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Actionable news in MZOR: Mazor Robotics Ltd.,

About Time Mazor Shifts To A Features Based Pricing

Summary

On May 18, 2016, Medtronic and Mazor agreed to work together to promote Mazor's next generation robotic spinal system, Renaissance.

The deal allows Medtronic to take an equity stake of up to 15% in Mazor.

This news led to a 24% single day rise in Mazor's stock price. The most since May 2009. Mazor Robotics is up 96.65% YTD.

The Medtronic deal gives Mazor a much needed shot in arm and enhances its stature in the fast growing market for surgical robots.

Mazor's management could use this opportunity to reassess their overall strategy, especially their product and pricing strategy.

MIPs and why surgical robots are here to stay

The evolution of surgery, from a 'risky' art form to an exacting and precise scientific discipline, was marked by numerous innovations. The Hippocratic Oath. Anesthesia. Organ Transplant. Blood Transfusion. The invention of Plaster of Paris. Along with these, one of the most significant innovations in the modern era was the development of the Minimally Invasive Procedure (MIP) - a term coined by John EA Wickham in 1984, who then wrote about it in the British Medical Journal in 1987.

Until the advent of MIP, surgeons (and anxious patients) were battling three principal obstacles - bleeding, pain and infection. Most surgeries, until then were 'open' surgeries, requiring large incisions which resulted in greater pain and slower recovery. In contrast, MIPs only required a tiny incision - tiny enough to be covered with a band-aid. This technique directly addressed the patient's anxieties since there was significantly lower pain, faster recovery and reduced chances of an infection. A MIP, however, relies heavily on imaging techniques for guidance and its this emphasis on precision that created the need for surgical robots.

With a fast increasing geriatric population (on the demand side) and AI aided medical technology (on the solutions side), the market for surgical robots is set to grow at a frenetic pace. This market is expected to reach USD 11.4 Billion by 2020 from USD 4.2 Billion in 2015 at a CAGR of 22.2% during the forecast period.

High profile new entrants and signs of consolidation

Earlier this month, Zimmer Biomet entered the surgical robots race by acquiring France's Medtech for an estimated $132 million. Medtech's product portfolio includes two surgical robots for minimally invasive brain and spine procedures dubbed the ROSA Brain and the ROSA Spine. The subject of this thesis, Mazor, received a much needed shot in arm after Medtronic agreed, on May 18, 2016, to help promote its flagship...


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