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SURGICAL ROBOTICS

MAY 13, 2016 | V ol . 3, No . 8

Verb Surgical

Surgery in the

Digital Age

KEY POINTS
n Johnson & Johnson and Verily, Googles life
sciences company, have joined together to
create Verb Surgical, which hopes to develop
a new platform in surgical robotics that blends
Ethicons expertise in surgical devices with
Verilys expertise in high-tech capabilities like
advanced analytics and enhanced visualization.
n Verb executives concede that surgical robotics pioneer and leader Intuitive Surgical has
done an excellent job of launching the robotic
revolution but argue at the same time that with
advances in technology, surgeons want more
and that robotics per se are only part of the
value equation.
n Certainly, Ethicons deep background in surgical tools, close relationships with customers,
and a strong presence in the operating room
provide an important base for Verb. But it is the
information technology component that has the
potential to create a truly disruptive technologyone that by incorporating Big Data and data
analytics, can enable better decision-making in
the OR.
n No small part of what Verb is trying to do lies
in democratizing robotics and, by extension,
surgery itself, bringing advanced technology to
ORs around the world with an affordable system.
Verb's platform represents the latest revolution
in surgery, something theyre calling Surgery 4.0.

THE MEDTECH STRATEGIST

by
DAVID CASSAK

The challenge for medical device companies over the


past decade or so has been that the twin impulses that
drive medtech developmentadvances in technology
and crippling health system cost pressurestoo often
drive in opposite directions. Twenty or even ten years
ago, device companies were routinely rewarded for
even incremental improvements in technology with
price increases and high margins as physicians and
surgeons turned eagerly to new tools that promised to
deliver better patient care.
No more. Today, device companies often find customersnow defined more broadly than just physicianspushing back against costly devices that might
enable better outcomes but dont reduce the costs of
a broader episode of care. Still, the temptation to see
device development in purely technological terms is
heightened today because of the new capabilities of
information technology that, having infiltrated all other aspects of our lives, are beginning to make in-roads
into healthcare.

2016 Innovation In Medtech, LLC. All rights reserved.

SURGICAL ROBOTICS

From sensor-based devices and enhanced imaging to advanced analytics and machine learning, the new technology
horizons that companies like Apple, Samsung, and, most of
all, Alphabet/Google have brought forward are being incorporated into products that, in some cases, enhance the therapeutic impact of those devices, and, in others, generate a
whole new category of products.

surgery, democratizing the technology with lower priced options that allow for a wider dissemination around the globe
while incorporating capabilities like advanced analytics and
enhanced imaging that bring surgery into the Digital Age.
(Since Googles recent reorganization and name change,
Google and Verily, which used to be known as Google Life
Sciences, are now divisions of Alphabet.)

Pharmaceutical companies have already begun to tap


into information technologies, for example to drive better
compliance to drugs or, through Big Data, to more precisely
identify target populations. But the medtech industry seems
particularly well-positioned to adopt and benefit from the
fruits of high techin part because they are very often
device-based, in part because, medical devices are usually
somewhat passive in the role they play.

Reading the Landscape

Perhaps not coincidentally, the growing role of information technology comes at a time when robotics, the medtech
industrys original futuristic technology, seem to be taking
off. For a lot of different reasons, the uptake on surgical robotics was slow for a long timeonly industry leader Intuitive Surgical Inc. achieved realin fact outstandingsuccess, although as more of an outlier than an exemplar. More
recently, thanks to companies like Blue Belt Technologies
(now part of Smith & Nephew plc), TransEnterix Inc., Titan
Medical Inc. and Corindus Vascular Robotics Inc., to name
just a few, robots are hot again.
Big deals like Stryker Corp.s $1.6 billion acquisition of
Mako Surgical, and Auris Surgical Robotic Inc.s ability to
raise $230 million in early financing from hedge funds attest to the new perceived value around robotics. And with
a market cap that in early May stood just over $23 billion,
any attempt by one of the big multi-national device giants
to take out Intuitive would, factoring in an acquisition premium, likely price the company higher than the $21 billion
Johnson & Johnson paid for Synthes a couple of years ago
and even higher than the $25 billion Abbott Laboratories
has offered for St. Jude Medical.
What would happen if you could marry robotics with the
enhanced capabilities of high tech? Could you, at once, reconcile the twin dynamics of advanced
technology and cost reduction, with
technology that both enhances outcomes and reduces costs through better,
more efficient procedures? Thats the
promise of Verb Surgical Inc., the joint
venture launched last year by surgical
device giant, Johnson & Johnson and tech leader Alphabet
(formerly known as Google). Through their respective operating companies (Ethicon and Verily), J&J and Alphabet
hope not just to develop a better robot, but to transform

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As noted, surgical robots per se are far from new. Intuitive


pioneered robotic surgery more than 20 years ago. So what
accounts for the heightened interest these days? Recently, argues Verb CEO Scott Huennekens, surgical giants like
J&J's Ethicon and Covidien have realized that both Intuitive
and robotics as a platform would start to encroach on and
threaten their businesses over time. And, in fact, Medtronic plc, too, recently acknowledged that it has launched its
own program in robotics (see Top Stories of 2015: The Year
in Review, Digital Collaboration: MedTech Meets HighTech,
The MedTech Strategist, January 16, 2016).
Dave Herrmann, Verbs VP of Marketing, worked at Ethicon Endo-Surgery and Ethicon Inc. for nearly eight years, followed by a two year stint at J&Js Vision Care business, before
joining the J&J/Verily joint venture late last year. Herrmann
believes that if the surgery giants were late in embracing robotics, its because they were assessing the landscape and
seeing what their options were. Those options, he says,
included building their own robots, working with Intuitive
to provide surgical tools for its da Vinci system, and, taking
a more distant stance, providing educational programs on
robotics, helping their surgeon customers figure out when
robotics are appropriate for a procedure and when not.
In a certain sense, Verb embraces and combines all three,
providing J&J with a proprietary system (albeit co-owned
with Verily), a platform for Ethicons other surgical tools
and devices, and an important educational tool for its customers. That said, it is Alphabets contribution of expertise
around information technology (IT) that will truly differentiate Verbs system from others currently on the market. J&Jor Covidien, for that mattercould have bought
Intuitive at any time over the past 20
years, granted its astronomical share
price, but its unlikely that any robotic
platform developed by the surgical giants, either alone or in partnership
with (or by acquiring) Intuitive, would
have produced a significantly different
robot than those available today. (For a different perspective, see Where Do Surgical Robotics Go from Here?
An Interview with Fred Moll, The MedTech Strategist, February 29, 2016.)

