IMRIS Inc. (TSX:IM), a provider of neurosurgical, neurovascular, and cardiovascular interventional suites that incorporate real-time imaging systems, continued a string of positive news with the acquisition of NeuroArm Surgical Ltd. (NASL), a privately held developer of magnetic resonance-compatible neurosurgical robot technology. IMRIS will issue 1.6 million common shares, worth somewhere north of $10.7 million, to acquire all of NeuroArm’s technology, patents, and associated intellectual property. The announcement of the acquisition was made on February 4, 2010 and closed the next day.
In a teleconference announcing the acquisition, company officials issued the typical blandishments for analysts and institutional investors, observing that the purchase was a “major step forward” and the technology would “increase neurological precision.” The kicker, however, came when officials noted, “To management’s knowledge, it is the only surgical robot in the world that a surgeon can use together with a magnetic resonance scanner in the operating room.”
Now that’s something, particularly coming from a company whose expertise lies in incorporating on-demand magnetic resonance, fluoroscopy, and computed tomography imaging during medical procedures. The fact that IMRIS’ primary competitors–General Electric and Royal Phillips Electronics–do not offer solutions that incorporate MR imaging in the operating room, speaks to the exclusivity of the solution.
In addition to NASL acquisition, IMRIS also inked a memorandum of understanding (MOU) with MacDonald Dettwiler and Associates (MDA) to create the next generation, commercial version of the surgical system. MDA, a Canadian space engineering company best known in the robotics field as the developer of the space shuttle’s Canadarm, collaborated closely with Garnette Sutherland, a University of Calgary Professor of Neurosurgery, on the development of the current NeuroArm prototype. That NeuroArm system, which is housed in Foothills Hospital, Calgary, Canada, is integrated with an IMRIS IMRISneuro suite. It was first used for used for surgery in spring 2008. Sutherland, by the way, was also the co-developer of IMRISneuro, which was also first employed at Foothills Hospital.
So, the story so far includes a novel technology that is exclusive to IMRIS, deep domain expertise and engineering skills, protected intellectual property, strong partners, and a social need (better neurosurgical procedures). But let’s not forget that partners IMRIS and MacDonald Dettwiler and Associates have deep pockets. The government of Canada also has reason for the enterprise to succeed. In fact, the development of the NeuroArm was heavily funded by the Canada Foundation for Innovation, Alberta Advanced Education and Technology, Western Economic Diversification Canada, and other governmental and private donors.
Even without the NASL acquisition, IMRIS was on a winning streak, particularly beginning in 2009. On January 8, 2010 IMRIS gained regulatory approval from the Korea Food & Drug Administration allowing it to begin marketing the IMRISneuro systems in South Korea. This was preceeded by a series of approvals from Health Canada (IMRISNV and IMRIScardio – 10/2009), the US Food and Drug Administration (IMRISNV and IMRIScardio – 9/2009), and Japan’s Ministry of Health (IMRISneuro – 5/2009). Interspersed in time among these approvals were a number of contract wins for IMRIS interventional suites, including first sales in Europe, Australia, and China.
All this good news was reflected in the IMRIS fourth quarter earning statement released February 8, 2010. The company boasted of Q4 sales that were 247 percent greater than Q4 2008, making it the company’s first profitable quarter. A number of other indicators, including strong growth in customer orders, were also positive.