Michael Barbella, Managing Editor05.17.21
Forget the pandemic. Medtech’s lackluster M&A environment proved more challenging for Geoff Martha in the last 12 months.
Ostensibly, there may be no comparing the two, but the first-time CEO nevertheless credits his predecessor’s transition plan with helping mitigate the complexities of pandemic management. Considerably more difficult (and stressful), according to Martha, was fostering his company’s future growth through “tuck-in” earlier-stage deals.
Medtronic plc has historically gained market share by acquiring smaller firms that either augment or diversify its existing product platforms. In 2019, for instance, the multinational purchased Titan Spine for an undisclosed sum, expanding its ability to bundle interbody fusion devices, screws, rods, biologics, imaging, and surgical navigation into its orthopedic solutions. Similarly, Medtronic bolstered its chronic pain treatment platform last January (2020) by acquiring spinal cord stimulation developer Stimgenics and incorporating the firm’s waveform technology into its implantable neurostimulator device, Intellis.
The Stimgenics purchase was one of more than a half-dozen tuck-in deals Medtronic brokered last year to secure long-term gains amid plummeting profits. And while economic slumps tend to produce optimal deal-making conditions for large, capital-rich buyers, COVID-19’s downturn failed to trigger the kind of shopping extravaganza that occurred during the 2009 recession.
“There was very little liquidity crisis and the governments around the world, regulators around the world, made sure the banks [were] at a much healthier position, and there [was] quite a lot of liquidity,” Martha told online news portal Medtech Insight in March. “It wasn’t the heyday of M&A for somebody that’s an acquirer like us, as I thought it would be.”
Maybe not, but last year’s investment environment wasn’t a total bust, either: Medtronic conducted several tuck-in acquisitions to enhance its capabilities in robotic surgery, data analytics, and artificial intelligence (AI).
The purchase of London-based Digital Surgery, in particular, will enable Medtronic to expand its surgical robotics business and commercialize a soft tissue robot (Hugo) that could compete for market share with Intuitive Surgical’s da Vinci system.
Similarly, the $158 million pickup of French spinal implant firm Medicrea bolsters Medtronic’s offerings in both spine care and AI. Medicrea specializes in AI-driven surgical planning as well as digitally constructed spinal implants and robotic-assisted procedures. One of the company’s key products is its UNiD ASI pre-procedure platform for surgeons that uses predictive modeling algorithms to measure and digitally reconstruct patients’ spines. Built on a 6,000-case surgical database, UNiD ASI allows surgeons to better understand patient alignment (before surgery), customize surgical plans, and improve outcomes through personalized spinal implants.
Medtronic is integrating Medicrea’s technology into its Spine division, which has bulked up in recent years with the additions of Mazor Robotics and Titan Spine. While Medicrea clearly helps strengthen Medtronic’s spinal market presence, the deal also furthers the company’s strategic expansion into AI, machine learning (ML), and predictive analytics.
“To paraphrase Matthieu Ville [Medicrea’s Product and Marketing director], artificial intelligence...will create a breakthrough, fully integrated procedural solution...that will significantly help improve patients’ outcomes and reduce care cost...,” Peter Verrillo, co-founder and CEO of patient-driven technology firm Enhatch wrote in a LinkedIn post shortly after the Medtronic-Medicrea deal last July. “This is an incredible time to be in medical devices and the acquisition of Medicrea by Medtronic is a sign the future will be driven by artificial intelligence.”
The ride is off to a rather slow start, though. Other areas of medicine—mental health, cardiology, dermatology, and radiology—have embraced AI and ML technologies more rapidly than orthopedics. Antiquated AI regulations, algorithm bewilderment, and engineering challenges have been cited as barriers to wider adoption, but experts are confident the industry will eventually overcome these hurdles as companies realize the technology’s unlimited potential.
Some firms have already seen the proverbial light: Israeli startup Zebra Medical Vision Ltd. and DePuy Synthes, for instance, have partnered to develop algorithms for creating 3D models from X-rays. In addition, Zebra’s CE-marked AI Vertebral Compression Fracture product uses AI to assess osteoporosis risk and bone mineral density values. It also employs ML to assess the risk, as well as the existence of osteoporotic fractures by classifying and correlating various bone density scores, emulating dual energy X-ray absorptiometry scores and analyzing bone structure.
In February 2021, Salt Lake City-based OrthoGrid received FDA clearance for the OrthoGrid Hip, a distortion-correcting, implant-agnostic intraoperative-alignment technology for direct anterior total hip arthroplasty offered on the firm’s AI-enabled digital platform.
And Zimmer Biomet Holding Inc. has developed an orthopedic intelligence platform (OrthoIntel) that connects the pre-, intra- and post-operative data gathered through the company’s mymobility application and ROSA Knee offerings to uncover new clinical insights during care. The insights aim to help clinicians make informed decisions and optimize care.
“The goal,” said Liane Teplitsky, vice president and general manager, Worldwide Robotics at Zimmer Biomet, “is to help surgeons improve outcomes and patient satisfaction.”
Ostensibly, there may be no comparing the two, but the first-time CEO nevertheless credits his predecessor’s transition plan with helping mitigate the complexities of pandemic management. Considerably more difficult (and stressful), according to Martha, was fostering his company’s future growth through “tuck-in” earlier-stage deals.
Medtronic plc has historically gained market share by acquiring smaller firms that either augment or diversify its existing product platforms. In 2019, for instance, the multinational purchased Titan Spine for an undisclosed sum, expanding its ability to bundle interbody fusion devices, screws, rods, biologics, imaging, and surgical navigation into its orthopedic solutions. Similarly, Medtronic bolstered its chronic pain treatment platform last January (2020) by acquiring spinal cord stimulation developer Stimgenics and incorporating the firm’s waveform technology into its implantable neurostimulator device, Intellis.
The Stimgenics purchase was one of more than a half-dozen tuck-in deals Medtronic brokered last year to secure long-term gains amid plummeting profits. And while economic slumps tend to produce optimal deal-making conditions for large, capital-rich buyers, COVID-19’s downturn failed to trigger the kind of shopping extravaganza that occurred during the 2009 recession.
“There was very little liquidity crisis and the governments around the world, regulators around the world, made sure the banks [were] at a much healthier position, and there [was] quite a lot of liquidity,” Martha told online news portal Medtech Insight in March. “It wasn’t the heyday of M&A for somebody that’s an acquirer like us, as I thought it would be.”
Maybe not, but last year’s investment environment wasn’t a total bust, either: Medtronic conducted several tuck-in acquisitions to enhance its capabilities in robotic surgery, data analytics, and artificial intelligence (AI).
The purchase of London-based Digital Surgery, in particular, will enable Medtronic to expand its surgical robotics business and commercialize a soft tissue robot (Hugo) that could compete for market share with Intuitive Surgical’s da Vinci system.
Similarly, the $158 million pickup of French spinal implant firm Medicrea bolsters Medtronic’s offerings in both spine care and AI. Medicrea specializes in AI-driven surgical planning as well as digitally constructed spinal implants and robotic-assisted procedures. One of the company’s key products is its UNiD ASI pre-procedure platform for surgeons that uses predictive modeling algorithms to measure and digitally reconstruct patients’ spines. Built on a 6,000-case surgical database, UNiD ASI allows surgeons to better understand patient alignment (before surgery), customize surgical plans, and improve outcomes through personalized spinal implants.
Medtronic is integrating Medicrea’s technology into its Spine division, which has bulked up in recent years with the additions of Mazor Robotics and Titan Spine. While Medicrea clearly helps strengthen Medtronic’s spinal market presence, the deal also furthers the company’s strategic expansion into AI, machine learning (ML), and predictive analytics.
“To paraphrase Matthieu Ville [Medicrea’s Product and Marketing director], artificial intelligence...will create a breakthrough, fully integrated procedural solution...that will significantly help improve patients’ outcomes and reduce care cost...,” Peter Verrillo, co-founder and CEO of patient-driven technology firm Enhatch wrote in a LinkedIn post shortly after the Medtronic-Medicrea deal last July. “This is an incredible time to be in medical devices and the acquisition of Medicrea by Medtronic is a sign the future will be driven by artificial intelligence.”
The ride is off to a rather slow start, though. Other areas of medicine—mental health, cardiology, dermatology, and radiology—have embraced AI and ML technologies more rapidly than orthopedics. Antiquated AI regulations, algorithm bewilderment, and engineering challenges have been cited as barriers to wider adoption, but experts are confident the industry will eventually overcome these hurdles as companies realize the technology’s unlimited potential.
Some firms have already seen the proverbial light: Israeli startup Zebra Medical Vision Ltd. and DePuy Synthes, for instance, have partnered to develop algorithms for creating 3D models from X-rays. In addition, Zebra’s CE-marked AI Vertebral Compression Fracture product uses AI to assess osteoporosis risk and bone mineral density values. It also employs ML to assess the risk, as well as the existence of osteoporotic fractures by classifying and correlating various bone density scores, emulating dual energy X-ray absorptiometry scores and analyzing bone structure.
In February 2021, Salt Lake City-based OrthoGrid received FDA clearance for the OrthoGrid Hip, a distortion-correcting, implant-agnostic intraoperative-alignment technology for direct anterior total hip arthroplasty offered on the firm’s AI-enabled digital platform.
And Zimmer Biomet Holding Inc. has developed an orthopedic intelligence platform (OrthoIntel) that connects the pre-, intra- and post-operative data gathered through the company’s mymobility application and ROSA Knee offerings to uncover new clinical insights during care. The insights aim to help clinicians make informed decisions and optimize care.
“The goal,” said Liane Teplitsky, vice president and general manager, Worldwide Robotics at Zimmer Biomet, “is to help surgeons improve outcomes and patient satisfaction.”