Interview – CMR Surgical has $100m and a plan to keep busy

CMR Surgical has the cash to take it to CE mark.

The company formerly known as Cambridge Medical Robotics has a new name, $100m, and an aggressive plan to grow sales – once its robotic surgery system, Versius, gets CE marked. Now known as CMR Surgical, the group has closed the second biggest European VC round so far this year to fund Versius’s launch, but getting payers on side will involve proving its cost-effectiveness.

“How do you provide robotic surgery economically? You have to drive up use – you have to keep it busy,” says Luke Hares, CMR’s technical director. “If you can keep it operating three, four, five times a day you can provide it at roughly the same cost as manual laparoscopic surgery.”

Annual fee

This is also the argument put forth by the only two companies with marketed large, console-based robotic surgery systems – Intuitive Surgical, long-established and the market leader by a long way, and Transenterix, whose system was CE marked in 2012. If European approval for Versius comes through in CMR’s anticipated time frame – late this year or early next – it might have to fight for a customer base.

An innovative approach to pricing could help. Instead of charging for the machines, or using the razor-razorblade model where the system is sold at a loss and customers charged for disposable components, CMR is signing its users up to a service contract.

“Just as we’ve developed a disruptive sort of technology, we are trying to bring it to market in a fairly disruptive way,” Mr Hares says. “With a managed service agreement what you’re going to be looking at is a number of years’ commitment, an annual fee, but then the disposables, the instruments, are all included.”

This means surgeons do not have to worry about how many instruments they are using for a particular procedure, he says, and is intended to encourage frequent use of Versius. He declines to state what the fee is, but says that it will be competitive with the other systems. For reference, Transenterix’s Senhance and Intuitive’s Da Vinci systems sell for around $2m, with service agreements on top.

CMR is seeking a CE mark for general indications, but in practice the system will be used for pelvic, abdominal and upper gastrointestinal procedures, such as hysterectomy or gall bladder removal.

CMR reckons it can place half a dozen Versius systems, probably in UK hospitals “very quickly” after the product is CE marked. Analysts from Ladenburg Thalmann suggest that Transenterix will have an installed base of around 17 Senhance machines by the end of this year; more than 4,000 of Intuitive’s Da Vinci machines have been installed worldwide.

Oxford vs Cambridge

The 200-strong Cambridge company is not put off by Intuitive’s apparently unassailable lead. And neither are their investors: the $100m series B announced on Monday clocks in just behind Oxford Nanopore Technologies €100m ($140m) raise in March in the rankings of this year’s European VC rounds. Even on a worldwide basis CMR’s fundraising is still in the top 10.

Top five VC rounds by European companies of 2018
Date Round Company Country Investment ($m)
March 26 Undisclosed Oxford Nanopore Technologies UK 140.0
June 4 Series B CMR Surgical UK 100.0
January 30 Series C Fire1 Ireland 47.0
April 16 Series C Limflow France 33.5
January 4 Series D Miracor Medical Systems Austria 29.4
Source: EvaluateMedtech

This ought to take the company through the approval process and into the commercial phase, Mr Hares says. But it is unlikely to be the company’s final fundraising.

“If you look at the obvious comparison which is Intuitive, they’ve raised about a billion dollars. I don’t know if we need to raise quite that much but … if we want to scale the business as fast as it can be scaled, the sensible thing to do would be to raise more money.”

If CMR’s backers are hoping for an exit in the short term, then, they will be disappointed.

“We’re not a technology company, we’re not looking to be bought as soon as we’ve demonstrated the viability of the idea,” Mr Hares says. “We have a long list of other things we want to be doing, but critically those other things are only really possible if you scale, and are making and selling large numbers of these systems.”


But competition might soon intensify. Medtronic is working on a robotic surgery system, though details are scant and in its analyst call yesterday it said the planned launch date has been pushed out by a year to 2020. Verb Surgical, the joint venture between Johnson & Johnson and Google’s sister company Verily Life Sciences, is even more secretive, but is thought to be about a year away from market with its system.

One thing that might help CMR contest the market outside Europe, albeit in several years’ time, is the participation of Zhejiang Silk Road Fund in its series B. The fund is state-owned, and Mr Hares says that there are advantages to having a prominent Chinese investor.

“China is undoubtedly going to be a very important market in the future. It’s one that we’re approaching cautiously – we’ve had the opportunity to take Chinese money before and we haven’t,” he says. He describes CMR’s careful approach to the huge Chinese market as “baby steps”.

CMR might appear to be following Intuitive’s example: building itself into a major player by scaling up production as fast as possible and going public more or less immediately. Intuitive listed in 2000, just before it received US approval for its first Da Vinci system.

In fact CMR is as keen on going public as it is on being bought; to wit, not at all. “I think not being public gives us a bit more freedom than Intuitive have got,” says Mr Hares. “You don’t have to tell the world what you’re up to.”

To contact the writer of this story email Elizabeth Cairns in London at or follow @LizVantage on Twitter

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