On Nov. 16, Medtronic completed its acquisition of Lyon, France-based Medicrea International for in excess of an estimated $160 million based on shares outstanding.
The deal’s closure has direct implications for Memphis, where Medtronic’s spinal business unit has long been based.
A key to the deal is Medicrea’s product focus in artificial intelligence (AI), machine learning, and predictive analytics, which joins well with Medtronic’s spinal surgery arm.
Medicrea’s operations will now be run out of Memphis under the locally headquartered Medtronic Spinal and Cranial Technologies business unit. Currently, about 1,000 employees work for Medtronic in Memphis. Medicrea has about 175 employees, primarily in France.
Memphis Business Journal spoke with Jacob Paul, a SVP at Medtronic and president of Medtronic Spinal and Cranial Technologies, on Nov. 24, about the impact of the Medicrea acquisition on his business unit and on the prospect for growth in Memphis. The interview was edited for length and clarity.
MBJ: How does this Medicrea acquisition and its technology fit with the existing spinal business here in Memphis?
Jacob Paul: In the past, we were an implant company. We sold implants and instruments. Then, we evolved and sold the entire suite of enabling technologies along with the implant that goes into a spine procedure. Now, we're looking at a broader, entire ecosystem of care from pre-op patient diagnosis to surgical execution to post-op.
I think data is going to be the new currency and help us reduce variability in spine surgery and improve outcomes. And ultimately, [it will] improve quality of life for patients with back pain and spine disease. So, this is truly something that will differentiate us in the market.
With trends toward personalized medicine, does Medicrea’s AI technology fit well with those trends? As far as making sure each part of a procedure is specific to the patient?
There was a lot of subjectivity in how [some spine surgeries] were done and what this does is it integrates into [surgeons'] hospital EMR systems. It helps the surgeon develop plans that not only optimizes the [targeted area], but also looks at what it is going to do to the levels above and levels below where the surgeon can operate.
The technology is used to develop a plan that the surgeon can share with the patient and pick the best option. Then, we send a personalized implant that is designed and manufactured just for that patient.
With the combined spinal and cranial business unit, is there innovation that can happen in the future that might not otherwise have happened without this acquisition?
This [AI technology] already was a part of our vision because we felt like this is the future of spine. We started to invest in technology and build it internally. But then, we found Medicrea and we've been watching them for awhile. We found their technology was really exciting.
They’d built this big data set of 6,000 patients and had a powerful algorithm that continues to get better over time with more and more patients. We felt like this would give us a huge leg up in AI-driven planning and predictive analytics. This [acquisition] gives us a foundation for building this entire platform and gets us way ahead of anybody else in the spine industry.
Describe what might happen here in Memphis because of this acquisition and folding it into the spinal business. Are there any positions you might add because of the deal?
The data and AI piece have a network effect that over time becomes stronger and stronger as we bring more patients through this [Medicrea AI technology]. This will help accelerate our growth. It will make us far more competitive across markets around the world. So, it'll help strengthen the spine business, which bodes well for the Memphis campus. …
We were [already] investing in accelerating our R&D programs. To that end, we've hired some R&D engineers and some of the other cross-functional resources that go into new product introduction. And, as we accelerate our momentum and our growth, we will hire people across [Medtronic] sites, including Memphis.
