Johnson & Johnson said Wednesday it would buy privately-held Auris Health for $3.4 billion in a move that will add robotics technology for detecting lung cancer to its portfolio.
Auris’s flagship Monarch platform, which was approved by the U.S. Food and Drug Administration last year, uses robotics to more accurately diagnose, and eventually treat, small and hard-to-reach nodules in the periphery of the lung.
The company was founded by surgical robotics pioneer Dr. Frederic Moll and raised $220 million in an equity financing round that closed in November 2018.
J&J said the Monarch platform will play an “important role” within its lung cancer initiative, “enabling the development of a differentiated digital solution that addresses key steps in the lung cancer care journey.”
The deal represents J&J’s biggest move into surgical robotics, a market that is expected to reach nearly $12 billion by 2023. In February 2018, it acquired Orthotaxy, a developer of robotic-assisted technology for orthopaedic procedures.
“In this new era of healthcare, we’re aiming to simplify surgery, drive efficiency, reduce complications, and improve outcomes for patients, ultimately making surgery safer,” Ashley McEvoy, an executive vice president at J&J, said in a news release.
“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,” she added.
As Reuters reports, J&J has sold divisions such as diabetes care as “it tries to focus on and improve sales at better-performing businesses like cancer treatments.” Sales in its medical device unit have been recovering since turnaround efforts began in 2016.
“We are encouraged to see J&J moving more aggressively in the robotics field, which has been a gap for its medical device business,” Wells Fargo analyst Larry Biegelsen said.
Moll’s previous companies include publicly traded Intuitive Surgical, a robotic surgical systems manufacturer now worth around $61 billion. He will join J&J upon completion of the Auris deal.
“We’re thrilled to be joining Johnson & Johnson to help push the boundaries of what is possible in medical robotics,” he said.