Since its founding 15 years ago, Mazor Robotics (NASDAQ, TASE:MZOR) has overcome challenges typical to medical device startups to become the leader and possibly the standard of care in spine robotics surgery.
“For many early years, adoption of our technology was very slow because we put much more effort into improving the technical aspects of our systems, without focusing on the experience of surgeons using our systems,” Ori Hadomi, CEO, says in an interview with BioTuesdays.
“When we began work more with surgeons to promote the user friendly experience of our systems, we reached a turning point in how we looked at development of our products,” he recalls. “It made us realize that realizing our mission of healing through innovation and helping patients would require focus beyond improving our technology.”
Mr. Hadomi also points out that as a pioneer in spine robotics, the company was educating the market and raising awareness. "We have successfully shifted the question from whether or not a robot is necessary in the spine OR to an understanding that this is the future."
Today, Mazor’s core technology has evolved with three generations of commercial products. They include SpineAssist, which was approved by the FDA in 2004; the Renaissance Guidance System, which was launched in 2011 and is installed in four continents; and the Mazor X Surgical Assurance platform, which was launched in the U.S. in mid-2016 and received CE mark approval in Europe last month.
Mr. Hadomi explains that Renaissance is an easy-to-use trajectory guidance system for spine and brain surgeries, while Mazor X is a state-of-the-art surgical platform with pre-op analytics and intra-op guidance for spinal procedures.
As a result, the company now has more than 100 robotic systems in clinical use worldwide. And they have been used in more than 25,000 patient procedures as well as for placing 150,000 implants, he adds.
Mr. Hadomi says that with the arrival of the Renaissance robotic system, Mazor made a key decision by establishing two teams in the company: one focused on direct sales and the other targeting supporting assimilation of the technology and supporting surgeons with their cases.
“This developed a high level of trust with surgeons and supported adoption of Renaissance in the operating room,” he recalls. “So, what took us 10 years with our first generation product, took us three years with Renaissance.”
As the company was working on adoption of Renaissance through a direct sales force in the U.S. and distributors globally, it was developing the Mazor X robotic system, which “moved us in a whole new direction, expanding the role of robotics beyond just guidance,” Mr. Hadomi points out.
To realize the potential of the Mazor X breakthrough, the company decided to partner distribution of the new robotic system. “We wanted a deal that would accelerate our growth but only with a partner that would make Mazor X a strategic product in their portfolio,” Mr. Hadomi points out.
In mid-2016, Mazor inked a commercial investment agreement that made Medtronic (NYSE:MDT) the exclusive global distributor of the Mazor X platform.
The strategy seems to be working. Earlier this month, Mazor said it expects to report record revenue of about $17.2-million for the third quarter this year. For the first half of 2017, revenue rose to $27.2-million from $14.7-million a year ago.
Mazor received orders for 22 systems in the third quarter from customers in the U.S., Asia and Israel, of which 19 were for the $1.2-million Mazor X system and three were for Renaissance by Mazor’s distributor in China. Eleven of the 19 orders were by Medtronic, of which five were delivered in the quarter.
As of Sept. 18, 2017, Medtronic assumed full responsibility for the distribution of the Mazor X system, as part of the second phase of the commercial agreement between the companies. Medtronic also made a further $40-million equity injection in Mazor, raising its total investment to $72-million.
Mazor's system backlog at the end of the third quarter was 17 systems, consisting of 15 Mazor X and two Renaissance systems.
Mr. Hadomi says that during the third quarter, Mazor transferred approximately 30 members of its sales team along with its sales pipeline to Medtronic. “The transition was performed in a smooth and effective manner and we maintained a robust sales activity during the transition period,” he adds.
Earlier this month, Mazor hired Ron Tavlin, a former consultant supporting Medtronic ventures and corporate development teams, as VP of business development.
According to Mr. Hadomi, Mr. Tavlin will lead the implementation of strategies to develop Mazor’s business beyond its current spine focus as “we pursue our goal of being the leader in image-based medical robotics.”
Specifically, he says the company will continue to focus on bone anatomy, “exploring internal and external innovations.”