Medtronic's acquisition of Israeli robotic surgical equipment maker Mazor Robotics is in the early innings of success, CEO Omar Ishrak told CNBC on Tuesday.
"It's only beginning to pay off," he said in a sit-down with Jim Cramer of "Mad Money" at the J.P. Morgan Healthcare Conference in San Francisco. "We're delighted with the results that we're seeing and our spine business this last year — ever since I've been here — has had its strongest year, and the robot has played a big role in that."
Medtronic, the medical equipment company based in Ireland, paid out $1.64 billion in late 2018 for Mazor Robotics, which builds spine and brain surgical guidance systems for minimally invasive procedures. Medtronic bought out remaining interest in the firm after a 2016 partnership gave it an 11% share in Mazor.
Medtronic's spine division is within its Restorative Therapies Group, which includes brain, specialty and pain therapies. Revenue in the spine business improved 5.5% to $692 million in the quarter that ended in October. Medtronic also attributed growth in its brain therapies segment to robotics.
Ishrak, who is retiring as Medtronic chief in April, said the robotic-assisted guidance systems are being used in "most major centers" in the United States, but he did not go into details. At the health-care conference in San Francisco, Medtronic said it expects its minimally invasive therapies operations to grow by as much as 150 basis points in the 2022 fiscal year and by as much as 250 basis points by the 2023 fiscal year with the help of its robotic-assisted surgery platform.
The minimally invasive business is projected to reach $10.3 billion by the end of the 2023 fiscal year, up from about $8.5 billion last year, according to FactSet.
"The desire for that is pretty high, but most importantly what it does is it makes the procedures consistent" and "we're integrating it with other technologies, such as our navigation system and eventually our imaging system," Ishrak explained in the interview. "There's a spinal robot, we're also working on a general surgery robot, there's a cranial robot [and] there will be others."
Medtronic has focused on making acquisitions to shore up its minimally invasive and robotic surgery device business. The goal is to stave off growing competition in the cardiac and vascular space, where the company deals in stents and heart pumps.
When Ishrak retires at the end of the current fiscal year on April 27, he will retain his seat as chairman of the board and add the title of executive chairman of Medtronic. Since he took the helm of chief in June 2011, Medtronic stock has risen nearly 208% to date, from about $38 a share to $117.04 as of Tuesday's close. The company mandates that its executives retire at age 65.
Ishrak told Cramer his legacy is defined by the patient base of 75 million people served the prior fiscal year and the team that he worked with.
"When I started, the [patient] number was more like 20 million a year. So just watching that and the impact that has had on people is a huge thing, and I think the company's positioned to extend that further," he said.
Speaking of his successor, Geoff Martha, who currently heads the Restorative Therapies Group, Ishrak said, "I think if he can keep that, sustain it and grow it, that's all I need."