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MAY 13, 2016

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SURGICAL ROBOTICS

A Surgical Solutions Company


Indeed, Verily/Alphabets contribution to Verb represents
something that neither pure-play surgical instrument companies like Ethicon nor, for that matter, robotic companies
like Intuitive could bring to the table, including capabilities
like advanced software and systems architecture, cloud
computing, dashboards and augmented reality displays,
analytics built around Big Data, advanced visualization and
optics, machine learning, and cybersecurity to name just
a few (see Figure 1) Theyre one of the biggest players in
the world in cloud services, and Alphabets platform is one
of the most advanced AI [artificial intelligence] machine
learning platforms available, says Huennekens. The tech
giant has world-class capabilities in developing user interfaces and user experiences across everything from YouTube
to Google Search to any number of consumer-interfacing
products they offer. And we have an opportunity to include
that technology in our systems.
Indeed, if Verb represents a kind of marriage of Ethicons
surgical expertise with Alphabets high-tech capabilities, the
question the joint venture implicitly raises is, to what degreeif at allcompanies that only possess surgical expertise can incorporate the high tech capabilities that are part of
Alphabets offering into their systems. Technologies evolve
and different opportunities present themselves over time,
Huennekens says. Intuitives successstate-of-the-art technology and an astronomical market caphas been fabulous, he goes on. In key metrics of robotics capabilitiesprecision and control, visualization, marketability, and physician
ergonomicsthe da Vinci system does a very good job in all
of them, he says.
Figure 1

The Marriage of Surgery and High Tech

But looking ahead, Huennekens goes on, the time has come
to think of a future in which were moving from large robotic
systems to something entirely different, something Verb is
characterizing as Digitally-enabled Surgery, a technology platform that embraces, at once, small robotic systems and advanced surgical tools, as well as advanced visualization, machine learning, data analytics for performance tracking and
benchmarking, connectivity both inside and outside the OR,
and more. Its a more comprehensive, holistic approach to
surgery, which is why Verb describes itself not as a next-generation robotics company, but as a surgical solutions company. And robotics is only part of that, says Huennekens. I
think Intuitive defines itself as a robotics company. Were not
a robotics company.
In its embrace of Verily as a partner, J&J, too, is acknowledging that robotics is only part of the equation. Even before joining forces with the tech leader, J&J had spent the last three
or four years in a partnership with SRI International (formerly
Stanford Research Institute)interestingly, the organization
that developed the technology that became Intuitives da Vinci
20 years agoto focus on enhancements in the robotics platform itself. SRI has a tremendous capacity in robotics used
in defense, industrial, consumer and medical markets, says
Huennekens. (J&Js work with SRI will become part of Verb.)
At the same time, incorporating an expertise in surgical
technology and the OR is just as critical to Verbs vision.
Huennekens notes that Verb will focus its relationship on
Verily, which will link Verb into areas of Alphabet that work
on Big Data and machine learning initiatives, and other programs in advanced visualization, connectivity, video analytics, and proctoring, as well as more tech-specific capabilities
such as user interfaces and experiences with augmented
reality and decision-making tools.
Theres a whole host of technologies that Verily and Alphabet bring
to the table that we can use in conjunction with the robotic technology J&J has been developing with
SRI, he says.

Direct Patient
Access, HighlyFlexible, Expanded
Reach

Advanced Imaging

Procedure-Enabling
Advanced Tools

Data-Driven Surgery

Source: Verb Surgical Inc.

THE MEDTECH STRATEGIST

Transforming the OR
In visualization, for example,
Verb hopes to capitalize on Verilys expertise in imaging to do advanced anatomical and pathological identification of tissue states.
And in an OR with intra- and interoperative connectivity, data and
imaging come together to allow
for experience sharing, remote
guidance, and tele-monitoring.

2016 Innovation In Medtech, LLC. All rights reserved.

SURGICAL ROBOTICS
Certainly, Ethicons deep background in surgery, surgical instruments and tools, close relationships with customers, and
strong presence in the operating room provide an important
base for Verb. But it is the high-tech component that has the
potential to create a truly disruptive technology. Huennekens
offers an example of the role that big data and data analytics
can play in better decision-making in the OR. We can envision a world in the future in which we take 10,000 prostate
surgeries and run them through an algorithm that produces
a tremendous amount of learning relative to things like anatomy, task learning, performance, and things like that, he
says. Those things can then be built into the device. Instead
of the conventional model in surgery which emphasizes the
uniqueness or individuality of each procedurethe see-one,
do-one, teach-one modelVerb envisions a platform that incorporates big data and data analytics and, aggregating the
experience of thousands and thousands of procedures, offers a cumulative learning experience that can be part of
the tools the surgeon uses, he goes on.
And just as important as improved clinical outcomes and
surgical techniques, theres also an economic play here.
Positioning itself as a surgical solutions company, Verb executives see themselves not just advancing surgical technology by incorporating digital high tech capabilities, but in
the process also democratizing surgery. That means bringing robotic platforms to surgeons working in hospitals that
cant afford $2 million systems. We want to bring the capability to advance surgical procedures to all geographies
of the world in any economy, says Huennekens. Indeed, in
emerging markets where there are few resources in each
facility and an often smaller clinical base, Verbs platform,
he goes on, can be very effective in helping with training,
proctoring, and market adoption.
In such a vision, the technical and clinical capabilities of
robotics is only a part of the value proposition. During his
days as CEO of Volcano (now part of Philips Healthcare)
Huennekens and his team did extensive research into how
hospitals used expensive capital equipment such as the
IVUS (intravascular ultrasound) systems Volcano manufactures. They found that hospitals want platform technologies that have broad applicability and are constantly
in usetechnology that is connected to everything else in
order to optimize its impact, whether in the cath lab or the
operating suite. Way more often than not, he says, standalone IVUS systems sat in a hall way, waiting to be used.
Nothing that had wheels on it was ever used more than
10% of the time, he says. Once we integrated it and put
multiple apps on it, it was used in 40-50% of the cases.
Huennekens believes Verbs surgical solution platform will
face the same challenge: the equipment has to always be
there, always be on, integrated and serving multiple applications, he says. Robotics is just one of the technologies
well offer in transforming the OR.

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Connectivity Encourages Adoption


Connectivity, mobility, and broad applicability are critical to Verbs concept of a new surgical reality. Huennekens
draws parallels with more mundane technologies. Mobility means the difference between using a mobile phone
and a rotary phone thats nailed to the wall in your house,
he says. About connectivity, he points out, if every time
you wanted to use the air conditioning in your car, you had
to carry an air conditioning unit to your car, plug it in, and
make sure it synced with all of the electrical systems, youd
rarely bother, he notes. Maybe on cross-country trips in
the summer, he says. But you wouldnt use it on a day-today basis. Making sure that Verbs technology is connected
to other devices and pieces of equipment and is broadly applicable eliminates the frictions of use, says Huennekens.
Certainly ease-of-use is part of the value proposition, but
its also about dramatically enhancing or augmenting the
value of the tools surgeons have at their disposal. And in
an OR environment that today is dominated by stand-alone
equipment and individual tools, what Verb calls single point
solutions and a lack of integration, the vision of a connected
OR is truly transformative. In todays OR, says Huennekens,
Everything is siloed; theres no integration of information in
a way that augments or builds on itself. In the future, everything, including non-clinical functions, will be integrated.
Thats why Verb describes what its doing as disruptive not
just from a technological perspective, but from a businessmodel perspective as well, with implications far beyond the
OR, including supply chain management.
Verb executives believe that as robotic systems connect
with and enhance other aspects of the hospital and OR
theaters, adoption and use will soar. Indeed, for all of the
success of Intuitive Surgical and the current buzz around
robotics in general, Dave Herrmann points out that robotic
surgery today is still a niche. In urology, gynecology, thoracic and general surgery, more than 12 million surgeries
are performed around the world each yearthat number
is closer to 20 million if one includes orthopedics and head
and neckbut only about 650,000 of them are done using
a robot. Its less than 5% of the total, says Herrmann, who
argues that the real issue isnt whether a robot is used, but
whether the procedure is done in an open or minimallyinvasive manner. Verb believes that around 50% of all surgeries could benefit from some form of robotic technology,
plus some of the other tools were bringing to the table
around machine learning, advanced visualization, and other technologies, Herrmann says.
Verb will initially focus on a subset of 12 million surgeries
in urology, gynecology, thoracic and general surgery but
when you look at our technology, it can apply more broadly
than just those areas, adds Huennekens. Verbs platform

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MAY 13, 2016

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SURGICAL ROBOTICS
will be both vertically and horizontally applicable, he goes
on, meaning it can embrace procedures in other clinical
spaces as well as those of varying degrees of complexity
(see Figure 2).

