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Medtronic's (MDT) Medicrea Buyout to Aid AI Spinal Surgery Line

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Zacks Equity Research
·4 min read
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Medtronic plc MDT recently acquired France-based Medicrea International that specializes in the transformation of spinal surgery through AI, predictive modeling and patient specific implants.

The Medicrea acquisition marks the seventh successful purchase by the company in 2020 and will Medtronic to help expand in AI, machine learning and predictive analytics.

The Deal at a Glance

Back in July, Medtronic had initiated this friendly voluntary all-cash tender at the offer price of €7.00 per Medicrea share. With the completion of the tender offer, Medtronic currently holds more than 90% of Medicrea's share capital and voting rights. Soon Medtronic will request for implementation of a squeeze-out procedure under French law, which will result in Medicrea becoming a wholly-owned subsidiary of Medtronic.

Importance of the Buyout

At present, there are more than thirty 510(k) cleared or CE Marked implant technologies in Medicrea’s portfolio. These products are used in spinal surgeries for adult deformity, pediatric deformity and degenerative disease. These solutions are powered by predictive modeling and sophisticated algorithms. This year, despite the pandemic-led elective surgery restrictions, Medicrea’s UNiD ASI (Adaptive Spine Intelligence) platform has seen rapid growth. 

 

Medtronic believes that the successful integration of Medicrea’s capabilities and solutions in data analytics, artificial intelligence and personalized implants will complement its existing fully-integrated procedural solution for surgical planning and delivery. This will improve Medtronic’s spine care outcome.

According to the senior vice president and president of the Cranial & Spinal Technologies division of Medtronic. “Medtronic will become the first company to be able to offer an integrated solution including artificial intelligence driven surgical planning, personalized spinal implants and robotic assisted surgical delivery, which will significantly benefit our customers and their patients.” The company believes that with the Medicrea line, it will become the leader in personalized implants and AI-driven planning and prediction capabilities.

Medtronic's Progress in AI-Driven Surgery

In a bid to grow in the field of AI-driven spine surgery, in October, Medtronic announced the U.S. launch of Adaptix Interbody System post. The Adaptix system is the first 3D printed titanium implant developed in-house by Medtronic engineers, incorporating state-of-the-art Titan nanoLOCK Surface Technology. This surface technology was first demonstrated by Titan Spine, which was acquired by Medtronic in 2019.

Earlier this year, Medtronic acquired London-based Digital Surgery. Apart from working on surgical AI, this business also focuses on data and analytics, digital education and training.

Earlier, the company had purchased Mazor Robotics, an Israel-based robotic surgical guidance systems company. The buyout combined Medtronic's market-leading spine implants, navigation and intra-operative imaging technology with Mazor’s robotic-assisted surgery (RAS) systems.

Share Price Performance

Shares of Medtronic have gained 12.9% in the past six months compared with the industry’s 12.6% rally.

Zacks Rank & Stocks to Consider

Currently, Medtronic carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are ResMed RMD, Thermo Fisher Scientific TMO and Align Technology ALGN.

ResMed’s long-term earnings growth rate is estimated at 14.5%. The company presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher’s long-term earnings growth rate is estimated at 18%. It currently carries a Zacks Rank #2.

Align Technology’s long-term earnings growth rate is estimated at 18.3%. It currently carries a Zacks Rank #2.

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Medtronic PLC (MDT) : Free Stock Analysis Report
 
ResMed Inc. (RMD) : Free Stock Analysis Report
 
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
 
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
 
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