Back in May, Mazor Robotics (MZOR), referred to by Seeking Alpha as “thinly” traded pioneer of robot-assisted spinal guidance systems, pulled off a gargantuan deal with Medtronic (MDT), the world’s largest medical technology development company, for an astounding total of $60 million distributed in three tranches of $20 million each.
Mazor shares jumped 23 percent on light volume in response to the May announcement.
Mazor just received the second tranche of $20 million. The third and last will become available to Mazor if certain benchmarks are achieved.
The May agreement actually consisted of two agreements: The first where Medtronic will co-promote Mazor’s product line plus joint and exclusive development and distribution of the robot-assisted spinal guidance systems; and a second agreement, whereby Medtronic takes an equity stake in the company. The second $20 million was designed to take place together with the announcement of the FDA-cleared Mazor X platform As part of the agreement, Medtronic has already placed a purchase order for 15 Mazor X systems.
In return, Medtronic took an initial 4 percent interest worth $11.9 million in Mazor. With this second $20 million tranche, Medtronic takes an additional 6 percent piece of Mazor’s outstanding shares; a potential third tranche comes available upon the global distribution of Mazor X at which time Medtronic can get another 5 percent of the company.
The agreement also specifies that Mazor will be Medtronic’s sole strategic partner for the development and commercialization of robotic spine systems and applications.
Mazor X is a guidance platform for spine surgeries. The tech was developed with the aim of “enhancing predictability and patient benefit, through the combination of analytical tools, multiple-source data, precision guidance, optical tracking, intra-op verification, and connectivity technologies,” Mazor explained in the July announcement. The tech is planned to launch in October at the North American Spine Society annual meeting in Boston.
See related: Mazor Robotics Key to Medtronic’s Surgical Expansion