- Johnson & Johnson announced Monday it closed its $3.4 billion cash acquisition of robotic surgery manufacturer Auris Health. If certain milestones are reached, additional payments up to $2.35 billion are possible.
- The addition of Auris' Monarch Platform adds another robotic surgery system to J&J's lineup as the medtech giant bets on digital surgery as a growth driver for the future. The system is currently used in diagnostic and therapeutic procedures in the lung, but Auris has been pursuing its use in targeting lung cancer.
- J&J on Monday also completed its divestiture of Advanced Sterilization Products to Fortive Corporation for $2.8 billion. The former business was housed under J&J subsidiary Ethicon, which manufacturers sutures, staplers, energy devices, trocars and other adjunctive hemostats.
J&J said the technology, in combination with its collaboration with Verily, general surgery platforms in development with Verb Surgical and its work in orthopaedics with Orthotaxy, will bolster its efforts to have offerings across a range of procedures.
"Auris will help us amplify the power of digital surgery to address unmet clinical needs and lead a transformation in surgical care and lung cancer intervention," Ashley McEvoy, J&J EVP of medical devices, said in a statement. McEvoy told investors at the SVB Leerink Global Healthcare Conference that the deal "is really going to be a key element in our strategy to kind of play to win in the future of digital surgery."
The robotic surgery market has seen significant activity in the past few months. In January, Medtronic bought Mazor Robotics for $1.7 billion, Zimmer Biomet's Rosa systems continue to gain new clearances, Stryker continues to build out sales of its Mako robotic system and Intuitive Surgical is busy obtaining new indications for its da Vinci platforms.
Chris DelOrefice, J&J VP of investor relations, told investors at the Barclays Global Healthcare Conference the company remains excited about robotics, but it is a "midterm play" as the company pursues digital surgery as a "full connected ecosystem." The acquisition of Auris is one aspect of a digital system platform that follows a patient, he said.
"Think of it as a swim lane or platform that gets us into endoluminal with lung diagnosis initially. There's obviously opportunity to take that beyond diagnosis into direct treatment. We have an ablation business. Think of ablating lesions or even eventually we have a world without disease with lung to assess potentially delivering a pharmaceutic therapeutic benefit," DelOrefice said.
Both the Auris acquisition and Advanced Sterilization Products divestiture will be discussed during J&J's earnings call scheduled for April 16, according to the company.