Medtronic gave investors a glimpse Tuesday of its robotically assisted surgical system, a long-awaited set of products expected to debut in about two years.
The system, known as the Hugo RAS (for robotic-assisted surgery), will be tested in clinical trials in the United States and elsewhere. Medtronic intends to get it to the market in the U.S. through the Food and Drug Administration's 501(k) process, which typically requires less evidence than the highest-risk medical devices.
The Hugo is a modular system, meaning it has several free-standing components that can be adapted to the needs of a particular patient or hospital floor, and upgraded as technology evolves.
It will include up to four robotic arms tipped with Medtronic surgical tools. But each arm is mounted on its own cart and can be wheeled to a different room for other surgeries, if needed.
The surgeon using the device could use special 3-D glasses to help visualize the action. It wasn't clear Tuesday how the surgeon controls the device or how much initiative the robot takes during a procedure. A video feed of the demonstration procedure wasn't broadcast publicly.
The system is designed to take advantage of the fact that Medtronic's surgical tools and supplies are already familiar to many of the doctors who would deploy them robotically.
"We understand surgery as well as any company on the planet, and that is what we bring to the table," Bob White, president of Medtronic's minimally invasive therapies group, said Tuesday to investment analysts who saw the Hugo system remove a prostate from a cadaver at Hartford Hospital in Connecticut.
Though Tuesday's event was meant to familiarize insiders with the technology, much of the discussion during the three-hour event focused on marketing.
Medtronic officials declined to reveal how the system will be sold or what it will cost. They suggested that one way the system will be sold is through operating leases, though they also said hospitals will pay at least some cash upfront and more down the road for equipment and "high value" consumable supplies.
While the payment models are still being explored, White was clear that Medtronic has no plan to give out the system for free and then make all of its profit off supplies.
"This isn't about giving the robot away and trying to make it up some other way. We believe a large upfront cost of acquisition is bearable if it can be translated" into a lower overall cost-per-procedure over time, White said. "I wouldn't want you to have the perception that we are going to place a number of systems and make up the cost in supplies."
Megan Rosengarten, general manager of surgical robotics in minimally invasive therapies, said the perception that robotic surgical systems don't effectively lower the net per-procedure cost, because they tend to be used less than once per day, is a marketing challenge for Medtronic.
Only about 2% of procedures that can be performed with robotic assistance are done that way today. Medtronic wants to greatly ramp up that figure by lowering the per-procedure costs of using its robotics platform to those of a minimally invasive laparoscopic surgery.
A majority of doctors who responded to surveys about the system said they were likely to advocate for their hospital obtaining one someday, including doctors who don't use a robotic system today, Rosengarten said.
Medtronic executives are placing a strong emphasis on robotic surgical-assistance systems as the company moves into the 2020s.
The company already sells a robotic guidance system under its Mazor brand for spine surgery. It has revealed plans for a robotically guided system for brain surgery, in addition to the Hugo system.
But executives on Tuesday said they expect innovation in robotics to remain a strong focus a decade from now, in a wide range of therapies.
"Robotics is something that is going to be a big part of the company going forward," said Geoff Martha, who will become Medtronic CEO in April following Chief Executive Omar Ishrak's planned retirement. "This is going to be something that we do, and something that we win at."
Joe Carlson • 612-673-4779