Why Now?
Twenty years ago, it seemed as if large surgical device
companies like Ethicon and US Surgical were little interested
in the robotic revolution that Intuitive was launching. Perhaps that was because they were skeptical of the reach and
attraction of the new technology; perhaps it was because the
business model was so different. To companies with a strategy built around selling high volumes of disposable instruments, multi-million dollar pieces of capital equipment were
hard to wrap their minds around.
But those days are over and both Ethicon and Covidien
(which embraces the former US Surgical business) are now
making aggressive pushes into advanced robotics. Michael
Del Prado, Group Chairman for Ethicon, notes that Ethicon
has had a long history of shaping the future of surgery with
the goal of improving the standard of care in surgery globally. Key to that, he goes on, has been developing new tools
that drive the adoption and penetration of minimally-invasive
surgery (MIS). In surgical sub-segments like bariatrics and
others, he says, penetration of minimally-invasive surgery is
more than 90% today, much of that due to better instrumentation that enables surgeons to perform more complex proFigure 2

Minimally Invasive Procedure Penetration


(US, 2015)

*Laparoscopy

Source: Verb Surgical Inc.

THE MEDTECH STRATEGIST

cedures, such as, but not limited to, tools that allow for better
articulation and powered motion in endo-cutters and energy
devicesin the process overcoming early opposition to MIS
on the part of many if not most surgeons. We now make
[our instruments] smaller in order to access difficult anatomies and address intraoperative complications, he notes.
Weve been able to build a number of fairly large and successful platforms in surgery.
Ethicons recent embrace of robotics is, in that context, yet
another stage in the companys efforts to build on technology
that enables and enhances MIS. I think its been proven that
robotics will play a key role in further driving the adoption
of minimally-invasive surgery, especially in procedures where
the anatomy is difficult to access, Del Prado goes on.
As noted, J&Js first steps in developing a robot began well
before the collaboration with Alphabet was announced, and
the decision to launch Verb reflects in many respects a maturation of both robotics technology generally speaking and
J&Js innovation efforts more specifically. Asked why Ethicon is jumping on the robotics band wagon now, Del Prado
notes, Over the past few years, weve engaged a number
of stakeholders and customersrobotic users, robotic rejecters, and even economic decision-makersin order to
understand the unmet need as far as robotic surgery is concerned. I believe weve gained a lot of insights and knowledge
in this space. We think this is the right time to take robotic
surgery to the next level.
J&Js early research focused on
what Del Prado calls gaps in the current robotics offerings and aspirations about where robotics should
go, and led the company to SRI, the
Palo Alto-based research firm that
has done extensive and pioneering
work in robotics in a number of industries. Says Del Prado, A few years
ago, we started working with SRI to
firm up the concept, validating the
unmet need in robotic surgery and
the technical feasibility of the work
that were trying to do, and together with SRI I think we were able to
build not only a concept but a good
prototype that we could bring into
product development with some enhancements.
In turn, Ethicons work with SRI
led to the joint venture with Verily.
Ethicons discussions with doctors
suggested that physicians, on the
whole, are eager and excited to

2016 Innovation In Medtech, LLC. All rights reserved.

SURGICAL ROBOTICS
hear about our collaboration with Verily and Verb, says Del
Prado. The partnership has drawn a lot of kudos and enthusiasm across the board, an excitement that stems, he says,
from the vision of taking robotic surgery to something different, a transformative platform. Del Prado notes that there
are lots of companies with the capabilities to develop surgical
robots and a number of companies already in that space. The
partnership of Ethicon, Verily, and Verb, however, represents
something different, as the joint effort capitalizes on the capabilities of each.
In Ethicons case, says Del Prado, that means offering insights into advanced surgical devices and instruments as
well as into what goes on in the OR. Del Prado points to
Ethicons global footprint in both technology and surgeon education and notes, about the former, that the advances Ethicon has introduced over the years lend themselves to expanding [the companys offering] into robotic
surgery. That expertise, combined with the tech capabilities of Verily, especially around data aggregation and analysis to better inform surgeon decision-making, will create
a platform thats truly distinguished from incumbent technologies in terms of advanced imaging, machine learning,
and augmented reality, he says.

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tion and experience [in the market] around dexterity, reach,


and visualization, he says. Our system needs to have that.
But those capabilities are only the beginning. Ethicons
discussions with its customers identified critical needs in
areas such as better work flow, greater flexibility in how surgeons interact with both the patient and the robot, and better decision-making in general, with a goal, says Del Prado,
of making the surgeon and the procedure better. Ethicon
even envisions a platform that is expandable, that is, one
that will work just as well in enhancing work flow and decision-making with hybrid procedures, those in which part of
the procedure is done using robotics technology and part
with more conventional techniques, as well as with pure,
non-robotic MIS (see Figure 3) . Democratization also means
developing a system that costs less so that hospitals all over
the world can access robotic surgery affordably.
For now, J&Js robotics efforts are being spearheaded by
the companys surgical device operating company, Ethicon.
But Del Prado says, he could see sharing its insights and the
platform with other operating companies, such as DePuy.
After all, orthopedics has been a major target of robotics
companies, from early plays like RoboDoc (from Curexo
Technology Corp.), to more recent companies like Mako
Surgical and Blue Belt Technologies. I think were always
looking for ways to leverage and define synergies, he says.
There has to be a base offering and were very focused
right now on making sure we deliver on that. But as we gain

Verilys contribution is critical because it will help Verb deliver something that, in J&Js thinking, redefines robotics. Del
Prado says that as Ethicon executives discussed the direction of their robotics effort, they came to the conclusion that
the best approach to truly deliver a
transformative technology lay not
in simply delivering a robot that is
Figure 3
an extension of the surgeons hands.
The Evolution of Surgical Robotics
That wouldnt suffice, he says. Indeed, Ethicon officials believe Intuitive had done that and done it well.
Rather, Del Prado says, the promise of really advancing the standard
of care lies in connecting all of these
capabilities, i.e., Ethicons strong
foot print and advanced instrumentation with the capabilities of Verily.
We believe thats the way to deliver a truly transformative platform,
he says.
Del Prado says that the vision and
goal of Verbs advanced robotics is
really to democratize surgery. That
said, hes far from dismissing out of
hand conventional surgical robotics.
The solution were trying to deliver
needs to incorporate some traditional robotics benefitsthats the
ticket to play and theres an expecta-

Past

*MIP=Minimally Invasive Procedures

Source: Verb Surgical Inc.

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MAY 13, 2016

16

SURGICAL ROBOTICS
more insights and more experience in the field, the potential to expand into other areas will be there.
Building on a robust and well-tested product concept,
Del Prado argues that the superior capabilities across the
partners, Ethicon, Verily, and Verb, should make the robotic system that emerges that much more powerful. I think
the team that weve put together in the creation of Verb can
deliver on a very compelling vision, he says.

