Competition in the Spinal Robotics Market Intensifies, Challenging Medtronic's Market Dominance

The wave of robotic applications in orthopedics has long been dominated by hip and knee replacement surgeries, with products from Stryker and Zimmer Biomet leading the way, while the development of the spinal robotics market has lagged behind.

However, momentum in this field has been building in recent years. Wall Street analysts and industry insiders predict that the spinal robotics market has potential comparable to that of the robotic hip or knee market.

"Most surgeries in the current spinal market are still associated with more open, invasive procedures, so there is significant room to convert open surgeries to minimally invasive or robot-assisted ones," said Kaila Krum, Managing Director at Truist Securities. "In the long term, I believe robots will capture a larger share of the market."

Leading this market is Medtronic, which entered the spinal robotics field by acquiring Mazor Robotics for $1.6 billion in 2018. However, as the market grows, smaller companies such as Globus Medical and NuVasive are seeking to compete with this medical technology giant.

Defining the spinal robotics market is not easy, as the installed base of systems is not always clear. Krum estimates there are currently about 5,500 to 6,000 spinal robotics accounts globally, but a hospital or health system may own multiple robotic systems.

Moreover, companies' reporting of installed base figures can be ambiguous. Installation does not always mean a direct sale of the system—a system can cost upwards of $1 million and may be sold through outright purchase, lease with installment payments, or bundled with other products and technologies.

Nevertheless, analysts still view installed base as a strong leading indicator of revenue growth.

SVB Leerink analyst Richard Newitter stated that although NuVasive and Brainlab, a partner of Johnson & Johnson, will compete in this field in the future, the current spinal robotics market is a "two-horse race" between Medtronic and Globus.

While Medtronic currently holds the lead, both Krum and Newitter noted that Globus is gaining market share with its Excelsius GPS system. Medtronic has higher total procedure volume and installed base for the Mazor system, but according to Newitter, Globus is installing robots at a pace comparable to Medtronic, and Globus tends to favor direct sales over flexible financing arrangements.

"For example, if you charge $1 million directly per robot, you might not pursue extremely high installation numbers because you are indeed charging for capital equipment," Newitter said. "If you use more flexible financing arrangements, installation numbers may be higher, but the actual upfront fees collected are not the same."

As the field further develops and adoption rates increase, robotic systems will serve different strategic purposes for each manufacturer.

Newitter noted that Globus holds about 10% of the U.S. spinal implant market. Through robotics, it can attract new customers and capture a larger share of the spinal implant market, thereby boosting overall spinal procedure volume. Its U.S. core spinal business is growing three times faster than Medtronic's, driven by the adoption of robotic technology.

Medtronic, on the other hand, may use robotic systems to maintain its market leadership by migrating existing customers to its robotic platform.

Despite intense competition among market leaders, the spinal robotics market is still in its early stages.

Linnea Burman, Vice President of Enabling Technologies at Medtronic, said robot-assisted spinal procedures account for only a single-digit percentage of the company's total spinal procedures. However, Burman stated that momentum has been building since the acquisition of Mazor, and the company believes robotic technology will eventually become the standard of care.

"We are seeing robot-assisted spinal surgery growing faster than many other segments in the market," Burman said.

Medtronic estimated in an email statement that robot-assisted surgeries globally will exceed 30% within 10 years.

Evolution of surgical approaches

Spinal robotic technology differs from other orthopedic robots. For example, spinal systems are primarily used for screw placement in minimally invasive procedures to implant spinal fixation devices, in contrast to Stryker's Mako or Zimmer's Rosa systems—which are used for total and partial joint replacement and can perform bone cutting.

Medtronic, Globus, and Brainlab combine their systems with navigation, enabling surgeons to navigate patient anatomy through preoperative CT scans. NuVasive is also developing a navigation system to accompany its robotic arm.

Themistocles Protopsaltis, an orthopedic surgeon at NYU Langone Health who consults for both Medtronic and Globus, said the complexity of spinal surgery itself—such as dealing with neural elements and cerebrospinal fluid—is one reason the field has developed more slowly.

But Protopsaltis added that technology has now caught up with the demands of surgical complexity. NYU Langone was initially cautious about introducing robots, but now has three Globus robots within its health system, all purchased in the past roughly three years.

According to Protopsaltis, for certain procedures (such as anterior-posterior lumbar fusion or lateral lumbar fusion), NYU Langone's average operative time has decreased by 110 minutes when using robotic systems. Infection rates and reoperation rates for some robotic procedures have also decreased.

Robotic systems are also changing how spinal surgery is performed. For example, Protopsaltis previously had to reposition patients multiple times during surgery to place screws or close incisions, which added operative time. Robotic systems now allow him to keep patients in a lateral position for screw placement and enable other steps of the procedure to proceed simultaneously.

Medtronic's Burman also said spinal robotic systems are influencing surgical workflows and establishing standardized operating procedures in this highly variable field.

There are safety risks for surgeons learning to use robotic systems because they are not yet familiar with these technologies. According to Protopsaltis, NYU Langone has established a committee to review navigation or safety incidents that arise, so that "problems can be caught before they evolve into disasters."

Robotic 'revolution'?

In addition to Globus, Medtronic will face competition from Brainlab and NuVasive. Germany-based privately held Brainlab received FDA clearance for its spinal robotics imaging system and robotic surgical system in February of this year, after the system had received CE marking in summer 2020. NuVasive is entering the market somewhat later. The company planned to launch its Pulse imaging and navigation platform in 2021, but delays have pushed the first human trials of its robotic arm to 2022.

Newitter said NuVasive will be "noticeably absent" while Medtronic and Globus grow their businesses; however, once its full system launches, the company's position as a top-three player in spinal surgery will benefit it.

According to Newitter's prediction, Stryker will eventually develop spinal applications for its Mako system, currently used for hip and knee replacement. SVB Leerink estimates it will take about three more years for related spinal products to launch.

Although Zimmer's Rosa system already has FDA-approved spinal applications, the company plans to spin off its spine and dental businesses into a standalone company in mid-2022, adding uncertainty to its future in this field.

Krum believes that as the spinal market grows and smaller companies establish their own robotics businesses, "there is room in the market for multiple players."

Another key factor in the coming years will be not only how the market changes, but also how the technology evolves. Currently, robotic systems are used only for specific parts of spinal surgery, but companies are seeking to expand capabilities.

NYU Langone's Protopsaltis believes spinal robotic systems will eventually be applied to more complex procedures, including even limited bone cutting.

Medtronic plans to add more applications through its robotic system, such as spinal deformity correction, Burman said. However, the company is unlikely to expand the Mazor platform to other orthopedic areas.

"Right now we are very focused on spine. We think it's an exciting growth area with a lot of room to develop," Burman said. "We don't plan to enter other areas of orthopedics."

Surgeons remain hesitant about adopting robotic navigation systems, which may continue to weigh on overall adoption rates in the near term. Meanwhile, robotic surgery is replacing traditional methods. According to Protopsaltis, at NYU Langone, about 50% of lumbar surgeries use robotic systems, and lumbar surgeries account for about 40% of the health system's total spinal procedures.

"I think this is a trend, and it will continue," Protopsaltis said. "I think in six years there will be a revolution, where using navigation robots will be more common than not using them."