July 20, 2016      

As part of broadening its portfolio, orthopedic device maker Zimmer Biomet Holdings Inc. is acquiring surgical robotics provider Medtech SA for about $132 million.

Montpelier, France-based Medtech Rosa’s robotic arm is used for minimally invasive brain and spine surgery. Rosa has six degrees of freedom, provides haptic feedback to surgeons, and uses laser measurements for touch-free registration or navigation in the skull.

In January, the U.S. Food and Drug Administration (FDA) approved Medtech’s spinal system, which had received a CE mark in 2014. The FDA previously approved Rosa for brain surgery in 2012.

Medtech also provides training and tech support to its users in 20 hospitals worldwide. The company was founded in 2002, and its revenue increased by 73 percent to €11.2 million ($12.3 million) in the past fiscal year.

This corresponds with the growing global market for surgical robotics, which will nearly double from $3.3 billion in 2014 to $6.4 billion in 2020, according to Allied Market Research.

Although the need for training and high costs remain barriers to adoption, medical industry analysts agree that robotic-assisted surgery can be faster and safer than conventional procedures. Improvements in the technology, such as miniaturization and a wider range of applications, are also helping.

Zimmer Biomet builds on joint projects

Warsaw, Ind.-based Zimmer Biomet makes artificial knees, dental implants, and other musculoskeletal products. It has offered to buy a 58.77 percent stake in Medtech.

Zimmer and Biomet merged last year in a $13.4 billion deal. The company this month also spent $1.07 billion on LDR Holding Corp. for its spinal technology.

Austin, Texas-based LDR’s Mobi-C cervical disk device is the only one of its kind with FDA approval and has been implanted more than 30,000 times since 2004. The market for spine treatments is $10 billion, the companies said.

Zimmer Biomet also recently bought Cayenne Medical Inc., a Scottsdale, Ariz.-based company that makes soft-tissue systems for joint repairs.

Zimmer Biomet’s purchase of Medtech is pending French regulatory approvals. It plans to make Medtech’s headquarters into a center for surgical robotics research.

A medical robotics rush

Although there is plenty of room for adoption of surgical robotics, industry leaders such as Intuitive Surgical Inc. and Stryker Corp. are getting competition from larger medical companies.

Verb Surgical logo

For instance, Google parent Alphabet Inc. is working with Johnson & Johnson as Verb Surgical to make surgical robots smaller, cheaper, and easier to use.

Among other moves, Dublin, Ireland-based Medtronic PLC has partnered with Mazor Robotics Ltd., just as the Israel-based company released a new guidance system for spinal surgery. Medtech’s Rosa could be the beginning of direct competition.

Smaller companies are also partnering up to compete. In April, Toronto-based rehabilitation supplier Bionik Laboratories Corp. acquired Interactive Motion Technologies Inc., a Boston-based robotics company.

In addition, Restoration Robotics Inc., which makes the ARTAS hair-restoration robotic system, raised $4.82 million in equity funding.

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