COMPASS Research Report | Page 46

Page 43

Table 21 : Approval status for marketed and developmental robotic surgery systems Year System CE FDA

Source : goetzpartners Research

Lower cost units may cause Intuitive to rethink their strategy and offer lower cost devices .

We see difficulty for competitors with Intuitive Surgical monopoly continuing

As capital costs decrease , wider adoption will lead to larger companies moving in As patents expire and costs decrease , large med-tech companies will enter the market . Although initially critical of the potential for robotically assisted procedures , perhaps due to their significant vested interest in conventional laparoscopic tools , both J & J and Medtronic have announced their intention to enter the market through new proprietary systems currently in late-stage development . However , they have both struggled to enter the market and as generally risk averse may limit their investment if Intuitive ’ s dominance continues . As opposed to generating costly in-house technologies and IP , strategy has focused on adopting robotic surgery programs through bolt on acquisitions , de-risking development . Both companies have deep pockets for R & D activities , and synergies with subsidiary companies Covidien and Ethicon will provide potential to leverage product loyalty . Smaller companies are developing innovative features such as integrated OR systems and smaller robots that are add-in ’ s to existing theatres . Moon Surgical ’ s system is targeting this to drive down costs and increase adoption .

Deal flow shows the potential market growth A recent surge in M & A activity within surgical robotics has led to an overall increase in valuations across the sector . Strategic acquisitions have been particularly prevalent with J & J most recently acquiring Auris Health for $ 3.4bn , Medtronic acquiring Israeli company Mazor Robotics at an enterprise value of $ 1.7bn and Siemen ’ s Healthineers acquiring Corindus Vascular Robotics for c .$ 1.1bn ( which completed in 2019 ) ( Table 22 ). Large players are increasingly acquiring smaller targets with products that complement their portfolios such as Medtronic ’ s acquisition of Digital Surgery with their touch surgery training app for budding surgeons .

Please see analyst certifications , important disclosure information , and information regarding the status of analysts on pages 91-94 of this research report .