- Toronto-based company Titan Medical on Thursday announced development and licensing agreements with Medtronic for robot-assisted surgical technologies. Under the deals, Medtronic will gain access to some of Titan's intellectual property, while Titan will be able to commercialize those technologies for its own business.
- Titan will receive payments totaling up to $31 million for Medtronic’s license to the tech, provided the company reaches certain milestones verified by a joint steering committee overseeing the work. However, Titan must separately raise $18 million of capital within four months of the development start date, slated for this month.
- The agreements announced Thursday were Medtronic's second publicized robotics deal this year as it also works to launch a soft tissue robot with an eye to compete with Intuitive Surgical's da Vinci system.
It's not the first time Medtronic has expressed interest in Titan's work. The cash-strapped Canadian company suspended development of its single-port robotic surgery system in November due to funding issues. Titan claims its in-development Sport Surgical System will offer a cost-effective means to expand robotic surgery into more general abdominal, gynecologic, urologic and colorectal procedures. But getting to market has been a challenge. The company ended 2019 with a nearly $42 million loss and only about $1.3 million in cash.
To help with that effort, Medtronic in April provided a senior secured loan of $1.5 million to Titan.
In addition to the $31 million deal announced between the two companies Thursday, they also outlined a separate license agreement in which Medtronic has licensed certain robot-assisted surgical technologies in return for an upfront payment of $10 million. At the same time, Titan retains the rights to continue to develop and commercialize those technologies for its own business, according to the announcement.
Medtronic in February bought a British digital surgical tools developer for an undisclosed amount. The acquisition of Digital Surgery's artificial intelligence, data and analytics offerings were meant to build out Medtronic's surgical robotics business in its Minimally Invasive Therapies Group.
The Digital Surgery and Titan deals come as Medtronic continues to develop its own soft tissue robot dubbed Hugo.
Medtronic CFO Karen Parkhill said on Wednesday at the Jefferies Virtual Healthcare Conference that the robotics platform has been delayed due to workforce disruptions from the pandemic. Because engineers are working on Hugo remotely, they have had limited access to the system hardware. Surgeons and OR professionals are not able to participate in lab testing due to travel restrictions, she said.
When Medtronic gave analysts a first look at Hugo more than eight months ago, the company said it expected a CE mark submission for the system in the first quarter of fiscal 2021, with approval coming in the second half of that fiscal year. The company anticipated an investigational device exemption in the U.S. the first half of fiscal 2021 with a projected launch in the fall of 2022. Now, the robotic effort is up in the air due to the COVID-19 work disruptions.
"Because of these delays, we haven't given a new expected date but we're working as fast as we can," Parkhill said Wednesday.
At the same time, Parkhill emphasized Medtronic is looking for ways to accelerate testing and better enable engineers to remotely collaborate on Hugo as the company looks to "get back in the office as soon as we can."