J&J to enter the robotic surgery market with $3.4B Auris Health buy

Johnson & Johnson (NYSE:JNJ) is stepping into the field of robotic surgery after saying today that its Ethicon subsidiary inked a $3.4 billion deal to pick up surgical robotics pioneer Dr. Fred Moll’s newest robotic surgical play, Auris Health, and its FDA-cleared Monarch platform.

The New Brunswick, N.J.-based medtech giant said that the deal will include an additional $2.35 billion in milestone-based contingent payments, bringing the total value of the deal to approximately $5.75 billion.

Redwood City, Calif.-based Auris Health’s robotic Monarch platform has FDA clearance for diagnostic and therapeutic bronchoscopic procedures. The system features a controller interface for navigating the integrated flexible robotic endoscope into the periphery of the lung and combines traditional endoscopic views with computer-assisted navigation based on 3D patient models, the company said.

In addition to picking up the company and Auris’ FDA-cleared Monarch bronchoscopic-focused robotic platform, Auris CEO and Intuitive Surgical (NSDQ:ISRG) founder Moll will also be coming aboard as part of the acquisition, Johnson & Johnson said.

“We’re thrilled to be joining Johnson & Johnson to help push the boundaries of what is possible in medical robotics and improve the lives of patients across the globe. Together, we will be able to dramatically accelerate our collective product innovation to develop new interventional solutions that redefine optimal patient outcomes. This combination is a testament to the incredible work of the Auris Health team and the innovation engine behind the Monarch Platform, which represents a huge step forward in endoluminal technology. We look forward to continuing to shape the future of intervention with the added expertise and resources of the world’s largest healthcare organization,” Moll said in a prepared statement.

The purchase is not the company’s first foray into robotic surgery – last February, J&J paid an undisclosed amount to acquire French robot-assisted surgery company Orthotaxy. Prior to that, the company inked a deal with Google parent Alphabet‘s (NSDQ:GOOGL) Verily life sciences play to develop the Verb Surgical platform, which J&J said today continues to progress.

“In this new era of health care, we’re aiming to simplify surgery, drive efficiency, reduce complications and improve outcomes for patients, ultimately making surgery safer. We believe the combination of best-in-class robotics, advanced instrumentation and unparalleled end-to-end connectivity will make a meaningful difference in patient outcomes. We are very committed to our partnership with Verily on the development of the Verb Surgical Platform. Collectively, these technologies, together with our market-leading medical implants and solutions, create the foundation of a comprehensive digital ecosystem to help support the surgeon and patient before, during and after surgery,” J&J med devices exec VP & worldwide chair Ashley McEvoy said in a press release.

Johnson & Johnson said that it expects the deal to close by the end of the second quarter of this year, but that the deal is subject to antitrust clearance and other customary closing conditions.