Success can put a company under a financial microscope very quickly, as Ft. Lauderdale-based MAKO Surgical Corporation (NASDAQ:MAKO) found out recently with its popular MAKOplasty surgical solution product. RBC Capital analyst Glenn Novarro broke news that surgeons are not interested in the MAKOplasty knee surgery system, citing high cost. The analyst advised against buying and MAKO?s shares slumped at the news $1.78, or 4.91%, to $34.50 (52wk high and low: 43.00 and 17.42).
MAKO Surgical Corp., a medical device company, markets its advanced robotic arm solution and orthopedic implants for orthopedic procedures in the United States and internationally. MAKOplasty, introduced in 2011, is MAKO’s patented RIO Robotic Arm Interactive Orthopedic System, which is designed to support a surgeon’s ability to more accurately align and position a hip implant.
On the positive side, Piper Jaffray rated MAKO a buy, saying MAKO?s ?hip launch is about 2 months earlier than anticipated and pricing is expected to be favorable, and the firm believes the Street is underestimating MAKO hip opportunity.? William Blair & Company concurred, reporting that the perceived weakness has made for a buying opportunity. Blair added news of a competitive robotic system from Stryker (SYK) could be introduced within six months, but it expects Stryker will encounter great difficulty competing with MAKO?s broad intellectual and patent holdings with RIO and MAKOplasty.
RBC?s Novarro, attending the annual meeting of the American Academy of Orthopedic Surgeons, or AAOS, furthered that ?the tone at AAOS suggests that the U.S. orthopedic reconstructive surgery market is stable, and may even be slightly improving. U.S. reconstructive surgery volume growth could increase slightly in the second half of 2012.
Seemingly weathering the flap quite well, MAKO?s CEO Dr. Maurice Ferre is upbeat, saying that there?s a great need for ?precision and accuracy in total hip replacement. We believe RIO and MAKOplasty are key drivers in leading our growing presence in orthopedic surgery.?
And he?s got the sales to back it up. MAKO sold 18 of its RIO surgical platform systems during Q4 vs. 13 systems sold in the same period a year ago. And, counter to Navarro?s comments to the contrary, there are still lots of surgeons who use MAKO systems: Ferre says ?2,258 MAKOplasty procedures were performed in Q4, a 25% increase quarter to quarter, and a 97% gain Y/Y. Ferre anticipates selling 56 to 62 RIO systems and seeing 11K to 13K MAKOplasty procedures performed in 2012.