Luna Innovations Sells Shape-Sensing Tech to Intuitive Surgical

Roanoke, Va.-based Luna Innovations Inc. has sold its shape-sensing technology for medical applications to Intuitive Surgical Inc.
The terms of the deal include Luna receiving $12 million up-front in two payments and up to an additional $18 million upon certain technical milestones and commercial measures. Intuitive will acquire Luna’s fiber optic shape-sensing and localization technology, including related patents, and hire a number of engineering employees from Luna’s medical shape-sensing business.

Intuitive Surgical, widely recognized for its da Vinci surgical system, is based in Sunnyvale, Calif. The da Vinci system uses robotic arms, cameras and a remote-control console to help doctors perform surgery with tiny incisions. It is used in gynecological procedures, heart surgeries, prostatectomies and urology procedures, among other operations.

“We look forward to working with Luna on a smooth transition,” said David Larkin, Intuitive’s vice president of engineering. “We are excited about the team joining Intuitive and the possibilities around this technology.” 

The sale will enable Luna to focus on the growth potential of its fiber-optic sensing business for other industries while significantly strengthening the company’s balance sheet. The sale contains provisions that maintain Luna’s ability to serve its existing agreements and for the continued use and exploration of opportunities outside the medical industry.

“Luna develops technological solutions to problems that others cannot solve, and this is yet another successful example of how our technology ultimately reaches the market, in this case with a long-time development partner,” said Luna’s President and CEO My Chung. “This sale is the culmination of the shape-sensing development we’ve done over the past several years for potentially integrating into Intuitive’s future products. One of the many benefits of this agreement is the ability to monetize much of the value of our innovations immediately—rather than waiting for longer-term revenues from development and potential supply agreements —while enabling us to streamline our focus on the growth opportunities that we believe exist for our strain/temperature sensing business, especially within the automotive and aerospace markets.”

Luna Innovations focuses on the aerospace, automotive, telecommunications, energy and defense markets.

Intuitive Surgical has had a rocky time lately. News of a U.S. Food and Drug Administration (FDA) investigation into injuries and deaths possibly due to robotic technology and a subsequent FDA warning letter have hurt the company’s once-stellar reputation.
Moreover, the high cost of the unique technology could be problematic in an increasingly cost-conscious hospital environment.

The da Vinci system robots, found in more than 1,300 U.S. hospitals, cost $1.5 million each and were used in 367,000 U.S. procedures in 2012. They are the company’s primary product and have been the subject of negligence lawsuits alleging that patients were injured during surgeries. (Editor’s note: For more on Intuitive Surgical and robotic surgery, see Datawatch on page 36.)