Surgical systems developer Mazor Robotics is set to receive $40m as a third tranche investment from Medtronic, under a strategic agreement signed by the firms in May last year.
The investment follows the start of the next phase of their partnership, according to which the associated agreements have been amended.
As per the new agreements, Medtronic will be responsible for the worldwide distribution of the Mazor X Surgical Assurance Platform and related accessories, with a cumulative potential for numerous Mazor X systems over a period of four and a half years.
Around 30 Mazor sales organisation members will join Medtronic to ensure the continuation of existing sales.
Along with Medtronic’s navigation capabilities and implant systems, the new phase includes the co-development of spine products by leveraging Mazor Robotics’ surgical planning and precision-guided surgical systems expertise.
Mazor will continue manufacturing and recognising revenues for Mazor X system sales, disposable kits and service fees.
The change from direct sales to strategic distribution model is estimated to decrease Mazor’s annual operating expenses by approximately $13m.
Mazor Robotics CEO Ori Hadomi said: “The strategic partnership between Mazor and Medtronic has already resulted in 59 Mazor X system orders since the October 2016 launch and reflects an accelerated sales cycle due to customers’ eagerness to adopt our solutions for the spine market.
“Now, as commercial responsibility for the Mazor X in the spine market shifts to Medtronic, the annual minimums for sale of Mazor X systems agreed to by the two companies are expected to drive substantial improvement in Mazor’s financial results during the next several years.”
Expected to be closed next month, the latest investment indicates early achievement of select sales and marketing milestones by the firms and brings the total investment from Medtronic to $72m.