Collaboration, Not Competition


Having successfully sold Volcano to Philips in early 2015,
Scott Huennekens was more interested in sitting on some
boards than jumping back into a start-up when a recruiter
encouraged him to talk to J&J executives about the Verb
CEO position. Huennekens was leery at first, but soon got
excited about what J&J and Alphabet are trying to do. I can
really only think of one or two areas in medtech that are
legitimately $10-20 billion opportunities, he says. This is a
$10-20 billion opportunity that translates directly to patient
impact. He adds, This is going to transform surgery.
That impact on surgery and patient care are certainly central to what Verb is trying to do. But the company is also intriguing for its technology implicationsfor the way it takes
high tech concepts that have transformed virtually every
other aspect of our lives and applies them to medical technology. Over the past several years, as high tech companies
like Google, Qualcomm, and Samsung have shown an ever
greater interest in healthcare, theres been much speculation about the role these tech giants will play, especially in
medical devices.
In pharma, things like patient tracking and Big Data have
clear and complementary implications, but no one is suggesting that Alphabet or Samsung are going to be active
drug discoverers or developers. But the role of high-tech in
medtech is different. While tech companies clearly wont
bring drugs to market, they are introducing devices. If wearables and other consumer-oriented plays seem far removed
from, say, TAVR or orthopedic implants, tech devices that
monitor patients, provide real-time feedback, and bring connectivity to patients and their physicians legitimately play a
role in enabling care and enhancing the therapeutic impact
of more traditional devices. Moreover, the ability of these
new tech solutions to transform conventional medtech cant
be ignored (see Medtech: Whats in a Name? The MedTech
Strategist, March 16, 2016). Weve got two of the top ten
market-cap companies in the world collaborating to transform an industry, says Huennekens about the opportunity
he saw. Thats a very interesting and compelling situation.
Certainly some of the appeal of the joint venture lies in
bringing together two extremely strong brands in their respective fieldsEthicon in surgery and Alphabet/Verily in

THE MEDTECH STRATEGIST

advanced data analytics. As Michael Del Prado notes, Our


partner [Alphabet] really owns the data space; theyre the
most respected search engine in the world and their capabilities are appreciated not just by surgeons but by economic decision-makers as well. I think one of the things that
attracts them [i.e. surgeons and hospital executives] to our
partnership is the promise of what this can deliver. Together, he says, our capabilities in surgery and theirs in terms of
managing data and providing analytics have really elicited a
lot of excitement with our customer groups.
Why then create a separate company and brand around
Verb? Why not ride the wave of interest in bringing together
two powerhouses like J&J and Alphabet? Because, say executives from both companies, the joint venture is about
more than just a marketing play, more than just an attempt
to capitalize on two strong brands. Says Ethicons Michael
Del Prado, Very clearly, the creation of Verb allows [Verb
executives] to move with a lot of focus and speed. And I
think theyve demonstrated that already. At the same time,
he goes on, Ethicon officials continue to lend [Verb] a lot of
support in terms of interfacing with the platform and with
our advanced instrumentation while Verily continues to
provide [Verb] with technological assistance to capitalize on
the core capabilities of Verily.
More broadly, given the resources, both technical and economic, that tech companies like Google and Samsung bring
to bear, some medical device executives have begun to wonder about the role that high tech and, more to the point, high
tech giants will play in the future. Phrased differently, some
have asked whether the medical device industry of the future
will be dominated not by companies like Medtronic and J&J,
but by companies like Alphabet/Verily and Apple.
Verb suggests another possibility: that the future relationships between medtech and high tech will be more collaborative than competitivean implicit recognition, perhaps,
that for all of the resources each brings individually, neither
J&J nor Alphabet could do alone what both can accomplish
together. Perhaps thats why, notwithstanding the strong,
recognizable worldwide brands of each company, executives at both companies felt it was important to give the
joint venture a name that plays off neither: Verbmeant to
suggest action, movement, progress.
Notwithstanding the resources their two giant partners
bring, Verb executives embrace the culture of a start-up. J&J
and Alphabet are major backers and they sit on the board,
notes Dave Herrmann. But this was always meant to be an
independent company with the ability to move quickly and
attract top talent into a start-up environment, which will allow us to make this happen as quickly as possible. Adds Scott
Huennekens, Verb is about trying to create the innovation,
creativity and urgency that come in a start-up environment.

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SURGICAL ROBOTICS

An Open System
Not that Verb is running away from its relationships with
J&J and Alphabet. Says Huennekens, We want to be able to
leverage all of the benefits of Alphabets and Verilys technology and J&Js global footprint and market leadership
but retain the benefits of a start-up. Today, Verbs board
includes two J&J representatives and two Verily representatives and meets quarterly. We run exactly like a VC-funded
start-up, he noteswith all of the funding provided by
Verbs two joint venture partners.
Verb has enough capital to operate for the next four
years, long enough, Huennekens says, for the company to
launch its first robot, and can also draw on non-monetary
resources of its partners, if the need arises. The company
had about 40 employees at the end of last year and expects
to have closer to 100 by the middle of this year, a figure
that doesnt include the teams from SRI, J&J, and Alphabet
who are also working on the project. (Independent of its
relationship with Verb and J&J, SRI, who serves Verb as a
contract vendor doing work in R&D rather than as a joint
venture partner, has recently spun out two other healthcare-oriented robotic systems.)
Adding the resources of SRI, Ethicon, and Verily to its own
100-person staff, Verb has the wherewithal to do much of
its technology development in-house. Even before the official launch of the company, Verbs partners had invested
$50 million in early efforts to explore what a novel robotics
system might look likeand that doesnt include the hundreds of millions of dollars that both Alphabet and J&J have
invested over the years in relevant independent research
that will help drive Verb going forward.
In addition, even with all of the firepower that Verbs
founders bring to the table, Huennekens says the company
is positioning its platform as an open system and is willing
to consider collaborations, either through acquisition or
some kind of licensing arrangement, with other start-ups
developing novel technologies. Those might include surgical tools conventionally-described and apps that enable
some more high tech-oriented capabilities. Huennekens
says he can envision a scenario where, in a narrow market
of, say, 20,000 annual procedures, Verb might not identify
the opportunity as a high priority, but another company
comes along with a tool necessary to do that procedure.
Will we find a way to make sure that tool can work on our
platform? he asks. Absolutely.

Surgery 4.0
Asked if J&J considered any partners other than Alphabet/Verily in launching its robotic program, Michael Del
Prado notes that potential partnerships are something we
look at constantly everywhere. Verily is a terrific partner in

17

this venture. But like Huennekens, Del Prado goes on to say


that Ethicon, too, wont object to bringing other companies
onto the platform, if the opportunity is there, especially if
the technologies those companies bring are outside [Ethicons] core capabilities. Says Del Prado, This is a complex
project that will require a lot of other partners to bring it
to fruition. Even with Ethicons already large footprint in
the OR and its history of driving innovation in surgery, he
believes bringing other companies into the mix will drive a
lot of value for our customers.

