Johnson & Johnson to buy surgical robotics firm Auris for $3.4 billion

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Johnson & Johnson (J&J) said on Wednesday it would buy Auris Health Inc for 3.4 billion U.S. dollars in cash, gaining access to the privately held company’s surgical robotic scope used in respiratory procedures and the detection of lung cancer.

The deal marks J&J's expansion into the healthcare robotics market that is expected to reach nearly 12 billion U.S. dollars by 2023, and pushed down shares of Intuitive Surgical Inc., the current leader in minimally-invasive robotic surgery.

J&J has sold some divisions such as diabetes care, as it tries to focus on and improve sales at better-performing businesses like cancer treatments.

"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.

Sales in J&J's medical device unit have been recovering since turnaround efforts began in 2016, and the company now expects that unit to achieve above-market growth in 2020.

Auris was founded by surgical robotics pioneer Frederic Moll, who also co-founded Intuitive Surgical. Auris's flagship product is a robot used by surgeons via a controller to direct a scope through a patient's body with cameras.

J&J's shares were up marginally at 134.24 U.S. dollars in midday trade, while Intuitive Surgical fell as much as 2.5 percent to 526.36 U.S. dollars as analysts said Auris could become a formidable competitor given J&J's commercial scale.

J&J said the acquisition would complement its purchase last year of Orthotaxy, a privately held developer of software-enabled robotic technology for surgery.

Source(s): Reuters