We are recommending an Israel-based stock that is involved in creating robotic devices to help surgeons operate on peoples' backs, notes international expert Vivian Lewis, editor of Global Investing.
Mazor Robotics (MZOR), my new recommendation, recently partnered with Medtronics (MDT); the latter is a stock that I already own in my US portfolio.
Mazor, whose name means "fountain” in Hebrew, is headquartered in Caesaria and its technology was developed at the Israel MIT, the Technion in Haifa.
MZOR is well-liked by US analysts but, in my view, they have not taken into account the full potential of its Renaissance Guidance and future surgical systems.
The company just recently posted a new study of its guided minimally invasive spinal surgeries (MIS) compared to “freehand” surgery at the 23rd Advanced Spine Techniques congress in Washington showing that robotics significantly reduced rates of complications and repeat surgery.
The first study of 705 operations found that freehand produced 3.8x as many complications than its Renaissance robots. The data was prepared by Mazor. Another study was published earlier with the same results.
Under Mazor's co-production, co-development deal with Medtronics, worth as much as $50 million if all three tranches are activated, the latter could wind up owning as much as 15% of the Israeli firm.
They are working together to launch an improved spinal surgery robot called Mazor X, to improve predictability and patient benefit by adding to the existing surgery trajectory guidance new analytical tools, multiple-source data, precision guidance, optical tracking, intra-op verification, and connectivity technologies.
Mazor X has won FDA clearance and will be commercialized starting at the North American Spine Society in Boston in October. The deal gives MZOR $47.5 million in cash to advance its Mazor X platform, plus a Medtronics order for 15 of its new systems to be delivered in the second half.
Meanwhile, Mazor sold 11 of its Renaissance systems, 6 in the USA during its Q2, producing revenues of $8.3 million, up 6% year-over-year although one of the US sales was a trade-in and was not booked for the quarter.
MZOR is still losing money, in the amount of $4.1 million this year vs. a mere $2.1 million last year. Per share, this came to 9 cents vs. 5 cents.
There are risks. The robot surgery field is not exclusive to MZOR. In the wake of its deal with MDT and its recent studies, MZOR has doubled in price in a matter of weeks. As such, this is a speculative idea.
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By Vivian Lewis, Editor of Global Investing
