“On their own, these robots are just an impressive piece of kit, they don’t improve things without highly skilled surgeons to operate them — and there’s not enough of those.”Roger Kneebone, Professor, Surgical Education, Imperial College London
The robotic surgery space is being transformed by declining costs, new players entering the market, and the rise of technologies like AI and 5G. Even though the tech has been around for over 20 years, in many ways, it has remained in the early stages of adoption. But now, with several MedTech powerhouses entering the market and new technologies enabling better robotic systems, the industry looks set to be on the verge of a significant transformation.
The global surgical robotics market attained a value of around USD 5 billion in 2020. The market is further expected to grow at a CAGR of about 21% in the forecast period of 2023-2028 to reach a value of nearly USD 15 billion by 2026. While general surgery will remain the most advanced market, several indicators suggest orthopedics and neurosurgery will grow substantially. Despite significant advances and rising interest, there’s still plenty of room to grow: Today, around 44% of surgeons say they aren’t using robotics in hip replacement procedures at all. And more than a third of surgeons say they aren’t relying on robots during most of a knee replacement procedure.
As one might expect, these market growth projections have attracted many competitors. Here is a quick (admittedly high-level) look at some of the current competitive landscape in surgical robotics.
Intuitive Surgical – The 800lb gorilla in the room
Founded in 1995, Intuitive remains the dominant company in the robot-assisted surgery space with its Da Vinci robots. But there is a buzz around its Ion system, with its fully articulating catheter making its way through the lungs for cancer biopsy. Watch out for even more from Ion down the road. For example, Intuitive has obtained German regulatory approval for a clinical study of Ion ablation technology.
But it is facing challenges. For example, trade-ins of da Vinci robots are significantly down because there’s a lower volume of older-generation systems out there. There are also supply chain disruptions impacting the timing of system builds. Meanwhile, hospitals are feeling pressure on their spending.
Medtronic – Hugo
Hugo represents the medtech giant’s bid to take on Intuitive in the space. Medtronic announced last October that it received three significant global market entrance and indication expansion approvals for its Hugo surgical robotics system. The Fridley, Minnesota-based company won CE mark clearance for general surgery indication, a Health Canada license for general laparoscopic surgery indication, and Ministry of Health, Labor and Welfare approval for urologic surgical and gynecological laparoscopic indications in Japan. Hugo combines wristed instruments, 3D visualization, and Medtronic’s cloud-based surgical video capture and management solution, Touch Surgery Enterprise. The idea is to offer a multi-quadrant platform for a wide range of soft tissue procedures. In the robotic spine surgery space, Medtronic competes with its StealthStation navigation, O-arm, and Mazor systems.
Johnson and Johnson –
J&J made a major push into robotic surgery in 2019, when it paid $3.4 billion upfront for Auris and took complete control of the Verb joint venture it set up with Alphabet’s Verily a few years earlier. CSATS, which J&J bought in 2018, provides a video-based surgery assessment platform. Ethicon, as part of J&J, formed Verb with Verily in 2015. Since then, the company has been beset by delays, first in 2020, when it dropped plans to bring a Verb-Auris robot to the U.S. via the 510(k) pathway, and then in 2021, when it pushed back an anticipated launch by two years.
Focus seems to be the issue here. Johnson & Johnson is laying off around 350 people at its Auris Health and Verb Surgical robotic surgery units in California. Auris accounts for most of the cuts, with J&J laying off 292 of its employees across two sites, but 47 workers at Verb and 13 people from four other businesses are also heading to the exit. It’s tough to be one small part of a large company like J&J. You are constantly fighting for resources, R&D money, and attention. And if your division is underperforming, you are in trouble. Three hundred fifty loyal employees just found that out the hard way.
Mako sales were up 19% year-over-year in Q2 2022. But by the third quarter, company officials reported soft installation levels amid delays stemming from variability in the hospital environment. Stryker has also made good progress with the development of spine and shoulder applications for Mako. Stryker, in March 2022, announced the launch of its Insignia hip stem for total hip and hemiarthroplasty procedures. The Insignia stem is Mako-compatible. Stryker unveiled Mako Total Knee 2.0 at the AAOS 2023 Annual Meeting in Las Vegas. It designed the system to deliver the same trusted outcomes surgeons expect from Mako. However, informed by over 500,000 procedures, the system features a new, elevated user experience.
The company said 35 countries have Mako systems installed, with more than 1 million procedures performed worldwide. Stryker began a limited release for Mako Total Knee 2.0 in August 2022. It plans to continue a phased rollout in 2023, starting with the U.S. before launching globally in select markets. In addition to its Mako Total Knee 2.0, Stryker plans for two Mako launches in the — somewhat — near future. It plans to initially launch Mako Spine in the second half of 2024, followed by Mako Shoulder by the end of 2024.
