New Idea of the Day....MAKO

MAKO Surgical (MAKO) designs and makes robotic systems (similar general idea as ISRG) that can avoid total knee replacements by use of a procedure called MAKOplasty. MAKOplasty is an alternative that resurfaces the damaged portions of the knee. MAKO sells the robotic system, called the Robotic Arm Interactive Orthopedic System, and then sells consumables which must be replaced for every procedure. Recovery times for MAKOplasty patients are drastically reduced over total knee replacement, leading to lower healthcare and rehabilitation costs, and improved quality of life.

About 581,000 knee replacements are performed each year in the US. Although there are no hard numbers for the percentage of these that would benefit from MAKOplasty, that does provide some scale to the potential market. The company has not yet had a profitable quarter, but revenues keep increasing at a high rate (up 80% and 81% in the past two quarters) and procedures performed are also increasing quickly (up 88% in the first half of 2011 to over 2,800).

MAKO fell down to $21 during the latest market selloff, but then has come storming back after releasing its earnings on August 9.  The stock rose 2.57 to a new closing high of 34.99 yesterday.  Here is the weekly chart: