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Sunday, 12 November 2017 15:37

Stryker ‘very bullish’ on surgical robots

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Stryker Corp. acquired Mako Surgical Corp. for $1.65 billion four years ago. Since then, the Kalamazoo-based med device company has expanded the capabilities of the Mako surgical robot. Stryker Corp. acquired Mako Surgical Corp. for $1.65 billion four years ago. Since then, the Kalamazoo-based med device company has expanded the capabilities of the Mako surgical robot. Courtesy Photo

KALAMAZOO — The early success for Stryker Corp.’s surgical robot that’s now used in total knee replacement surgeries reflects a growing acceptance of the technology.

Last spring, the Kalamazoo-based Stryker (NYSE: SYK) fully launched a total knee replacement application using the Mako surgical robot, a technology that previously had been used for total hip and partial knee replacement.

The launch of total knee replacement with Mako underscores the growing role surgical robots are playing in health care.

“The story has completely changed, and now no one is doubting whether robotics are here to stay,” Stryker President and CEO Kevin Lobo told brokerage analysts during a recent conference call to discuss quarterly results. “It’s only a question of which robot and when do we get on board with robotics. And that’s a sea change versus even a year and a half or two years ago.”

Lobo said he was “very bullish” about the future of the robotics technology. Demand for the Mako robot “continues to be very strong,” Lobo said.

“Disruptive technologies take a little while to take hold, as you’ve seen in other parts of health care,” he said. “And this is one that’s really starting to take hold now.”

The launch of the Mako surgical robot application for total knee procedures came four years after Stryker bought Ft. Lauderdale, Fla.-based Mako Surgical Corp. for $1.65 billion.

Stryker sold 33 Mako robots in the third quarter, 23 of them in the U.S. The company continues to update existing robots with its total knee application, said Katherine Owen, Stryker’s vice president of strategy and investor relations.

Outcomes measured at the six-month mark from launch found scores for pain, physical function and total patient satisfaction compared “statistically significantly better for patients undergoing total knee (replacement) with Mako” versus patients who had traditional knee replacement, Owen said.

In a March story in the online publication MedCityNews.com, Stryker Vice President and General Manager Stuart Simpson said partial knee replacement procedures using the Mako robot had 36 percent fewer 30-day complications. The cost of complications and hospital readmissions for Mako cases were 66 percent lower than non-Mako cases, Stuart told MedCityNews.

STRONG DEMAND EXPECTED

The online publication also noted an RBC Capital Markets survey that found orthopedic surgeons expect strong demand for surgical robotic systems and that Stryker would lead the U.S. market for total hip and knee robotic replacement.

Since Stryker added total knee replacement last spring, some 600 surgeons trained on the Mako robot had performed about 9,400 procedures through the end of the third quarter, Owen said. Total knee procedures with the Mako robot grew 50 percent from the second quarter to the third quarter, she said.

Stryker plans to continue to invest in training surgeons and in clinical studies that show the benefits of the surgical robot, which has further orthopedic applications beyond knee and hip joints.

“We do believe that there’s going to be opportunities in spine and shoulders and other areas,” Owen said. “But right now, we are really focused on ensuring that we have a very successful launch of the total knee. We only have one chance to get this right, and we feel really pleased with the trajectory around there. But we will also be looking at other applications because we do think there are opportunities outside of hips and knees.”

POSITIONED FOR GROWTH

Lobo said he was particularly encouraged to see the Mako robot’s deployment occurring across various settings, from hospitals to academic teaching centers, and rural hospitals and outpatient ambulatory surgery centers.

Total knee replacement presently is “a very small part of the overall procedures that are done in surgery centers,” Lobo said, although he added that “I do think it’s a trend that will continue going forward. And I think we’ll be well-positioned to compete in the surgery centers as we are in the hospitals.”

Stryker updated analysts on the Mako system as it reported results for the third quarter.

Stryker Corp. recorded quarterly revenues of $3 billion for the period that ended Sept. 30, a 6.1-percent increase from the same period a year earlier. The company reported net income of $434 million, or $1.14 per diluted share, a 22-percent increase from $355 million, or 95 cents per diluted share, in the third quarter of 2016.

Nine-month sales grew nearly 10 percent to $8.97 billion compared to a year earlier with net income of $1.13 billion, or $3.01 per diluted share.

Stryker said it expects full-year sales growth of 6.5 percent to 7 percent for 2017 with adjusted net earnings of $6.45 to $6.50 per diluted share. 

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Mark Sanchez

Senior Writer

msanchez@mibiz.com

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