What the Globus-NuVasive Deal Means for Surgical Robotics

Omar M. Khateeb
5 min readDec 13, 2021

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Last month reports were circulating that robotic spine company Globus Medical Inc (GMED) was going to acquire NuVasive Inc (NUVA), a full-line, minimally invasive spine surgery company.

The deal didn’t happen but the fact that it was entertained gives a hint of where robotics in spine and orthopedics could be heading.

What (Almost) Went Down

The Globus Medical and Nuvasive would accelerate consolidation in the spine surgery market, where smaller players are turning to dealmaking to compete against behemoths like Johnson & Johnson, Medtronic, and Zimmer Biomet.

NuVasive has struggled in the pandemic, with persistent headwinds ensuring its share price is yet to get close to the level it hit in Q1 2020.

To date, it’s share prices are down 2%.

In contrast, Globus recovered quickly from the crisis and by August was “considering other ways to grow the business through acquisitions.”

To date, Globus shares are up 10%.

But are transformative acquisitions the key? While I love seeing them happen my opinion on their value was influenced by Baxter chairman and CEO Joe Almeida.

Back in 2020, I listened to Almeida speak via webcast at the 18th Annual Morgan Stanley Global Healthcare Conference.

When the question came to large acquisitions, he said they weren’t off the table but that they often are not the best for the business or investors. Larger transactions do come with much more inherited risk compared to smaller tuck-in deals.

And he’s right.

Look at these acquisitions by the biggest players in medtech:

What do they have in common? They’re all examples of how hard it is to make spine deals work.

JP Morgan analysts feel that J&J “failed to stem share loss” while Zimmer is suffering “continued declines several years out still” and Stryker had a tough first year despite its integration expertise.

If we look at robotic acquisitions, we see the same thing.

While the juice was worth the squeeze, Stryker’s acquisition of Mako a decade ago was messy and quite challenging (based on the numerous accounts I heard from people internal back then).

No matter how you evaluate them, transformative technology acquisitions are not easy.

Does It Make Sense?

In NuVasive’s portfolio we can find some differentiated technologies, such as its X360 anterior procedural solutions, as examples of how it may bring value to Globus.

Yet, we also see “significant overlap in the core implant portfolio as well as on the navigation and robotics sides.”

How do you reconcile NuVasive’s Pulse platform for navigation with Globus’ ExcelsiusGPS Robotic Navigation?

You could argue that the competing systems can be merged similar to what Medtronic did when acquiring Mazor Robotics.

But we have different variables at play.

Unlike Mazor, NuVasive has its own hardware and implants.

Unlike Medtronic, Globus may not have enough cash and leverage to possibly pull it off (sorry guys, no offense).

It’s been said that mergers are like marriages.

They are the bringing together of two individuals.

If you wouldn’t marry someone for the ‘operational efficiencies’ they offer in the running of a household, then why would you combine two companies with unique cultures and identities for that reason?

But wait, aren’t we talking about acquisitions?

We were, but there are a couple of persuasion strategies at play.

The Cat is on the Roof

There’s a persuasion tell that can often predict what is coming. I like to call it “cat is on the roof” which I was taught by world famous author and hypnotist Scott Adams.

The idea goes like this-

When you’re taking care of someone’s cat and it dies, you do not call the owner and say “the cat died.”

It’s just to painful and intense.

Instead, you have to ease them into it by saying “hey, the cat’s on the roof”.

Then you say “the cat jumped off the roof and got hurt, we’re going to the vet”.

So on and so forth, preparing the owner for the inevitable. It eases people in.

Thinking Past the Sale

Everyone says I’m the greatest marketing mind in healthcare that ever lived.

Regardless of what you just thought, the point is that you had the thought and argued for or against it.

That’s thinking past the sale.

When you go to buy a car, the salesman will always say “what color do you want that in?”

Even if you argue that you’re just there to browse, the fact is that you thought about buying and even argued against it.

This unlocks the mind.

The Surgical Robotic Market

According to Alira Health, The Robotic Assisted Surgery (RAS) market is projected grow from $7B in 2021 to $20B by 2030, a 13% CAGR.

Their report, which I recommend you check out, points out a few trends:

  • The number of deals in the RAS space has constantly grown over the last few years — large MedTech players are entering the market or strengthening their position with new acquisitions.
  • At the same time, well-established players are expanding their portfolio of services and building a completely new ecosystem for RAS by acquiring AI and imaging navigation companies, among other technologies.

What’s interesting is that this growing market has instruments and accessories as the main sources of revenue.

How much?

A whopping 50% plus.

By 2030, revenues coming from the system sales and services will lose another combined 6%, increasing consumables’ share accordingly.

The Robot is a Feature of the Implants

It pains me to say this but surgical robots are becoming a commodity in the spine/ortho world. More specifically, it’s a feature that enhances the implants and hardware a surgeon uses.

Unfortunately this happened when the larger players (Medtronic, Zimmer Biomet, Smith & Nephew, and Stryker) all acquired their own robots.

The robots would soon become the Trojan Horse that help enhance a deal for a hospital to use one company’s hardware over another.

The Globus-NuVasive acquisition news/rumors is a “cats on the roof” moment of whats coming; a merger.

News of an acquisition has already gotten the market to “think past the sale”, including everyone within the two organizations.

When it takes place, the deal would create one of the largest players in the spine space, with a 17% market share.

Whether it becomes a merger or acquisition isn’t the point.

The point is that this activity indicates that robotic platforms in spine/orthopedics have now become a feature of the hardware.

While this is sad news for me and my robotic veterans, there’s also something exciting.

With trends showing a decrease in revenue from system sales and servicing, will commoditization of the hardware be the thing that finally gets medical device companies to come up with a true SaaS model?

We might be on the cusp of innovation as the Razor-Razorblade Model needs to be replaced with something new and different.

That would entail improving data capabilities, developing powerful algorithms, and architecting platforms that will yield true network effects.

The death of one technological movement births one with an even bigger vision.

Please join the discussion in the comments below and share your thoughts.

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