Back to top

Analyst Blog

MAKO Surgical Corp. revealed that the company has completed acquisition of its 4-year partner Pipeline Biomedical Holdings. The transaction is valued at $2.5 million plus 3,953,771 unregistered shares of MAKO stock.

Shares of MAKO hit new 52-week high of $29.69 and closed at $29.61 yesterday, which represented a whopping year-to-date return of nearly127.0% and solid one-year return of 77.0%.

Pipeline is attached with robotic assisted surgery developer MAKO Surgical since 2010. It manufactures orthopedic devices and related instruments for both robotic devices and medical procedures and has been supplying implant technologies for MAKO’s advanced robotic arm Robotic Arm Interactive Orthopedic System, or RIO, which includes RESTORIS PST Cup and Tapered Stem hip implant system for use with the RIO's MAKOplasty Total Hip Arthroplasty software.

The deal, to some extent, justifies the hefty 85.5% premium paid by Stryker Corporation (SYK - Analyst Report) for MAKO Surgical. Based in Fort Lauderdale, Fla., MAKO was founded in Nov 2004 and generated sales of $102.7 million last year. The deal will allow SYK to get hold of MAKO’s advanced robotic arm technology, which helps orthopedic surgeons in performing knee and hip joint replacement surgeries, as well as Pipeline Biomedical’s implant technologies.
    
Stryker believes MAKO’s robotic technology has long-term potential for human joint reconstruction. MAKO’s pioneering RIO system has not been widely adopted as it should have been, due to inadequate training and marketing efforts. As a result, SYK intends to fill up this gap by utilizing its efficient marketing and training system and gain a competitive edge in the stagnant hip-and-knee replacement market.

Secondly, post-acquisition, SYK can proceed with the further implant development for MAKO’s technologies utilizing its own R&D capabilities. MAKO Surgical lack resources compared to Stryker in developing implants for its systems. Therefore, the acquisition clearly bridges this gap and enables SYK to meet the wider joint reconstruction needs.

Currently, MAKO Surgical retains a Zacks Rank #2 (Buy). Other medical instruments stocks that are also worth a look include Masimo Corporation (MASI - Analyst Report) and Mindray Medical International Limited (MR - Analyst Report). Both of them carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%