Some have asked whether the medical


device industry of the future will be
dominated not by companies like
Medtronic and J&J, but by companies
like Alphabet/Verily and Apple.
That said, clearly Verbs strength, its defining characteristic, lies, as noted, specifically in the collaboration of J&J
and Alphabet and in the complementary capabilities that
each corporate partner brings: Ethicon, a leader in surgical technology; Alphabet, with its pioneering work in things
like machine learning, big data, and augmented reality. But
just because you can build a powerful new robot doesnt
mean that surgeons will use it. As Dave Herrmann notes,
current robotic systems account for only 3-5% of all surgeries worldwide and in clinical spaces like orthopedics in
particular, the response to new robots has historically been
chilly. Surgeons, especially general surgeons, have traditionally been a conservative lot, especially when it comes
to new technology. What makes Verb executives confident
surgeons will more eagerly adopt a next generation robot?
Huennekens concedes that the path to new technology
adoption isnt always smooth. Any time you have an established market, there are friction points as it evolves, he
says. But Verbs foray into what it calls digitally-enabled surgery represents what Verb executives believe constitutes
the fourth major advance in surgery; Call it Surgery 4.0,
he says. If Surgery 1.0 was open surgery and Surgery 2.0
came with the introduction of minimally-invasive surgery,
then the first generation of robots was Surgery 3.0, he says.
The marriage of a robotic platform with the capabilities of
high tech ushers in a new, fourth stage.
The response weve gotten from physicians is off the
charts, Huennekens says. Physicians want to work with
us. Theyre very open to the idea of advancing surgery to
the next level. Just as importantly, if surgeons have been
slow to adopt new technologies in the past, he insists, its

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MAY 13, 2016

18

SURGICAL ROBOTICS
not all their faultdevice companies share the blame. Its
a common complaint about the evolution of MIS beyond
lap cholecystectomy, and one of the foundational myths
of first-generation robotics. While MIS was popular with

The company is positioning its platform


as an open system and is willing to
consider collaborations, either through
acquisition or some kind of licensing
arrangement, with other start-ups
developing novel technologies.
patients, employers, and payors surgeons hated it because
the early MIS instruments were stiff and difficult to operate, making more complex procedures uncomfortable for
surgeons and potentially dangerous for patients. I think
theres an opportunity now to create value for surgeons
and hospitals in a way that will drive MIS adoption well beyond what was historically possible with [existing] laparoscopic tools and training, Huennekens goes on. Its time
for Surgery 4.0.
Such a platform represents the gateway to the 21st century OR, says Huennekens, and would feature data aggregation, physiologic sensors, smart navigation, new visualization systems, and semi-autonomous feature sets, among
other capabilities that he says constitute what might be
called a form of Google-ness. (Huennekens notes that
there is even a Google-ness to [Verbs] name, suggesting
a cultural affinity with the tech giant.) Such an approach differs from, say, Googles high profile driver-less cars which
are fully autonomous: the driver is a passenger who rides
and plays no role in the operation of the car. Surgical tools
rather lend themselves to semi-autonomous capabilities
which keep the driver in command, but make his or her
driving easier, such as power steering and brakes.

A Proprietary Railroad
There are some obvious areas where Google-ness might
apply in the ORadvanced visualization systems for the
closed spaces of MIS, for example, video analytics in assessing anatomy, and machine learning to improve decisionmaking. Understandably, Verb officials are reluctant to go
into great detail about how such advanced feature sets
might work in surgery or to speak specifically about what
Google-izing surgery really means.
Despite the importance of Big Data and advanced analytics to Verbs vision, company officials insist the collection of

THE MEDTECH STRATEGIST

data doesnt necessarily imply Verb needs to have a large


installed base. Even granting compliance with HIPAA regulations, Huennekens says simply, There are lots of ways to
collect data, including ways not tied to Verbs platform.
Clearly, key to Verbs success lies in the combination of
skills and expertise inherent in J&J and Verily to create
something unparalleled in the industry and difficult to copy
by other companies. At the same time, the issues of integration, connectivity, and open systems raises questions for
Verb and its partners. While Verb hopes to capitalize on
Ethicons large footprint in surgical instruments and tools,
Ethicon hopes to leverage the appeal and installed base of
Verbs platform to strengthen its position in the OR and increase sales of its devices. Says Dave Herrmann about Ethicon, They have great market share and great relationships
with customers. But what if customers love the robot, but
love equally the instruments and tools they now buy from
a company other than Ethicon? Thats perfectly fine, says
Huennekens who adds that some high-end instrumentation will be proprietary, but that, as noted, Verbs platform
is being designed as an open system, able and willing to accommodate instruments developed by other companies. I
would say that under the right circumstances, we would allow [other companies] potentially to work on the system,
he adds.
It's only natural that there would be a greater sensitivity to working with large competitors like Medtronic/Covidien and even Intuitive, as Verb assesses future partners.
Though company executives expect Alphabet/Verilys participation will distance the company from the rest of the
field and result in a platform significantly different than
anything else on the market, Huennekens does acknowledge a competitive angle. Talking about the recent interest in robotics on the part of surgical giants like Ethicon
and Covidien, Huennekens says, Both J&J and Medtronic
recognized that Intuitive could over time continue to move
into their area [i.e., surgical instruments and tools] and disintermediate them from their customers; that they could
develop a proprietary railroad that they cant operate on.
The competitive threat and the convergence of technology
meant they had to act.
Volcano, he notes, developed IVUS and FFR (fractional
flow reserve) systems that let other companies operate on
our platform, but we werent going to let Boston Scientific
or St. Jude Medical do so. They had to develop their own
platforms. Smaller companies, the kind Verb is open to
working with, present a different kind of competitive issue,
since they face what Huennekens calls a chicken-and-egg
problem: how to build an installed robotic base without
the ancillary devices that enable the surgery. J&Jand Covidien by extensionexpect to use their extensive reach into
the OR to position their robotic systems. They can go into

2016 Innovation In Medtech, LLC. All rights reserved.

SURGICAL ROBOTICS
accounts where they already have relationships and offer
economic solutions to implement their robotic platforms,
he says, leveraging off of their instrument and broader J&J
businesses. Intuitive, he notes, doesnt have that capabilityat least not yet.
And though Verb executives are already thinking of the
competitive landscape ahead, they say that in the first few
years, most of the companys revenues will come from market expansion, increasing current robotic procedure penetration from the current 5% or so to something closer to
50%, rather than taking market share from Intuitive or displacing its installed base. Comparing the anticipated Verb
platform to current robotic technologies, Huennekens says,
Its like moving from mainframes to PCs, from land-based
rotary phones to mobile phones. The current robots are
useful and have done some incredible things. But there are
limitations to the current technology. Will we be able to do
prostatectomies? Yes. But well do so much more.

KOL or No KOL?
Of course, Verb executives expect that Intuitive will step
up its game as wellthe companys recent growth spurt
indicates an expansion of indications beyond prostatectomies. But Huennekens argues that Verband by extension,
Covidienwont have the burden of an established leader
like Intuitive as it faces obsoleting its current successful system. Every company that is a leader and has a legacy faces
the same challenge, he says. As Patton said, you dont
want to pay for the same dirt twice. New entrants dont
face that.
Given his time at Ethicon, Dave Herrmann has spent the
better part of the last decade talking with surgeons about
surgical instruments and technology. I think were now
seeing a groundswell of support [behind the notion of nextgeneration robotics], he says. Intuitive has made surgeons
aware of what technology can do to complement their skills
and help them achieve certain goals and accomplish certain
tasks in the OR, he goes on. Even if they arent necessarily
using da Vinci for all of their cases or arent even adopters
of robots at all, at least they see the potential. In turn, as
surgeons find out more about what Verb is doing, he says,
Theres a lot of appetite for them to partner with us to create Surgery 4.0.
And, in fact, Verb officials note that they had over 100
surgeon visits to either SRI, Ethicon or Verily over the past
two years, before the official launch of Verb, to get an early insight into what the company is doing. The feedback
has been extremely positive, says Huennekens. Central to
bringing surgeons on board has been the participation of
Ethicon, which seems to have leveraged its footprint in the
OR in these early discussions and will be critical to the eventual launch of Verbs platform. Theres so much interest in

19

what were doing and in partnering with us, says Dave Herrmann. And obviously Ethicons done most of the legwork
in developing those relationships.
Verb found that many surgeons cited key attributes such
as precision and control, visualization, and the ability to
dissect in tight places, as imperative in robotic systems
attributes all currently available on just about every system.
Well have those and more, says Scott Huennekens. At the
same time, those surgeons cited other capabilities they'd
like to have, like mobility, expanded reach, multi-quadrant
surgery, greater flexibility in the use or application of the
systemi.e., the ability of the hospital to optimize the use
of the system once theyve made the investment in itand
advanced instrumentation such as harmonics, clip appliers,
and staplers.
Dave Herrmann notes that Verb is developing a set of
clinical priorities and assembling a roster of KOLs to advise company officials as they go forward. More, implicit
in the companys vision of Surgery 4.0 is a new kind of role
for surgeons in improving surgical techniques. Given the
data analytics and advanced learning available on Verbs
platform, using the companys robot will almost be like
having the collective knowledge of top leaders in the field
as part of the tools available to [surgeons] in the OR, says
Scott Huennekens, who believes that Verbs platform will
enhance the ability of highly skilled, high-volume surgeons, but will especially benefit those who do relatively
few procedures a year.
The role of KOLs in Verbs development, however, raises
another question about the marriage of medtech and high
tech. Some digital health investors note that a critical difference between conventional medtech development and digital tech development is that for many digital technologies,
conventional KOLs working at academic medical centers
arent the best people to turn to for insight and guidance in
launching new products. Those academic centers tend to be
conservative and highly sophisticated in their take on new
technology; better, say digital investors, to start in smaller,
community hospitals where pedigrees are less impressive
but doctors are often more open to new ideas.
And thats not just true of digital technology. Recalling the
early days of MIS, Scott Huennekens says that there was a
lot of resistance to the new surgical techniques from KOLs.
It was people like [surgeon] Eddie Joe Reddicks and others
that really pushed for the adoption of minimally-invasive
surgery, he says. Thats why, Huennekens insists, for all
of the advanced technology at its disposal, Verb is developing its platform based on the feedback it is getting from
surgeons, not on the ability to build sophisticated features
into the system. This isnt coming from us, he says. This
is about making their vision a reality.

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20

SURGICAL ROBOTICS

Disrupting the Market


Dave Herrmann says Verb tries to have a good mix of surgeons, including those from both community hospitals and
academic centers. The company also tries to make sure it
recruits a range of surgeons that include robotic enthusiasts, robotic rejecters, and those he calls, nave, surgeons
who arent currently robot users but havent finally made
up their minds. Not surprisingly, he says, most robot users and nave surgeons tend to be positive about the story
Verb is telling them; but even robot rejecters, he says, are
sometimes receptive. If theyve rejected robots in the past,
its often because theyve had a bad experience with one.
They told us that there had been some limitation, he says.
The robot didnt allow them to do what they wanted, but if
there were a robot that did, theyd use it.
As noted, Verbs short term goal is to have its first platform ready for commercialization within four years. But
Verbs aim isnt just to introduce a new robot; its to disrupt
the surgical robotics market, says Scott Huennekens, with
a more surgeon-centric platform with greater dexterity, as
well as a modular system that is also more cost effective,
which will open up the global opportunity. To the end, he
says, we want to be about both technology disruption and
business model disruption.
Verb officials note that despite Intuitives huge success
and large installed basewith over 2,000 units in US hospitalsda Vincis reach into the global surgery market
falls short. Theyre in a majority of large US hospitals, but
theyre in a minority of actual ORs, says Dave Herrmann.
Huennekens hearkens back to the story of IVUS. Every hospital owns one [i.e. an IVUS machine], but it often
just sits in the hall. It only gets used in a limited number
of procedures. Thats where we are with surgical robots.
Robots are used in large numbers in some procedures, such
as prostatectomies, where the penetration rate is well over
50%, he goes on. In any other procedure, its much lower.
Verb officials concede that Intuitive is leading the way to
the next phase of adoption in robotics. The company posted
strong growth last yeararound 15%and, says Huennekens, theyre making progress in other areas [beyond prostatectomy], such as gynecology, colorectal and hernia.
Thats why Verbs positioningand its value propositionhas to be about more than just a better robot. The
economics of Verbs platform are critical: gone are the days
when hospitals eagerly embraced robotics and were willing to pay $2 million for a system that was as much about
marketing clout as better surgical techniques. Huennekens
envisions a technology that is less expensive to buy and use
and more widely adopted due to things like data and imaging integration, reduced OR footprints, and a lower price.

THE MEDTECH STRATEGIST

But its more than that. Huennekens notes that Volcanos


business model was, similarly, about building an installed
base around an expensive piece of capital equipment. We
were able to take different approaches for different kinds
of customers in different geographies, he says. In robotics, he goes on, we think there are different approaches
when you have a partner like J&J with a multibillion-dollar
instrument business.
Verily, for its part, brings the ability to develop software
for the system to connect and manage instruments and
instrument costs that are used in the procedure and that
connectivity, in turn, ties to supply chain management and
standardization protocols, as with any manufacturing process, he says. Huennekens notes that over time, Volcano
developed the ability to tell hospitals how productive they
were using FFR equipment and how productive each FFR
station was. We were able to help them become as automated and run as lean as possible, he goes on. ORs, too,
show significant variability: some surgeons do a procedure
in 36 steps, others may do the same procedure in 17, 30
or 42, he says, illustratively. How do we get to some level
of standardization? How can we improve quality and improve documentation of that? Huennekens asks. Leveraging Alphabets Big Data and machine learning expertise is a
big part of it. Building elements of that into [the system]
changes the value proposition and doesnt cost a lot to deliver, he says.

Democratizing Surgery
Huennekens focus on business model disruption, rather than just technological disruption, is about more than
changing the model for robotic and surgical equipment
companies. Its also about changing the healthcare system
overall. Verbs platform will bring down the cost of surgery, he says, and, in the process, democratize it, making
it available across the globe, not just in first-world places
that can afford [expensive systems].
Verbs openness to working with other companies, noted
earlier, is also part of its business model disruption. Other
systems are closed platforms, says Huennekens. Were
open to partnering with other companies and having the
platform be as versatile as possible. Were willing to have
discussions around using other companies tools, which can
change the cost-effectiveness equation as well.
Even as they seek to lower the cost of surgery and bring
a greater cost-effectiveness to new parts of the globe, Verb
executives understand the scope of their effort. Creating
a new surgical solutions platform will, says Huennekens,
wind up costing a quarter of a billion dollars by the time
we get to commercialization, an effort that will require the
deep pockets of corporate giants like J&J and Alphabet. Although Fred Molls Auris Surgical Robotics was funded by

2016 Innovation In Medtech, LLC. All rights reserved.

SURGICAL ROBOTICS
PE investors, few venture investors would likely fund such
a project. Moreover, he argues, companies like J&J and Covidien have to make those kinds of investments to protect
and grow their businesses. Ten years from now, Huennekens says, I think well see three successful companies in
this surgical solutions space: Verb, Covidien, and Intuitive.
But could the competitive landscape be even broader?
Verb executives believe that the current $2 billion robotics market could eventually be five, perhaps even ten times
that size. In just eight key surgical procedures they predict
that, given the current low penetration rates, just addressing unmet clinical needs has the potential to expand robotic
procedures within several years of Verbs launch, more than
doubling the market by 2025. Late last year, Toyota announced that it was committing $1 billion to open a robotics center in Silicon Valley, with broad industrial and commercial applications that will include healthcare. Are Apple
and Microsoft looking into this as well? Im sure they are,
Huennekens goes on. Anytime you get into markets that
are $10-20 billion in size, it attracts the attention of companies like Apple and Samsung and Alphabet.
Huennekens notes that there are five basic risks that any
start-up faces: financing risk, development or technical risk,
clinical risk, regulatory risk, and market risk. When I left
Volcano, I promised myself Id never do another start-up
because I didnt want to deal with the different risks, he
says. But Verb, he argues, is immune in a lot of ways from
each of those risks. With deep-pocketed partners like J&J
and Alphabet, Verb appears to have little risk of running out
of money. As for technical and development risk, Huennekens notes that were adapting [robotic] technology that
already exists. There is a time element, he acknowledges,
but the development risk is mitigated as much as we could
have hoped.
In a similar vein, regulatory risk is lower because robotic
systems are 510(k) devicestheyre tools in the hands of
surgeons, rather than enablers of completely new procedures. And theres little clinical or market risk because, as
Huennekens says, We know surgery works, were just trying to develop ways to do it better.

A Culture Clash?
As the robotic race heats up, so does the cost to play.
As the stakes get higher, are Verbs partners committed to
what could be an expensive project? Michael Del Prado
stops short of an explicit commitment, but he does say, I
think the partnership is very strong.
Intriguing as that partnership between medtech giant J&J
and tech giant Alphabet is on paper, and as compelling as
the technology vision, could obstacles arise precisely because of the different backgrounds and cultures of each

21

partner? Two decades ago, many medtech companies, particularly those developing coronary stents, enthusiastically
embraced the notion of drug/device convergence, which
held the promise to greatly enhance the clinical value of
medical devices.

Verbs platform will bring down


the cost of surgery, says Huennekens,
and, in the process, democratize it,
making it available across the globe,
not just in first-world places that can
afford expensive systems.

But industry executives quickly found enormous cultural


differences between pharma and medtech. Medtech is
built on short product life cycles and quick development
times, achievable with relatively small development dollars, and pharmaceuticals are expensive to develop and
highly risky to bring forth, but thrive on long patent lives
once a drug is approved. Its not much of stretch to say that
beyond drug-eluting stents, theres not much to show for
that early enthusiasm around drug/device convergence.
Then too, beyond different product development cycles,
the philosophies of the IT and MedTech worlds with respect to how to introduce products to the market are
different. Medical device companies are very customerdriven and have historically taken their lead in product
development from their customers, with many months, if
not years of prototyping and proof-of-concept before they
actually introduce the product (granted a role for regulatory agencies as well). Consumer-driven tech companies
tend to lead with technology they think their customers
want and then modify and iterate based on feedback from
the market place.
Couldnt one make a similar argument about culture
clashes between medtech, a highly regulated industry that
requires enormous clinical validation before product approval, and high tech, with rapid development cycles that
make medtech look snail-like and product development
that is about constant user feedback in real time?
Scott Huennekens notes that there are multiple elements to our Digitally-Enabled Surgery 4.0 solution, including hardware associated with the robot itself and its
components; disposable and reusable surgical instrumentation; the visualization system and its components; and
advanced software. And the product life cycles for each
vary in length, from seven years on hardware one year on

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MAY 13, 2016

22

SURGICAL ROBOTICS
software upgrades and new instruments. In medtech, you
have markets like large, non-invasive imaging with longer
development cycles, and other markets, like catheter and
instruments with faster innovation cycles that are often incremental in nature, he goes on. Well have both.

There could easily be a culture clash


between medtech, a highly regulated
industry that requires enormous
clinical validation before product
approval, and high tech, with rapid
development cycles that make
medtech look snail-like.
Huennekens sees no culture clash in a joint venture that
includes a medical device partner and a high tech partner.
We are benefiting from Alphabets and Verilys development process and cycles for software and J&Js expertise
in advanced instrumentation and medtech. In fact, establishing Verb as a separate, independent company was,
early on, intended to mitigate any potential clash. Both
Google and J&J recognized the need for an independent
company with strong leadership, and start-up incentives
and its own culture, he goes on. Both parties have
strongly supported this. As Verbs CEO, Huennekens says
hes been aware of his role and responsibility in forming
an independent culture while at the same time, trying to
incorporate all of the best elements of our partners to create value for clinicians and patients first of all and for Verily and J&J as a by-product.

Creating Its Own Culture


Huennekens admits to having been a bit concerned
about this when he first contemplated joining Verb. He
spoke with senior executives at both J&J and Verily, and
both assured me that if there were ever any issues, I had the
ability to pick up the phone and they would address them
immediately. A year into the project, he says, the only time
hes picked up the phone was to say everything is going
great and to thank them for their support.
For their part, neither of Verbs partners seem particularly concerned about the different time lines inherent in
medtech and high tech product development and different
customer feedback models. Vikram Bajaj, Verilys CSO, notes
that such differences in perspective and approach are things

THE MEDTECH STRATEGIST

Verily encounters not just with its partners, but internally as well, as the company brings together teams
of people with diverse areas of expertise. Alphabet/
Verily works hard, he says, to create a culture that
spans and imports the best elements of all of the
product development paradigms, whether rooted
in high tech, medtech, or biopharmaceuticals.
Bajaj notes that within Verily, there are projects,
such as those in nanotechnology, that are still at
the basic discovery stage and ten years away from
any application. At the same time, there are also
projects that are closer to a typical medical device
development timeline, and others still that, as Bajaj
puts it, operate on a software development scale.
One of the things that Verily does well, he goes on
is to reconcile all of these different world views,
which in turn, he believes, gives Verily an advantage
that no other tech company has in approaching
the industry in an integrated manner. One of the
things that our partners enjoy most about working
with us is that we have reconciled these perspectives and dont consider them to be at odds, he
says. (For more on Verily, see the sidebar, Verily:
Googling Surgical Robotics.)
Ethicons Michael Del Prado, too, believes that
concerns about culture clashes and/or simply different approaches to the project are misplaced. I
think all of the parties are very unified around the
vision of democratizing surgery and making sure
that our technologies are brought to bear to deliver a transformative solutionand I think its very
complementary, he says. Weve been in the [medical] device space for so long, the culture around delivering in a regulated device environment is very
strong. Google has always been very inventive, very
creative. But importantly as well, Verb is creating its
own culture; its very aspirational and yet also very
collaborative and very focused on executing against
a clear plan. I think its working very well.
Twenty years ago, at the dawn of the MIS revolution and fresh out of Harvard Business School, Scott
Huennekens found himself working for a small surgical device company in Orange County, CA, Birtcher
Medical Systems, teaching surgeons how to do a
then-novel procedure: the laparoscopic cholecystectomy. Its very interesting coming back to surgery 20 years later, seeing the advances that have
been made, he says. It really isnt all that different. If Verb has its way, Huennekens wont be able
to say that much longer.

