Will Stryker’s MAKO Purchase Bring Disruption To The Ortho Industry?

Article preview from Medtech Insight Newsletter - October 28, 2013

Stryker’s adoption of MAKO’s RIO (Robotic-arm Interactive Orthopedic) system could give the global medical supplier a competitive edge over other orthopedic implant makers if the company can win converts to robotic surgery by leveraging its own experience in selling capital equipment.

Will Stryker’s MAKO Purchase Bring Disruption To The Ortho Industry?

Article preview from Medtech Insight Newsletter - October 28, 2013

Given the high device and procedure success rates in total joint replacement and the conservative nature of surgeons generally, the orthopedics industry has seen little true breakthrough technology over the past 20 years, technology that has significantly disrupted the competitive landscape. Stryker Corp.’s bid to acquire surgical robotics maker MAKO Surgical Corp. could, however, do exactly that. [See Deal] Stryker’s adoption of MAKO’s RIO (Robotic-arm Interactive Orthopedic) system could give the global medical supplier a competitive edge over other orthopedic implant makers if the company can win converts to robotic surgery by leveraging its own experience in selling capital equipment.

Indeed, with a $1.65 billion price tag, MAKO had better be a difference maker for the aggressively acquisitive Stryker. But even if MAKO doesn’t disrupt the competitive landscape for Stryker – little in the company’s history suggests that offering a novel robotic system could lead to major market share gains – the purchase may better reflect the orthopedic industry’s aspirational move toward doing what was once seen as impossible – improving surgical outcomes of hip and knee replacement procedures, where success rates have historically hovered in the high 90s, as well as expanding the market for partial knee replacements.

Stryker officials, clearly, have high hopes for MAKO’s ability to enhance their current offering. “We believe orthopedic surgical robotics provides an opportunity to expand and grow significantly from its position today and has the potential to become a game-changing technology longer term,” says Joe Cooper, a spokesman for Stryker in an e-mail. “The MAKO acquisition would allow us to drive innovative approaches in orthopedics, robotics adoption, and revenue growth beyond what MAKO or Stryker could do on their own.”

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