Mazor Robotics Ltd. (Nasdaq: MZOR; TASE:MZOR), which develops spinal surgery systems, today announced that it received 22 orders for its robot systems during the third quarter of 2017. The company will post a record $17.2 million in revenue in the quarter, the latest in a series of record quarters that began with the launching of the MazorX system a year ago.
Mazor's share price jumped 3% in trading today, pushing the company's market cap up to NIS 4.7 billion. The share price has climbed 115% in the past year.
19 of the new orders are for the MazorX system, with 11 of those being ordered by medical device giant Medtronic, which exercised its option during the quarter to become the exclusive marketer of these systems (exercising of this option involves an additional $40 million investment in Mazor by Medtronic). Medtronic's total investment in Mazor now totals $72 million, and Medtronic has another option to invest a further $53 million.
Following the exercise of this option, Mazor will now sell the systems solely to Medtronic, which will on-sell them and share the revenue with Mazor under the usual market terms for such deals. It is still too early to predict how this change will affect Mazor's revenue in the coming quarters, but a substantial rise in the number of systems sold is projected. Revenue in the current quarter is still based primarily on orders from previous quarters filled in the current quarter. The previous agreement between the two companies, in which Medtronic was not the exclusive marketer of the product, but created sales starts for Mazor which the latter completed, was still valid when these orders were made. Mazor paid Medtronic a commission on these sales starts.
Half of Mazor's revenue in recent quarters has come from services and replaceable components of already installed systems. This revenue is likely to continue as in the past, even though Medtronic is exercising its option.
Mazor CEO Ori Hadomi said, "This quarter we transferred to Medtronic members of our talented capital sales team along with a solid sales pipeline. This transition was performed in a smooth and effective manner and we maintained robust sales activity during the transition period.”
Sales in China too
In addition to the 19 MazorX systems order in the third quarter, most of which will be installed in the US, Mazor also receive three orders for its Renaissance system, which it is marketing independently (without Medtronic) outside the US. The systems were ordered by Mazor's distributor in China, and one of them has already been delivered. The company has yet to fill 17 of the orders it received in recent quarters (15 orders for MazorX and two for Renaissance). The full results will be reported on November 7. Mazor previously announced that following the second stage of its agreement with Medtronic, it would be able to enter additional spheres of business.
Published by Globes [online], Israel Business News - www.globes-online.com - on October 9, 2017
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