Dive Brief:

• Johnson & Johnson CEO Alex Gorsky on Wednesday called digital and robotic surgery one of the biggest shifts in the medtech sector, touting the combination of now-wholly owned Verb Surgical with its existing assets.

• Gorsky called the platform created between Verb and Auris Health “something that will be in place for the next several decades.” The company plans to offer more details at a Medical Device Business Review Day scheduled for May 13.

• Fourth quarter results saw global medical device sales largely flat at $6.7 billion, coming in down less than 1% on a reported basis and up less than 1% on an operational basis. The performance reflected low-single-digit growth internationally, offset by a similarly sized fall in U.S. sales.

Dive Insight:

J&J is a relative late-comer to robotics and will have to face well-established incumbent Intuitive Surgical and a host of new entrants aiming to bring new platforms to market. Still, Gorsky touted a “very differentiated offering” in the space.

The New Jersey-based company has made multiple moves into digital and robotic surgery in recent years, paying $3.4 billion to acquire Auris and taking full control of its Verb joint venture with Verily, the life sciences research organization of Alphabet. Gorsky called the deals complementary. 

"We think combining Auris and Verb really helps ensure that we have a very strong role in the next generation of digital surgery platforms. Our teams are now working together. We do look at this as a platform," Gorsky said on a conference call with investors.

For now, J&J’s move into digital and robotic surgery is creating more costs than revenues. J&J picked out digital solutions and robotics as two areas of increased investment in 2019.

Having won FDA clearance for its Monarch surgical robot in 2018, Auris is the forefront of J&J’s move into the commercial space. Gorsky said Auris is "off to a great start" but the big opportunities are still to come, with the CEO predicting the Monarch robot is "going to play a critical role in our lung cancer initiative."

J&J also said it's targeting a mid-2020 regulatory submission for Velys, its orthopaedics robotics platform.​

The fourth quarter results in all departments were in line with the trends seen across the year as a whole.​

Interventional solutions, which covers J&J devices used in atrial fibrillation procedures, were a bright spot, posting roughly 13% growth in the quarter. Sales at the orthopaedic and vision units were flat. Surgery was the headwind, recording a mid-single-digit decline in revenue for the quarter.

This story has been updated with additional details from J&J's earnings call.