Titan Medical – Exploring a sale of assets and now delisted from the NASDAQ
Titan said its board determined to prioritize the sale of all or a portion of its assets. That includes its IP portfolio of more than 235 patents and patent applications. It added further cost-cutting measures that included a layoff of 48 employees at its Chapel Hill-based subsidiary. Those layoffs included all employees furloughed in December. The layoffs left Titan with 18 remaining employees. Due to working capital limitations, Titan halted all expenditures on developing its Enos surgical robot. That included work on its FDA investigational device exemption (IDE) filing.
At the end of December 2022, Titan received notification of potential delisting from the Nasdaq market. The Nasdaq Listing Qualifications Staff notified the company of its continued non-compliance with the $1 minimum bid price requirement. After a Feb. 16 hearing, a Nasdaq panel decided to delist the company.
Asensus Surgical –
Asensus is looking to expand the use of its Intelligent Surgical Unit (ISU) called Luna, with plans for a full-scale commercial launch of 5 mm articulating instruments by the end of 2022. It’s also submitted a 510(k) application for pediatric clearance. In February, Asensus and KARL STORZ to Market the Intelligent Surgical Unit and Co-Develop New Vision and Instrument Platforms. The Companies intend to collaborate on developing next-generation instrumentation, and KARL STORZ intends to sell Asensus’ Intelligent Surgical Unit (ISU) as a standalone device.
Moon Surgical – One to watch?
Moon Surgical is a Paris– and San Carlos, California–based surgical robotics company developing the Maestro system. Call the Maestro a robotic surgical assistant — it’s designed to be small, adaptable, and integrated into existing clinical workflows. With Maestro, the surgeon is still in the operating room performing the actual surgery, but the system’s arms assist the surgeon in properly moving tools and locking them into place. It could especially be helpful in short-staffed operating rooms. The company says that the Maestro system’s data-driven capabilities in underserved laparoscopic procedures could make robotic surgery accessible across all geographies. The company has further backing from one of the biggest names in surgical robotics, with Intuitive co-founder Dr. Fred Moll serving as a board advisor. They received FDA clearance to market the device in the U.S.in December, 2022.
Zimmer Biomet’s Rosa surgical robot has produced mixed results in terms of rentals compared to upfront sales, but the company maintains a positive outlook on the system. Rosa represents a unique part of an ecosystem comprised of many parts and pieces. The integrated solution with pre-operation software through a partnership with Apple, for instance, creates a different offering in surgical robotics. Zimmer Biomet has an exclusive development and distribution agreement with NeuroOne for its thin film technology and is already selling NeuroOne’s earlier cortical strip and grid electrode devices.
Smith+Nephew globally launched its Cori handheld surgical robot system in 2021 and, in 2022, added total hip arthroplasty to Cori’s offerings, having previously designed it for total knee arthroplasty. Cori is a compact, fully mobile offering with a 3D intraoperative imaging system and an advanced robotic sculpting tool. The surgeon uses a pointer to digitally “paint” over the bone surface that needs removal. The surgeon then uses a handheld cutting tool that has a robotic feature. The robotic feature automatically halts the spinning of the tool’s burr if it’s outside the painted area.
There’s a reason that Intuitive is the market leader and likely to remain so for the foreseeable future. And that is focus. For those old enough to remember it, they adapted the old KFC mantra “we do chicken, and we do chicken right.” Intuitive has a laser-like focus on robotic surgery and devotes a lot of R&D money to driving innovation forward in the discipline.
On the other hand, in companies like Johnson and Johnson, robotic surgery is just one product segment in an extensive portfolio. That means there is a constant struggle for attention, resources, and development money. The recent layoffs at J&J and others demonstrate what happens when times get tough, and money gets tight.
That doesn’t mean that there won’t be opportunities for companies who develop a solution that meets the evolving needs of surgeons around the world.
The market is changing too. More procedures are moving outside of the hospital to ASCs and private practices. See the graphic below from Sg2, who projects more robust growth opportunities in ASCs, HOPD, and physician offices over the next ten years than in inpatient surgeries.
ASCs might have a difficult time justifying spending $2-3 million on a DaVinci robot and a total cost of ownership (including service contracts, consumables, etc.) estimated at ~$8 million per instrument. They also cite longer room preparation and procedure times using DaVinci as a reason to look elsewhere for solutions.
That’s why I think Moon Surgical might be an interesting company to watch. The argument they put forward is that their robotic assistance solution attached to standard laparoscopic tools has several advantages, including lower total cost of ownership, shorter room preparation times, bringing the surgeon back to the table-side, has a short learning curve since it uses instruments the surgeon is familiar with and keeps procedure times lower than DaVinci. Only time will tell whether these claims are borne out in clinical practice. But their arguments are compelling – especially for ASCs and rural providers.