MAKO Surgical Goes Public
BY JOHN MCCORMICK, FEBRUARY 17, 2008
On Thursday of last week, MAKO Surgical Corp went public. The Company, which makes robotic arms for minimally inveasive knee surgery, raised an impressive $51 million in capital selling at $10 a share. Although it lost some ground on the first day of trading, Mako was close to fully recovered by the end of Friday at $9.72.
This IPO is proof positive that the markets reward companies for developing innovative orthopedic technology. In this case you have a technology that goes far enough to change surgical technique vis a vis a haptic guidance system that allows the surgeon to achieve what is effectively a knee resurfacing procedure versus a full knee replacement. The company said 181 procedures have been performed using its robotic system since commercial introduction in June 2006. Priced at $10 per share, the market capitalization of Mako is approximately $194 million which is nearly an infinite multiple of revenues. 9 month ended Sept 2007 revenues were only $355 thousand and losses for that period were nearly $13 million.
Mako plans to use the IPO proceeds to expand sales and marketing and continue its research and development. The company will also make a $4 million payment to IBM under a licensing agreement. After all is said and done, you could argue that Mako added enough cash to its existing coffers to keep it going steadily for another 3 to 4 years before the Company has to go back to the market. Company financial details can be found on this prospectus document filed with the Securities and Exchange Commission.
