Spine

MAKO Entangled in Lawsuits

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A number of class action lawsuits were filed against MAKO Surgical Corporation (MAKO – Snapshot Report) recently on behalf of investors who purchased its shares between January 9 and May 7, this year. The lawsuits claim, among other things, that MAKO misled the investors by not disclosing the detrimental sales and utilization rates for its Robotic Arm Interactive Orthopedic (RIO) Systems and MAKOplasty applications during the aforementioned period.

As per the lawsuits, the defendant failed to reveal the actual facts and misguided the claimants with the 2012 revenue outlook provided during that period. According to the lawsuits, the outlook lacked an analytical perspective and the company did not have any reasonable basis to support it.

The lawsuits were filed in the United States District Court for the Southern Disctrict of Florida. As per the lawsuits, the company and some of its executives violated the federal law. The complainants seek to recover the financial losses on behalf of the class members in violation of Exchange Act.  The legal entities seek to recover the damages on behalf of the investors.

The company’s growth strategy focuses on increasing sales of RIO Systems and MAKOplasty applications. In the light of higher costs and declining sales of its RIO System and MAKOplasty applications and no recent business developments, the imminent lawsuits are bound to act as a headwind. However, considering the orthopedic market overview, there is growth opportunity driven by demographic trends and unsaturated domestic market.

MAKO develops and manufactures advanced robotic arm systems and MAKOplasty applications. It competes with Arthocare Corp(ARTC – Snapshot Report), Given Imaging (GIVN – Snapshot Report) and IMRIS Inc (IMRS – Snapshot Report).

MAKO currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.

About the author

Josh Sandberg

Josh Sandberg has been an executive search consultant focused exclusively on orthopedic and spine start-ups since 2004. He has had a tremendous impact in helping his clients avoid costly hiring mistakes by his deep industry knowledge and network. In 2010, Josh co-founded Ortho Spine Companies, which is the parent company of Ortho Spine Distributors (OSD), Surg.io and Ortho Sales Partners (OSP). OSD a searchable database that helps ease the frustration of finding orthopedic distributors throughout the country. Surg.io is the ultimate distributor toolkit that offers distributors the tools necessary to build the foundation of a scalable and highly functioning sales organization. OSP is an end-to-end solution that helps companies approach the Global Market in a cost efficient way. Our team has hundreds of years of experience and can help you navigate the many challenges present in bringing new technologies to the market.

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