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Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
There’s a positive view of Ely Cathedral throughout fields from exterior the Cambridgeshire manufacturing facility of the UK’s main surgical robotics firm. Contained in the spotless constructing, 13,000 components are assembled into every Versius system utilized by surgeons for keyhole surgical procedure, with its 4 robotic arms and 3D-vision console.
That is an thrilling time in surgical robotics. The know-how is extensively used within the US and is spreading around the globe as surgeons and hospitals see the medical and monetary advantages. The Nationwide Well being Service introduced final week that it’ll speed up its use of robotic techniques, with 9 out of 10 keyhole procedures assisted by know-how inside 10 years.
Additionally it is promising for CMR Surgical, a start-up that emerged from the life sciences ring round Cambridge in 2014, and has raised almost $1bn in funding from personal fairness backers together with SoftBank at a $3bn valuation. CMR is taking over the dominant da Vinci robotic techniques produced by the US firm Intuitive Surgical with Versius.
So I used to be disenchanted to be taught that CMR has employed advisers and will promote itself to a strategic acquirer, fairly than pursue Intuitive independently in a marketplace for surgical robotics that might attain $14bn subsequent yr, based on the consultancy Oliver Wyman. This might be one other sale of a promising UK know-how firm, following these of Oxford Ionics and Spectris.
I went to Ely to research and found that there’s nonetheless hope of CMR remaining impartial, however that competitors in surgical robotics has broader classes. It reveals {that a} UK firm attempting to beat an incumbent enterprise within the largest, most technologically subtle healthcare market on the earth faces an enormous problem.
Surgeons use techniques corresponding to da Vinci, Versius and others made by firms together with Medtronic and Asensus Surgical to make it simpler to function exactly on their sufferers. Robots are utilized in keyhole operations during which rods with surgical devices are inserted by small incisions. Surgeons manipulate these robotic arms remotely whereas sitting at digital consoles close by.
The concept originated in a US Division of Protection venture to discover whether or not surgeons may function removed from battlefields, however was then tailored for civilian use and Intuitive was based 30 years in the past in Silicon Valley. Some 10,000 da Vinci techniques have been put in globally as hospitals put money into robots to scale back problems from surgical procedure and discharge sufferers quicker.
That’s an intimidating quantity, since fewer than 200 Versius techniques had been put in by the tip of final yr. Intuitive additionally has a giant lead over different firms, giving it the benefit that many surgeons have skilled on da Vinci robots in specialities corresponding to prostate most cancers. Though the techniques are costly, promoting for a median $1.6mn final yr, they’re acquainted.
However CMR’s 5 founders noticed a intelligent option to exploit da Vinci’s weak level of being cumbersome. The Versius robotic arms are modular, fairly than da Vinci’s built-in items, permitting them to be wheeled individually between working theatres or inside a hospital. The system is much less superior than the most recent da Vinci 5 mannequin, however presents a flexible different.
The UK firm is now within the robust part of scaling from a promising start-up to a world enterprise. There have been bumps: its revenues fell final yr as a result of it bought fewer items as its senior administration was shaken up. Massimiliano Colella, the brand new chief govt, instructed me that whereas it made a lack of £130mn in 2024, it has “a transparent path to profitability, not far-off”.
His traders would then have “all choices”: whether or not to carry on to the corporate, float publicly or promote it. In the meantime, it faces one other query: how a lot to decide to breaking into the US market, the place Versius has gained approval for gallbladder surgical procedure. That could be a nice alternative however it might require heavy funding to roll out Versius to hundreds of US hospitals.
My concern is that, given the selection of accepting a direct reward or taking a danger on transformative success, they may accept the previous. This might be cheap: have been CMR to attain the whispered sale value of $4bn, it might be an excellent consequence for a Cambridge start-up. It will even be a prudent alternative: take the win and don’t flirt with hubris.
However it might be one other case of British technological creativeness not being equalled by enterprise ambition. It’s simpler to start out an organization first within the US and conquer the remainder of the world later than the reverse. But when UK firms don’t consider in themselves, who else will?
john.gapper@ft.com
