system for peripheral vascular interventions, while Auris’ stated goal is to a develop a surgical robot for ophthalmological procedures. Is there a defined mission there?

Maybe it’s the confusion that springs up when companies developing medical robots sue each other like Blue Belt Technologies and MAKO over an executive’s non-compete contract and proprietary information jointly held by both companies.

Then Blue Belt further muddies the waters of clarity by selling itself and its Navio surgical system for $275 million to Smith & Nephew, as the latter jockeys for a leading position in the fast-growing area of orthopedic robotics-assisted surgery. All of which is quickly followed by Stryker buying MAKO, as the former tries to keep up and then maybe gain edge on its competition with Smith & Nephew.

It wasn’t too long ago that Stryker, with a war chest of $18 billion, was eyeing Smith & Nephew as an acquisition.

Then too, maybe it’s even a bad vibe cast onto robotics by the general pall of mistrust that Theranos, a blood-testing machine, has engendered in misleading federal regulators by using a regulatory loophole to avoid getting its tests approved. Maybe a combination of uncertainty, confusion, law suits, recalls, pricing, plodding, regulatory hurdles, and the need to continually search out new investment capital can all work in concert to put a distinct chill on an industry.

Much has been visited upon healthcare robotics since 2013, and it’s taken its toll on the young technologies. With the exception of Medrobotics recently gaining FDA approval, much of the cheering for healthcare robotics has stopped.

The chart below chronicles a distinct lack of vigor in sales from 2013 through 2017. It’s not until 2018 that market acceleration begins to set in.

Next 12 to 24 months

In an exclusive for Robotics Business Review, Milos Todorovic, lead analyst at Lux Research Inc. provides a forecast for the next twelve to twenty-four months for healthcare robotics. “Purely in terms of growth potential, the robotic surgery market will perform the best in the next couple of years due to its (relative) maturity and increasingly developed infrastructure.

robot chart

“The therapeutics market lacks existing infrastructure, making it a fertile ground for introducing new technologies rather than improving upon previous generation systems. However, the path to medical reimbursement may subsequently prove to be more complicated and it will take longer than 2 years to see any meaningful growth.

Meanwhile, the prosthetics market will provide large opportunities globally so long as reimbursements remain favorable and the bionics can prove significant improvements in patient quality of life over classic prosthetics.

“In the short- to medium-term this market will remain static from the competitive standpoint. Several smaller companies are in pursuit of regulatory approvals for their surgical robots, but it will take much more than just a cheaper robot to challenge Intuitive’s dominance. Stryker’s acquisition of Mako Surgical a few years ago made it a noteworthy competitor, but even that product has struggled in the market.

“Longer-term, joint ventures such as [Verb] between Johnson & Johnson and Alphabet [Google], may produce meaningful competition, but that is too far in the future. That said, the overall market is not static at all – growth in the number of robotic surgery procedures is on the order of 20 percent year over year, and it is expected to continue to grow at this pace in the coming years.

“Generally speaking, other than in the surgical robotics market, the combination of technology immaturity, lack of awareness/adoption, high pricing, and lack of reimbursement does not paint an overly positive picture in the next 12-24 months. Longer term, we see a lot of upswing potential, and project that the prosthetic robotic devices will be a $1.9 billion market by 2025, with the largest share contributed by the developed countries in Europe and the U.S., with China exhibiting the largest percentage growth in that period.

“Unlike the prosthetics market, the therapeutic robotics market is less sensitive to the availability of insurance reimbursement for individuals. Our market projections for therapeutic robotics indicate the market size will be in the $1.7 billion range by 2025.”

We may see some blips of life beginning late in 2017. Please join our webcast for a fascinating journey into the world of healthcare disruption at the hands of robots.

Healthcare Robotics to the Rescue: Life-changing Encounters with Machines

Joining me will be Maryanna Saenko, automation analyst for Lux Research, together with insights from Maryanna’s most recently completed research study: