Robot-Assisted Surgery Driving Medical Robotics Market Growth
The growing use of robotics in medical and surgical settings is providing numerous benefits to healthcare providers—enhancing the capabilities of surgeons, reducing workloads of healthcare workers, improving outcomes, and lessening hospital stays for patients. Although the widespread adoption of robotics has been slow, due primarily to the initial cost, increasing usage of the technologies is driving robust growth in the global medical robotics market. Market size is expected to triple from just over $8 billion (USD) in 2020 to nearly $24 billion by 2027, according to a report by Dallas-based market research firm QualiKet Research, which attributes the growth to “the increase in the acceptance of surgical robots in the economies, favorable reimbursement scenarios for scientific research on medical robots, and the availability of advanced medical robots.”
The overall growth of the market has also been accelerated in recent years by the wider adoption of surgical robots used in minimally invasive procedures. The rising popularity is driven by the advantages provided by the robotically-assisted methods (smaller incisions, reduced pain, faster recovery periods, and considerable cost savings), as well as the greater precision that robot-assisted surgery provides. Used in a wide range of gynecologic, gastrointestinal, heart, neurological and orthopedic surgeries, the process allows the surgeon to view enlarged 3-D images from a computer station, then direct the movements of the robot to perform the procedure using the tiny attached surgical instruments.
Despite the advantages, robotic-assisted surgery is still in its nascent stages. During the product launch of its Hugo™ RAS (robotic-assisted surgery) system in 2019, Medtronic—the largest medical device manufacturer in the world—executive vice president, Bob White, president of the firm’s minimally invasive therapies group, indicated that only 2% of procedures globally are being done robotically (about 10% in the United States).
Data analytics firm GlobalData expects the growth trend for robotic-assisted surgery to continue its upward trajectory, noting in a report published earlier this year that “the primary driver of the robotics market is the increasing number of surgical procedures, propelled by the growing global aging population.” As a result, major manufacturers like Intuitive, Stryker, Johnson & Johnson, and Medtronic are ramping up their research and development (R&D) efforts, and smaller manufacturers are expanding their facilities as they gain traction in the market.
Intuitive is the dominant player in the surgical robotics market with a 71% market share, followed by Stryker (maker of the Mako system for total knee replacements, with more than 1,000 systems having been installed worldwide) with a 15% share. There are more than 6,500 da Vinci surgical systems installed in 67 countries, and the worldwide number of robotic-assisted surgical procedures performed by surgeons using da Vinci surgical systems surpassed 10 million last December. Intuitive is not standing pat, however, investing in large-scale facilities on both coasts.
The Silicon Valley-based surgical robotics giant has received approval to expand its campus by 1.2 million square feet in Sunnyvale, Calif., where the company has long been headquartered. Over the past five years, Intuitive has spent over $100 million acquiring Sunnyvale properties surrounding the current headquarters to build its new campus. Intuitive is also expanding another location in Peachtree Corners, Ga. to create a regional headquarters. That expansion will include the construction of a six-building campus totaling more than 750,000 square feet of manufacturing and engineering operations, state-of-the-art training facilities for surgeons and hospital care teams, and administrative offices. The new facilities will add over 1,200 jobs—mostly skilled—as it opens in phases, with the entire expansion project scheduled to be completed by 2024.
Intuitive is not the only surgical robotics firm that expanded its R&D and manufacturing capabilities in 2021. In the past year-plus, some of their largest and most well-capitalized competitors have expanded operations in an effort to capture a larger market share. Auris Health, an endoscopic robotics company acquired by Johnson & Johnson for $5.75 billion in 2019, leased a 76,000 square foot office/R&D building in North San Jose, Calif.; PROCEPT BioRobotics, which combines multidimensional imaging, robotic, and waterjet technologies to enable tissue removal in prostate surgeries, tripled its space by leasing 158,000 square feet, also in San Jose; Surgical robotics company Stereotaxis opened its 45,000 square foot headquarters facility (R&D/ manufacturing/distribution as well as an operating room for demonstration and training purposes) in downtown St. Louis in March of 2022; and London-based Smith+Nephew, the medical device giant, opened a 67,000 square foot R&D facility in Pittsburgh as well as a robotics innovation center in Munich, Germany.
In the Greater Boston market—a robotics hotbed that is home to Boston Dynamics (makers of the dancing dog robot, Spot), iRobot (Roomba robot vacuum) and warehouse fulfillment specialists Locus Robotics—there are a number of well-financed surgical robotics companies that have been expanding their facilities. A pair of particularly innovative firms, Vicarious Surgical and Corindus, recently signed long-term lease agreements that doubled and tripled their space.
Vicarious, the Bill Gates-backed firm that went public last September, expanded its office, R&D, and manufacturing facilities, relocating from 25,000 square feet in Boston to 72,000 square feet in a pair of buildings in the Boston suburb of Waltham, which now include a full-scale operating room for robotics testing. The firm received the FDA breakthrough device designation for its robot-assisted surgical device that combines human-like mechanical arms with virtual-reality technology, enabling surgeons to perform minimally invasive surgery through a single micro-incision.
Corindus, which was acquired by German medical device company Siemens Healthineers in 2019 for $1.1 billion, expanded from its 35,000 square foot office/R&D/manufacturing space in Waltham to 77,000 square feet in the neighboring City of Newton, an affluent suburb that borders Boston. The new headquarters is a highly-amenitized life science building owned and operated by Alexandria Real Estate Equities, the world’s largest life science REIT. The facility is well-located, immediately accessible from two major thoroughfares (I-95 and the Massachusetts Turnpike) as well as the MBTA, the public transportation system that connects to Boston and Cambridge, home of MIT and Harvard.
"In the big picture, talent is the most expensive component of what we do, so location was key for us."
“We could have gone south where (Siemens) has a pretty good-sized footprint (a pair of facilities totaling 800,000 square feet approximately 25 miles south of Boston) and our rental costs would have been significantly less than the facility we chose,” explains Dean Lee, head of corporate real estate at Siemens Healthineers. “But we felt it was more important to be in the right location to attract talent versus paying less rent. In the big picture, talent is the most expensive component of what we do, so location was key for us.”
Lee says his team considered approximately a dozen buildings before settling on the Newton location, emphasizing that access to public transportation played a “huge” role in the site selection, as did the City’s proliferation of cafés and restaurants. The company also sought a location that would accommodate most operations on a single floor. “When we looked around, we couldn’t find a suitable building with a 60,000 square foot floorplate on one floor, so this building was a rare find,” says Lee. “The flows are so much better when we have that large footprint, where we have the manufacturing (actually light assembly) area, testing, the clean room, and the warehouse all on one floor.” Siemens also negotiated for a dedicated shipping/receiving dock (“We didn’t want to lose a pallet of supplies that could conceivably be worth a couple of million dollars”) and constructed a customer experience area where robotic-assisted surgical procedures can be demonstrated.
Corindus, which develops robotic-assisted vascular interventions for treating coronary, peripheral and neurovascular disease using their CorPath GRX robotic system, have developed technologies that enable surgeons to remotely perform robotic-assisted percutaneous coronary interventions (the opening of clogged coronary arteries) from 3,000 miles away.
At the opening of the new facility in April, Raymond Turner, a practicing endovascular neurosurgeon and Chief Medical Officer at Siemens Healthineers and Corindus, told the gathering that remote robotics will offer treatment modalities that will help bridge the gap between where patients live and the ability to get timely access to care, especially for emergency conditions such as stroke, heart attacks, or other coronary artery diseases, filling a need where there is a shortage of skilled physicians that can offer these kinds of therapies.
“We’re really trying to change things, where regardless of your socioeconomic status, race, and other healthcare disparities, this is breakthrough technology that will help deliver healthcare to people,” said Tuner. “And at the end of the day, what matters is delivering healthcare to patients where they need it, when they need it.”
And as robot-assisted surgery and other medical robot applications become more prevalent, medical device manufacturers will continue to invest heavily in research and development facilities, creating opportunities for CRE professionals—from site location and development to leasing—in this emerging market.