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What: Shares of MAKO Surgical (NAS: MAKO) are pushing new all-time highs today, with shares up as much as 15% on news that the company is introducing a new surgical procedure.
So what: The company announced the introduction of MAKOplasty Total Hip Arthroplasty, a total hip-replacement procedure that uses the company's RIO Robotic Arm Interactive Orthopedic System. The new procedure, which the FDA approved in February 2010, is designed to reduce potential complications associated with conventional hip-replacement surgery by supporting the surgeon's ability to more accurately align and position the implants relative to the patient's specific needs. The company quotes a recent study that cites that only 50% of implants were positioned properly throughout roughly 1,800 hip replacements.
Now what: The RIO systems were previously used only for partial knee surgery, so the new procedure will leverage the company's existing installed base to broaden its horizons and revenue streams. I've been so bullish on the company that I recently added it to my personal portfolio. This is great news all around for shareholders. It adds another potential recurring revenue stream that installed RIO systems can generate on top of the existing MAKOplasty partial knee procedure, and it simultaneously adds another reason for potential customers to purchase the system. It's no surprise that the company foresees recurring revenue to continue to constitute a growing percentage of sales, so don't be surprised when this stock continues to march higher.
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At the time thisarticle was published Fool contributorEvan Niuowns shares of MAKO Surgical, but he holds no other position in any company mentioned. Check out hisholdings and a short bio.Motley Fool newsletter serviceshave recommended buying shares of MAKO Surgical. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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