Stryker buys sensor maker in bet on wearables in orthopaedics

Dive Brief:

Stryker on Tuesday said it acquired privately held OrthoSensor, a Dania, Florida-based maker of sensor technology for use in total joint replacement procedures. Financial terms were not disclosed.
Smart sensor technologies including intraoperative sensors, wearables and smart implants are expected to play an increasing role in orthopaedics, with real-time measurement of data aiding patient recovery, Stryker said in announcing the acquisition.
Analysts at SVB Leerink gave the deal a thumb's up in a Tuesday note, saying it complements Stryker's robotics platform and will enhance the company's data analytics capabilities.

Dive Insight:

CEO Kevin Lobo in October said Stryker's M&A teams were "back up and running" following the company's $4 billion acquisition of Wright Medical. That deal was officially completed in November after a year of regulatory scrutiny that saw Stryker commit to divesting its total ankle replacement and finger joint implant product lines to Colfax subsidiary DJO Global to satisfy U.S. and U.K. regulators' antitrust concerns.

Founded in 2007, OrthoSensor's devices use proprietary sensor and communications technologies to provide quantitative feedback to surgeons and hospitals with the aim of supporting evidence-based decisions.

The company's Verasense intraoperative sensor has been used with Stryker’s Triathlon Knee System since 2011 to help with balancing the knee. The Kalamazoo, Michigan-based medical device maker said it will also incorporate OrthoSensor's technology in its Mako robotic system to enhance workflow through a data-driven feedback mechanism. In addition, OrthoSensor's MotionSense remote patient monitoring wearables and mobile application is expected to boost Stryker’s data analytics.

"This deal is highly complementary to (Stryker's) robotics platform and will further enhance the company's data analytics capabilities — a critical element to the evolution of computer assisted surgery and optimization of robotic surgery," the SVB Leerink analysts said. The acquisition also gives Stryker "a path to smart implant development, an area that we think will be increasingly important for ortho players going forward as the emphasis on data collection and analytics continues to intensify across the continuum of care."

OrthoSensor's acquisition by Stryker would appear to be a blow for orthopaedic rivals Zimmer Biomet and Smith & Nephew, both of which have used the sensor maker's technology with their knee replacement systems. Zimmer Biomet signed a co-marketing partnership with OrthoSensor in 2013. The company's Verasense technology received FDA 510(k) clearance for use with Zimmer Biomet's Persona Knee System in 2018 and then gained 510(k) clearance last April for its alignment capabilities to be used with the knee implant system.

SVB Leerink analysts noted Zimmer Biomet has now partnered with OrthoSensor competitor Canary Medical.

Smith & Nephew partnered with OrthoSensor for use of Verasense with its Journey and Legion knee systems to quantify soft tissue balance. The two companies signed a co-marketing agreement in 2014.