Mazor Robotics Reports Flat Q1 Revenue

First-quarter revenue flatlined at Mazor Robotics Ltd., as weak domestic sales offset a strong showing overseas.

Revenue at the robotic spinal surgery firm fell slightly to $4.87 million from $4.9 million during the same period in 2013. U.S.-generated revenue for the three months ended March 31 fell 12.1 percent to $3.6 million due to lower system sales while international non-U.S. revenue mushroomed 62 percent to $1.3 million, reflecting two system sales compared with one sale in Q1 2013.

Revenue from system sales, services and other skyrocketed 67 percent to $2 million, and the company ended the first quarter of 2014 with a clinical installed base of 37 Renaissance systems in the United States and 68 systems globally, according to the latest earnings report.

“Our efforts in the 2014 first quarter yielded a number of positive results,” said Ori Hadomi, Mazor’s CEO. “We penetrated two teaching centers which enhanced the awareness of the Renaissance system within the broader academic community. With a total of four systems in hospitals in the state, we believe that Georgia is emerging as a new cluster and will one day complement our success in Florida, Texas and southern California.”

The robotic, bone-mounted positioning systems (Renaissance) that Mazor developed has been used to perform thousands of procedures for various spinal conditions, including scoliosis degenerative disc disease, herniated disc, and other complex spinal deformity cases. Clinical studies by The Spine Journal of 3,271 implants in 14 medical centers have shown that the Renaissance system has improved placement accuracy from 90 percent to 98.3 percent. Additionally, the robotics guided surgery reduced X-ray dosage, complication rates, number of re-operations and average length of stay in the hospital.

Net loss attributable to ordinary shareholders in the first quarter of 2014 was $3.6 million, down from $10.6 million in the same period last year. Gross margin was down slightly (like revenue), slipping to 79 percent from 81 percent in the comparable period of 2013.

Total operating expenses in the first quarter of 2014 were $7.5 million, compared with $4.6 million in the first quarter of 2013, reflecting the company’s increased investments in sales, marketing, research and development resources. Cash used in operating activities in the first quarter of 2014 was $5.3 million, compared with $1.6 million in the first quarter of 2013. As of March 31, 2014, cash, cash equivalents and marketable securities totaled $61 million.

With 56 systems deployed globally and 4,000 surgeries performed so far, Mazor owns a very small fraction of the market for robotic surgical systems, analysts note. The U.S. market for annual surgical robotics is $1.9 billion and currently is dominated by Intuitive Surgical with a 91 percent market share.