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Why Zimmer Biomet Is Taking a Disciplined Approach to Launching Its Robot

Article-Why Zimmer Biomet Is Taking a Disciplined Approach to Launching Its Robot

Why Zimmer Biomet Is Taking a Disciplined Approach to Launching Its Robot
Zimmer Biomet is taking a conservative approach to launching its Rosa Knee System for robotic-assisted knee replacement surgery.
As Zimmer Biomet prepares to enter a surging robotics market, CEO Bryan Hanson said the company wants to make sure the company does it right.

Surgical robotics is expected to be hotter than ever in 2019, particularly on the orthopedics side, and Zimmer Biomet is sliding into the market just in time. The Warsaw, IN-based company received clearance for the Rosa Knee System to be used in robotically-assisted total knee replacement procedures in January. 

Naturally, during the company's earnings call Friday, analysts were eager to hear the company's plans for launching the new system.

"We're going to do a limited launch out of the gate," Zimmer Biomet CEO Bryan Hanson said during the call, as transcribed by Seeking Alpha. "We want to be very disciplined in our approach to launching a new robotic system to make sure that we do it right. We have the right education. We have the right service levels. And we will do that limited launch for, let's call it six months. Post that limited launch is when we move into full launch. And that's when the organization gets unleashed and we utilize that technology in that full launch status."

The company's chief competitor, Stryker, took a similar approach with its Mako Total Knee System, and the strategy has proven to be successful. FDA approved the company's Triathlon Total Knee System for the Mako robot in August 2015, but Stryker made the market wait more than a year for the full commercial launch. Stryker wanted to release the product at a measured pace in an effort to maximize its chance of success. Judging by Stryker's most recent earnings report, Mako was definitely worth the wait.

So it stands to reason that Zimmer Biomet will also benefit from taking a conservative approach to the market.

"One of our competitors presented just recently here and talked about the continued strength in robotics," Hanson said. "That's perfect. I love to hear it because we're just about to launch our robotic platform in a market that is surging. And when you think about it and the under-penetration of robotics in general, when you think about the number of surgeons that are doing procedures today with our implants, there's a very good opportunity for us and we couldn't be more excited about the fact that robotics is getting good traction."

Hanson also provided another reason that Zimmer Biomet could have the upper hand when it does launch its Rosa Knee System.

"When you look at the largest number of surgeries being done today in knees, it's our implants. It's our surgeons doing those procedures," he said. "And we're about to provide them with an opportunity to have access to robotics in that largest segment of knees globally. So that's pretty exciting."

That's not to say the company won't also go after competitive accounts with the Rosa robot. The company's recently announced partnership with Apple could really give Zimmer Biomet a competitive edge. The company announced last October that it is working with Apple to study the mymobility app's impact on patient outcomes and overall costs of hip and knee replacement surgeries.

"We're going to market directly to patients with a personalized robotic approach, using our mymobility app backed by Apple, which has very strong consumer demand," Hanson said. "But I think our biggest opportunity to close the gap is to be able to get the mix benefit in the procedures we already have with the surgeons that we already have. So we're pretty excited about it, obviously."

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