2016 Innovation In Medtech, LLC. All rights reserved.

SURGICAL ROBOTICS

23

Verily: Googling Surgical Robotics


Its tempting to think that while
surgical robotics is a natural move for
Ethicon, for Alphabet, its somewhat
off point, an outlier for the tech giant
whose forays into a wide range of industries have transformed lives across
the globe. But as Verilys CSO Vikram
Bajaj notes, a play in surgical robotics
actually fits nicely within the life science projects that Alphabet, through
its Verily unit, has undertaken. We
have internal programs that are developing new tools to peer into biology and reveal things within [the human body], he says. The collaboration
around a new robotics program flowed
naturally from that: As Verily started
to explore the applications of its programs, it found itself working more
and more on what Bajaj calls anatomical, functional, and molecular imaging
tools in surgery. In the future, Bajaj
continues, everything from surgical
planning to decision-making to surgical
training will be aided by recent revolutions in advanced biomedical imaging [and by] data analysis and machine
learning.
More to the point, these tools in
data analysis and machine learning
represent an important next step in
robotics, as Verily sees it. Bajaj notes
that current robotic systems have
made surgeons much more dexterous, but they havent really helped
with decision-making in the OR in
ways that might lead to improved
patient outcomes. Wed really like
to improve patient outcomes as the
next step, he says. And we thought
that through our alliance with J&J, we
could do that in Verb by maximizing
the surgeons contextual awareness
during the procedure, with technology that both leverages knowledge
about the procedure and also augments the [surgeons] judgment with

advanced anatomical, functional,


and molecular imaging.

A High-Tech
Healthcare Company
In defining Verilys mission this
way, Bajaj implicitly rejects the notion that Verilys role in the joint venture is limited to bringing high-tech
capabilities to the partnership and
more explicitly rejects as well the
characterization of Verily as simply a
high tech company. We are a healthcare company, a very unique healthcare company, he says. We have
brought together people from many
different disciplines, ranging from
biology to electrical engineering to
quantum optics to software engineering and even to more traditional
clinical disciplines. Moreover, Verily
has created an environment where
all of these different disciplines work
together to solve problems in healthcare. And we take a very long perspective, says Bajaj.
In that context, Verilys contribution
to the J&J collaboration represents
what Bajaj calls the fusion of several
disciplines, including advanced optics
to foster a detailed understanding of
the operating environment, as well as
tools to resolve anatomical function
in greater detail, including biological
and molecular motifs. He goes on,
We combine all of that with a tremendous capability in information and image analysis. And in so doing, we really hope to give the surgeon a kind of
situational awareness that hes never
had before.
Surveying the current offering
in surgical robotics, Alphabet executives are rumored to have commented that what they saw passing

for robots werent real robots. Bajaj


wouldnt commenthes not an expert in industrial robotics, he says.
But he does see in the development
of Verbs platform a clear evolution beyond surgical robotics today.
Over the last decade, advances in
surgical robotics have transformed
them from tools that merely improve

We are a healthcare
company, a very
unique healthcare
company, Bajaj says.
We have brought
together people
from many different
disciplines, ranging
from biology to
electrical engineering
to quantum optics to
software engineering
and even to more
traditional clinical
disciplines.
the dexterity of the surgeon to systems in which advanced imaging is
increasingly a necessary component
of the procedure, he says. The next
step is to bring situational awareness and intelligence to the surgical
robot. Doing so means developing
visualization tools and decision-making systems to process a lot of imaging information and present it to the
surgeon at the best possible moment
during the procedure, Bajaj goes on.
Thats the evolution we see.

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Contact Kristy Kennedy at 480.985.9512 k.kennedy@medtechinno.com

MAY 13, 2016

24

SURGICAL ROBOTICS

How evolutionaryor revolutionarywould such a platform be? From


a broader perspective, technology,
generally speaking, and Alphabet more
specifically have significantly changed
the way we do things in everyday life.
Theyve introduced new concepts such
as search engines that were unheard
of two decades ago. Surgeons are notoriously slow to adopt new tools and
new ways of doing thingswitness robotics own early failures in orthopedic
and cardiovascular surgerypreferring traditional, more tactile ways of
performing surgery. Will the platform
Verb envisions require major changes
in the way surgeons experience the
surgical procedure, perhaps fostering
some resistance along the way? Bajaj
notes that one of Verbs goals is to
address the issue of surgical training
in order to really understand how surgical skill is learned and modeled. As
Verbs learning progresses, the tools
and techniques that will define Verbs
platform, he goes on, far from being
a problem, will, we think, improve uptake and make it easier for surgeons to
learn these procedures.
Verily has lined up its own network
of KOLs, independent of those consulted by Ethicon, and early feedback
has been extremely encouraging, according to Bajaj. Those KOLs view this
collaboration as bringing new hope
to a field which seems crowded, but
which is dominated by players who
have very similar solutions, says Bajaj. Were doing something different,
something our collaborators and our
advisors think is really fundamentally
going to transform the field.
Its not clear whether Verily considered other potential partners as it pursued its early work in imaging tools,
but Bajaj says Ethicon made for a natural choice because of the companys
history and footprint in the OR and
because Verily has had close relationships with J&J for some time, formed
while working together on other projects. The union of our technology

THE MEDTECH STRATEGIST

and J&Js technology in this field was


very logical, he says. The arrangement came together very quickly.
But with two of the most widely recognized brands in the world in J&J and
Google, why create a new company
with a new name? Bajaj says that all
involved in the joint venture recognize
the advantages of the parent brands,
and argues that Verb imports those
advantages. At the same time, he adds,
we did want this to be an independent
entity that really combines the very best
elements that each company can offer. I
think where we have landed combines
all of those things in a positive way,
while preserving flexibility for the company to act independently in what is a
specialized and competitive space.

A Hybrid Stronger than


each Parent
That notion of surgical robotics as
a specialized and competitive space
goes a long way in explaining why Verily chose to partner as it developed new
imaging tools. Ethicons broad reach
and leadership, combined with its deep
understanding of the OR, will help steer
the development of the advanced tools
that lie within Verilys area of expertise.
Some industry observers argue that one
reason why tech giants like Alphabet
and Samsung have turned to industry
partnership is precisely because they
lack the clinical expertise to inform their
technology plays.
But couldnt Verily, as part of Google
with its vast resources, simply hire an
army of physicians and other clinicians
to build an in-house clinical understanding and capability? In fact, Bajaj notes, the notion that Verily lacks
clinical expertise is wrong. We actually do haveand its very unique at
Verilyhundreds of scientists, wet lab
scientists, and a growing clinical team
in-house, and we do run clinical trials,
he says. We do work of increasing sophistication alone or with partners. It
is a core feature of our culture.

But clinical expertise by itself isnt


a reason to go it alone, Bajaj goes on.
If we can realize an outcome for patients that is far better and faster with
a partner, then we want to pursue
that outcome through partnerships.
I think we have been very strategic
and diligent in pursuing our current
partnerships. Such partnerships,
which include collaborations with eye
care companies like Alcon (a division
of Novartis AG) and pharmaceutical
companies such as Sanofi SA and Biogen Inc., among others, as well as with
other J&J operating companies, combine our culture and capabilities with
those of our partners, he goes on.
But its not as though were lacking
in the scientific and clinical nuance.
Its in fact one of the core things that
differentiates us from other tech companies that have made an entry into
the healthcare space. Weve invested
in scientific and clinical rigor from the
very start.
As tech heavyweights like Alphabet plunge deeper and deeper into
healthcare and, more importantly,
as the technologies they bring play
an ever greater role in re-shaping
how care is delivered, some industry
observers see an important shift in the
delivery of care and a re-configuration
of the medtech landscape, away from
the primacy of medtech giants like J&J
and Medtronic toward an industry
led by companies like Alphabet. Bajaj
believes that there is a transformation coming to the medtech industry.
But, he adds, were very humble
about our role in it and measured in
the impact Verily will have. Thats in
large part why Alphabet likes to join
forces with others. We want to partner with companies like J&J to really
effect a transformation that combines
the best each company has to offer,
he says. Thats central to our business model right nowand it will
catalyze the transformation that we
see coming.
David Cassak

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