Mazor Robotics Ltd – ADR (NASDAQ:MZOR) shares surged nearly 25% on Wednesday on the news that Medtronic will buy shares of the company to help promote the next-generation robotic spinal system.
Mazor Robotics Ltd – ADR (NASDAQ:MZOR) shares reached $13.28 during Wednesday’s US trading session and even pushed 3.77% higher to $13.78 in after-hours trading. The company is an Israel-based medical device company that develops and markets surgical guidance systems and complementary products. Its products include the Renaissance Surgical Guidance System, which enables surgeons to advance from freehand surgical procedures to guided procedures, and the Renaissance System, which is used in spine surgeries whether open or minimally invasive.
Meanwhile, Medtronic Plc is the largest maker of equipment to treat spinal conditions. The company has agreed to help Mazor Robotics Ltd – ADR (NASDAQ:MZOR) by purchasing newly-issued securities amounting to 4% of its outstanding shares or a $12 million investment. In addition, Mazor will have the option to buy 6% of another Israel-based company Caesarea plus an additional 5% in future allotments that Medtronic can cap at $20 million apiece.
With this deal, the two companies can work together to Mazor’s next-generation robotic spinal system, as well as develop additional products used in helping surgeons plan and precisely execute surgeries. To top it off, Medtronic plans to buy 15 of Mazor’s new systems by the end of 2016. Also, provided that the initial phase of the agreement meets expectations by the end of next year, Medtronic will take over exclusive sales and distribution for spinal products of Mazor Robotics Ltd – ADR (NASDAQ:MZOR).
According to Mazor CEO Ori Hadomi, tapping into Medtronic’s marketing capabilities will make Mazor surgical robotic technologies the standard of care in spinal surgery. He added that Mazor is looking into new revenue opportunities from additional products to be developed such as novel implants and applications. Hadomi maintained that even with this investment from Medtronic, the company remains free and independent to develop their technology and create more value.
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