Shares of Mazor Robotics Ltd. (NASDAQ: MZOR) saw a handy gain to kick off hump day after it was announced that the company has entered the next phase of its strategic partnership with Medtronic PLC (NYSE: MDT) earlier than planned.
Medtronic will assume exclusive worldwide distribution of the Mazor X system, according to the agreements. At the same time, Medtronic is making a $40 million third tranche investment in Mazor.
These developments were the result of the early achievement of certain sales and marketing milestones by both companies, as well as higher than expected global market acceptance and demand for the Mazor X system. Medtronic and Mazor originally entered into a strategic agreement back in May 2016.
The proceeds from the investment will further strengthen Mazor’s balance sheet and provide the resources to continue to collaborate with Medtronic.
Ori Hadomi, CEO of Mazor Robotics, commented:
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. Together we will be able to further advance our robust jointly-developed product pipeline for the spine market, to make a difference for patients while Mazor also pursues new opportunities to apply our innovative technologies to other medical needs.
Shares of Mazor were about 9% at $45.75 early Wednesday, with a consensus analyst price target of $38.50 and a new 52-week trading range of $20.19 to $46.00.
Medtronic shares traded at $79.40, with a 52-week range of $69.35 to $89.72 and a consensus price target of $91.44.