Medical robotics company MAKO Surgical (MAKO) was up about 30% yesterday after reporting Q2 revenues that exceeded analysts consensus ($18.6M vs. expectations of $16.1M), and in spite of negative EPS of -$0.24 (-$0.18 excluding stock compensation).
An interesting comment was included in MAKO's Q2 press release:
"We are pleased with our strong operating results in the second quarter of 2011 and our team's consistent execution of our plan," said Maurice R. Ferre, M.D., President and Chief Executive Officer of MAKO. "Further, we believe that the expansion of our intellectual property portfolio through the allowance of one of our MAKOplasty patents and securing the exclusive rights to the Immersion (IMMR) patent portfolio provide MAKO with the opportunity to achieve a unique and valuable market position in the field of robotically assisted orthopedic surgery."
A closer look at MAKO's 10-Q filing reveals that the new patent issued is about haptics:
Recently, we received notification from the U.S. Patent and Trademark Office of the allowance of our MAKOplasty patent application, entitled “Haptic Guidance System and Method,” which claims what we believe are fundamental elements of any viable robotic solution for orthopedic surgery.
The fact that the company describes the patent as essential to any viable robotic solution in orthopedic surgery suggests that the acquisition by MAKO of Immersion's patent portfolio on an exclusive basis is seen, by management, as a way to position the company for potential leadership in the sector.
Additionally, we expanded the scope of our existing worldwide license to the entire patent portfolio of Immersion Corporation to provide MAKO with exclusive rights in the field of robotic orthopedics.
The decision of granting exclusive rights, although limited to a specific sector, to a single company may be seen as a change to Immersion's policy on licensing.
Immersion did not make any reference to this specific event during its latest conference call, leaving us wondering if this decision can somehow be considered also the result of the recent inclusion of two new board members, Carl Schlachte and John Fichthorn, to Immersion's board of directors.
While further details are not available, the move might also mean an increase in royalties paid to Immersion by MAKO , or an additional one off payment to the company for granting exclusivity – one way or the other, a sign that Immersion is exploring new ways to monetize its patent portfolio and increase its results in a segment that now represents about 5% of total revenues, and has seen several new licensees announced in the last 12 months.
Disclosure: I am long IMMR.