2019-02-14

Johnson&Johnson acquires surgical robot company Auris for $3.4 billion in cash

(Reprinted from: Tencent Securities 2019-02-13 23:45) http://stock.qq.com/a/20190213/010120.htm )

According to foreign media reports, Johnson&Johnson announced on Wednesday that it will invest $3.4 billion in cash to acquire robotic surgery company Auris Health.

This acquisition marks the first entry of Johnson&Johnson, the world's largest and diversified healthcare and consumer care product company, into the robotics field, based on its partnership with Alphabet's Verily (formerly Google Life Sciences).

Auris Health was founded in 2007 and is committed to developing surgical robot technology, which includes handheld endoscopes for disease detection and minimally invasive surgical procedures.

Auris's star products include Monarch system micro instruments, endoscopes, sensing systems, and data processors. The platform operates like a game controller, and its flexible pipes can be guided to patients' lungs to help doctors more accurately identify tumors and provide treatment for early lung cancer patients.


Last November, Auris Health received a $220 million E-round financing led by Partner Fund Management. Since its establishment, Auris Health has raised approximately $730 million in financing, mostly for the development of Monarch systems.

In this new era of healthcare, our goal is to simplify surgery, improve efficiency, reduce complications, improve patient prognosis, and ultimately make surgery safer. Overall, these technologies, along with our market leading medical implants and solutions, create a comprehensive digital ecosystem foundation to support surgeons and patients before, during, and after surgery Ashley McEvo, chairman of Johnson&Johnson Group, which is responsible for consumer medical equipment business, said.

In recent years, Johnson&Johnson's medical device business has been lagging behind other competitors, so this healthcare company is also determined to improve its performance through acquisitions and divestitures.

Last year, Johnson&Johnson also divested the blood glucose monitoring business by selling its diabetes care company LifeScan to Platinum Equity after its Animas stopped operating and exited the insulin pump business market.

Bloomberg reported last month that Johnson&Johnson is seeking to acquire private robotics technology developer Auris Health. Johnson&Johnson stated on Wednesday that the company will be committed to creating an "interconnected digital ecosystem" that utilizes data and robotics technology to guide surgeons in completing surgeries and improve patient treatment outcomes.

According to reports, the surgical instrument business is expected to reach over $12 billion by 2025, with the largest participating companies including Johnson&Johnson, Medtronic, and Intuitive Surgical.

Johnson&Johnson CEO Alex Gorsky pointed out in a fourth quarter earnings conference call last month that "investors will see more news about our robot platform in 2020 and beyond.


We want to ensure that we can exit in a timely manner, but our exit approach also needs to be competitive enough and ultimately ensure that Johnson&Johnson can make waves in this field

In fact, as early as last year, there was news that Johnson&Johnson was seeking to acquire Auris Health to seize the opportunity in the AI medical market, in order to acquire its cutting-edge surgical robot technology. However, at that time, the rumored acquisition price was still around $2 billion.

The news indicates that this transaction is expected to be completed by the end of the second quarter of 2019.

On Wednesday, Johnson&Johnson's stock price slightly rose in pre market trading. Since the beginning of this year, the company's stock price has risen by nearly 4%. In the past 12 months, Johnson&Johnson's stock price has risen by more than 2%.

It should be pointed out that global medical technology leader Medtronic also staged a major medical device acquisition drama last year. The company announced its acquisition of Israeli orthopedic robot company Mazor Robotics for $1.64 billion. Mazor Robotics is a leading global manufacturer of spinal surgery robot guidance systems, and this acquisition will help Medtronic further consolidate its global leadership position in spinal surgery technology. (Drew)

▲ Monarch Surgical Robot Platform (Image source: Auris Health official website)