GlobeNewswire01.05.22
Surgalign Holdings Inc. has acquired an equity interest in Inteneural Networks Inc. (INN), and its proprietary artificial intelligence (AI) technology for autonomously segmenting and identifying neural structures in medical images and helping identify possible pathological states. The company will also have the ability to acquire the remainder of INN’s outstanding equity interests upon the achievement of certain regulatory, developmental, and revenue-based commercial milestones. In June of 2021, the company and INN entered into a strategic collaboration agreement during which time the company evaluated INN’s technology for future integration within the company’s digital platform.
“Our work with the team at INN has allowed us to fully appreciate the power of their AI technology and recognize this transaction will advance the vision of both organizations as we work to become a key player in applying AI and machine learning (ML) to healthcare,” said Terry Rich, Surgalign’s president and CEO. “This combination brings another foundational piece to our development efforts and accelerates our work to bring intercranial functionality to the HOLO™ technology platform. This marks our first of many expansions outside of spine surgery and the operating room.”
INN is developing technology that harnesses ML and AI to autonomously and accurately identify and segment neural structures in medical images and integrate specific reference information regarding possible pathological states to physicians caring for patients. This technology could have future applications in neurosurgery as well as the potential to address a wide variety of potential disorders, including dementia, autism, tumors, aneurysm, stroke, and neurovascular structures using magnetic resonance imaging and computed tomography platforms.
“Both HOLO and INN are based on technologies that incorporate highly efficient AI approaches. I am not aware of comparable AI technologies on the market today. The combination of these two technologies has the potential to make Surgalign an AI powerhouse and one of the most exciting and promising AI companies in healthcare,” said Professor Paul Lewicki Ph.D., a pioneer in big data learning/data mining and co-founder and President of INN.
“The potential of combining these two independent technology platforms would give Surgalign the best of both worlds in terms of deploying a complete pre-, intra-, and post-operative digital solution,” said Kris Siemionow, MD, Ph.D., and co-founder and CEO of INN.
“This deal provides a significant technological impact to our digital health portfolio as we invest in our long-term vision for HOLO,” said Marc Mackey, Executive Vice President of Digital Surgery at Surgalign. “Ultimately, this transaction adds capabilities to our portfolio that otherwise would have taken a large team of employees several years to achieve. It’s a huge step forward towards realizing our goal of becoming a leader in applying AI & ML technology to deliver better healthcare.”
“Our work with the team at INN has allowed us to fully appreciate the power of their AI technology and recognize this transaction will advance the vision of both organizations as we work to become a key player in applying AI and machine learning (ML) to healthcare,” said Terry Rich, Surgalign’s president and CEO. “This combination brings another foundational piece to our development efforts and accelerates our work to bring intercranial functionality to the HOLO™ technology platform. This marks our first of many expansions outside of spine surgery and the operating room.”
INN is developing technology that harnesses ML and AI to autonomously and accurately identify and segment neural structures in medical images and integrate specific reference information regarding possible pathological states to physicians caring for patients. This technology could have future applications in neurosurgery as well as the potential to address a wide variety of potential disorders, including dementia, autism, tumors, aneurysm, stroke, and neurovascular structures using magnetic resonance imaging and computed tomography platforms.
Deal Rationale
- The integration of INN’s innovative ML and AI technologies positions the Company as a leader in intelligent digital health.
- By bringing INN’s intercranial capabilities to the HOLO platform, the Company can expand the applicability of HOLO into significant segments beyond spine, in particular neurosurgery.
- Importantly, this transaction materially contributes to the Company’s mission to improve patient’s lives through better outcomes.
- The synergies in the research and development and eventual commercial functions should provide for a particularly efficient integration of INN’s technology and talent.
“Both HOLO and INN are based on technologies that incorporate highly efficient AI approaches. I am not aware of comparable AI technologies on the market today. The combination of these two technologies has the potential to make Surgalign an AI powerhouse and one of the most exciting and promising AI companies in healthcare,” said Professor Paul Lewicki Ph.D., a pioneer in big data learning/data mining and co-founder and President of INN.
“The potential of combining these two independent technology platforms would give Surgalign the best of both worlds in terms of deploying a complete pre-, intra-, and post-operative digital solution,” said Kris Siemionow, MD, Ph.D., and co-founder and CEO of INN.
Deal Terms
On December 30, 2021, the company acquired 42 percent of the outstanding equity of INN for $21 million, consisting of $5 million in cash, promissory notes of approximately $10.6 million and the company’s common stock valued at approximately $5.4 million. Upon achievement of certain regulatory, developmental, and revenue-based commercial milestones, the Company will have the ability to acquire the remaining 58 percent of INN in three equal tranches through 2027. The total consideration payable by the company for 100 percent of INN’s outstanding equity interests, assuming the achievement of all milestones, would be $79 million. The company will initially receive a non-exclusive royalty-free license to the INN technology. Upon the future acquisition of a majority of INN’s outstanding equity interests, the license to INN’s technology would become perpetual.“This deal provides a significant technological impact to our digital health portfolio as we invest in our long-term vision for HOLO,” said Marc Mackey, Executive Vice President of Digital Surgery at Surgalign. “Ultimately, this transaction adds capabilities to our portfolio that otherwise would have taken a large team of employees several years to achieve. It’s a huge step forward towards realizing our goal of becoming a leader in applying AI & ML technology to deliver better healthcare.”