Mazor Robotics (NSDQ:MZOR) said today that it won CE Mark approval in the European Union for its Mazor X robot-assisted surgery platform, setting the stage for strategic backer Medtronic (NYSE:MDT) to put the device on the European market.
“Receipt of the CE Mark is an important step in our plan to expand the patient, surgeon and hospital benefits of the Mazor X surgical assurance platform to the European market,” CEO Ori Hadomi said in prepared remarks. “Our commercial partner for the Mazor X, Medtronic, will be responsible for marketing and selling the system in Europe and we look forward to working with them to ensure a successful launch.”
Last week the companies announced a third, $40 million investment in the Israeli surgical robotics concern for Fridley, Minn.-based Medtronic, which spent $72 million acquiring a 10.6% stake in Mazor plus the sales & marketing rights for Mazor X. The deal also includes 1.21 million warrants priced at $44.23 apiece; if exercised in full Medtronic would own a 14.2% stake in Mazor, having invested some $125 million.
A year ago Medtronic paid $20 million for a 3.4% stake as part of a two-stage deal struck in May of that year. The first phase of the deal called for Medtronic to acquire 15 Mazor systems in 2016 and made Medtronic Mazor’s sole partner for developing and commercializing robot-assisted spine surgery devices. The second phase called for a three-step equity investment; after the second step, triggered by the launch of the Mazor X system in July 2016, Medtronic had spent $31.9 million acquiring a 7.27% stake in Mazor.
The new terms of the deal set annual minimum Mazor X purchases that could mean hundreds of the systems over a four-and-a-half-year period and place about 30 Mazor sales reps under the Medtronic umbrella “to assure continuation of the current momentum,” Mazor said, noting that it will continue to service the installed base of Mazor X platforms.
Apart from shoring up the balance sheet, the deal is expected to slash Mazor’s annual operating expenses by $13 million, or about -25%, the company said.