Stryker ($SYK) announced FDA clearance to use the Mako robotic surgery system for total hip replacement, as well as the launches of a new bone matrix and spine-stabilizing cervical plate at the American Academy of Orthopaedic Surgeons Annual Meeting in Las Vegas.
The expanded indication for its Mako robot is a significant advance of the company's strategy to differentiate itself by offering most of its implants via the platform, which is supposed be more accurate and deliver better outcomes than traditional manual orthopedic surgery.
The total hip replacement approval means that the company can offer its femoral and acetabular implants via the Mako. Stryker said acetabular cup placement fell within a safe range only 50% of the time when implanted manually.
"Combining the Mako System's proprietary robotic-arm technology with Stryker's market-leading implants allows us to evolve the platform to enhance patient outcomes. This advancement reflects our conviction that this technology will transform joint reconstruction surgery," said the president of Stryker's reconstructive division, Bill Huffnagle, in a statement.
The company made a big bet on robotic surgery with its $1.65 billion acquisition of Mako Surgical in 2013. So far, the integration effort has gone slower than expected, but RBC Capital markets analyst Glenn Novarro is bullish, and projects robotic surgery to account for 11% of hip procedures in two years and 22% in ten years, according to MD+DI.
Despite the high price tag (the device costs about $1 million apiece), he's projecting increased uptake of the device in total and partial knee reconstruction as well. Stryker already uses the Mako to perform partial knee resurfacing, and is aiming to this year get FDA clearance to use the device for total knee construction. The partial knee application is one of the primary growth drivers of the company's knee business.
"Our plan is to have as many robots as possible all over the country, and then all of our implants will be placed using a robot, as many as possible. It's going to take a long, long time for that to happen. So standard instrumentation and standard implants are going to be put in by the majority of surgeons, but our goal is really to increase that run rate, increase the adoption," said Stryker CEO Kevin Lobo during the most recent earnings call.
During the last quarter of 2014, procedure volume on the robot increased by double digits year-over-year and an 20 additional units were shipped. More than 50,000 procedures have been performed on the Mako since 2006, with the first total hip surgery conducted in 2010.
Meanwhile, the company also said it is kicking off sales of its Bio4 bone matrix to encourage bone regeneration. "BIO4 is a new therapeutic alternative to autograft for foot and ankle surgery, which avoids secondary surgical sites necessary to harvest autograft tissue," said the general manager of Stryker's foot and ankle division in a statement.
And in third release Stryker said the Anterior Cervical Plating System for spine stabilization is going to debut soon in the $454 million U.S. market for anterior cervical plates.