17
DEVICES
&
IMPLANTS
Medtronic finalizes $1.7B Mazor acquisition — 5 key
notes on what to expect next
By Laura Dyrda
M
edtronic finalized the $1.7 bil-
lion acquisition of Mazor Robotics
aer making a series of invest-
ments over the past two years.
As one of the largest orthopedic deals com-
pleted in 2018, Medtronic plans to combine
its spinal implants, navigation and 3D imag-
ing technology with Mazor's robotic-assisted
spine surgery system.
"In bringing the two companies together
Medtronic aims to accelerate the advance-
ment and adoption of robotic-assisted surgery
in spine for the benefit of patients, providers
and healthcare systems more broadly," said
Executive Vice President and President of the
Restorative erapies Group at Medtronic
Geoff Martha. "is is the latest example of
our surgical synergy strategy, which we believe
will transform spine care through procedural
solutions that integrate implants, biologics and
enabling technologies like navigation, 3D im-
aging, robotics and powered surgical tools."
Five key points on what the company expects
for the future:
1. Medtronic predicts the transaction will
be modestly dilutive to the fiscal year 2019
adjusted earnings, and expects the company
to absorb the dilution. However, long term,
Medtronic projects the acquisition will gen-
erate double-digit return on invested capital
by year four.
2. e company is investing in robotic tech-
nology due to the potential for reduced
variability and refined procedures. Mazor
and Medtronic co-developed the Mazor X
Stealth Edition, incorporating Medtronic's
StealthStation with Mazor's robotics plat-
form, and it received FDA clearance. e
company expects to launch the Stealth Edi-
tion in 2019.
3. With the integration, Medtronic now offers
a procedural solution with surgical planning,
workflow, execution and confirmation.
4. According to a Star Tribune report, last year
Mazor told investors the technology would
cost $900,000, but current pricing wasn't dis-
closed in the acquisition announcement.
5. For the second quarter of the 2019 fiscal
year, Medtronic reported flat spine sales,
although the U.S. core spine business was
up in the mid-single digits. During the sec-
ond quarter conference call, CEO Omar
Ishrak reported the company was beating
expectations in robotics sales, according to
the transcript from Seeking Alpha. "I think
in the last quarter [we were] two times the
sales of our competition, and that is before
we've launched the Stealth Edition," he said.
"Of our robotic sales, 70 percent were place-
ments, meaning that the account chose to
pay for them, with incremental spine share
over the next three to four years. So these are
great leading indicators and then utilization
of the robot system is up 10 percent over the
last quarter." n
Zimmer Biomet & Stryker battle over $248M patent infringement
lawsuit: 5 things to know
By Mackenzie Garrity
S
tryker and Zimmer Biomet are heading back to feder-
al appeals court over the scope of damages award-
ed in an eight-year long patent infringement case,
according to Bloomberg Law.
Five things to know:
1. In December 2010, Stryker sued Zimmer Biomet for al-
legedly infringing on patents for Stryker's pulsed lavage
devices. A jury found Zimmer Biomet infringed on three
patents in 2013. Because Zimmer Biomet was found to
have willfully infringed, the court awarded Stryker triple the
amount in damages and attorneys' fees.
2. Zimmer Biomet was ordered to pay Stryker $248.7 mil-
lion. However, Zimmer Biomet is arguing the ordered pay-
ment is out of proportion to the scope of the infringement.
Zimmer Biomet has already paid Stryker $90.2 million.
3. The $248.7 million award is considered one of the larg-
est awards in a patent infringement case. Patent litigators
and experts are divided on whether or not Zimmer Biomet
will be able to overturn the ruling.
4. According to intellectual property attorney Paul
Ainsworth and law professor Timothy Holbrook, the chanc-
es the appeals court overturns the ruling are slim. "I'm not
sure that the Federal Circuit is going to delve that deep-
ly into the district court's analysis as it's discretionary," Mr.
Ainsworth told Bloomberg Law.
5. One the flip side, Michael Hawes, an intellectual prop-
erty partner, indicated Zimmer Biomet may be able to re-
duce its obligated payments. "Zimmer is making the argu-
ment you have to look at the egregiousness of the conduct
from the point of view of when it happened," Mr. Hawes
told Bloomberg Law. n
