TransEnterix Inc. is raising $50 million from public markets while waiting for approval from the U.S. Food and Drug Administration for its SurgiBot System. The company plans to use the money to hire sales and clinical representatives to support the surgical robot.
The SurgiBot is intended to allow for minimally invasive surgery but keeps the surgeon at the patient’s side. Laparoscopic surgery can reduce scarring, the risk of infection, and the length of hospital stays. The robot is also designed to be mobile between operating rooms, reduce the need for multiple staffers, and be cost-effective for surgical facilities, said the company.
“Robotically enhanced laparoscopy with the SurgiBot System represents the first surgical platform designed to address economic and clinical challenges associated with current laparoscopic and robotic options,” said TransEnterix President and CEO Todd Pope.
SurgiBot provides motorized hand controls with tactile feedback, precision, and freedom. It also allows surgeons to control multiple instruments via flexible channels and includes 3D, high-definition monitors.
Other benefits of SurgiBot are that it keeps surgeons physically close to patients and that it is relatively easy to use, said members of a panel at April’s Society of Gastrointestinal and Endoscopic Surgeons (SAGES) annual meeting in Nashville, Tenn.
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Money on the table
TransEnterix plans to charge about $500,000 for the SurgiBot, which is much less than the $1 million to $2 million that Intuitive Surgical asks for its da Vinci system. Out of the more than 3,000 da Vinci systems installed so far, more than 2,000 of them are in the U.S. The market for assistive surgery gear will grow from $3.2 billion in 2014 to $20 billion by 2021, predicts Wintergreen Research Inc.
The SurgiBot won’t compete directly with the da Vinci because it will be used for more common procedures such as gallbladder removal, said Pope. TransEnterix is also offering it as a service, with contracts costing $100,000 to $170,000 per year.
In addition, Morrisville, N.C.-based TransEnterix plans to sell 16.7 million shares at $3 each in the public market and has granted underwriters 30 days to buy up to 2.5 million additional shares of common stock. Stifel and RBC Capital Markets are jointly managing book-running, and BTIG, Ladenburg Thalmann, and Raymond James are co-managers for the offering.
TransEnterix’s (NYSE MKT: TRXC) market value fell from $320 million to $220 million in the past month, but it has a market cap of $229 million and employs about 100 people in Research Triangle Park.
