Bill Gates-backed Vicarious Surgical, which is set to go public in a SPAC deal, hopes to reach $1 billion in revenue by 2027 as it takes on the Goliath of surgical robots.
As a kid, Adam Sachs, cofounder and CEO of Vicarious Surgical, watched the 1966 science-fiction movie Fantastic Voyage and was enamored of the premise of microscopic surgeons who performed surgery inside a scientist’s brain. “Humans are the wrong size to operate on humans,” he says. “We’re not going to shrink humans down, but we can create avatars of them. We can create little miniature robotic versions.”
That’s just what he and his Vicarious Surgical cofounders—Sammy Khalifa, the company’s chief technology officer, and Dr. Barry Greene, its chief medical officer—have spent the past decade doing. They have developed an itty-bitty robot paired with a VR headset for abdominal surgeries that they hope to bring to market in 2023. Its two arms and camera are designed to enter the patient’s belly through an incision of less than an inch and operate in all directions once there. Shrinking a surgical robot down is exceptionally difficult, but by doing so the Vicarious trio hopes to help doctors perform abdominal surgeries, starting with hernia operations, faster, safer and with fewer complications than existing alternatives.
It’s not exactly the sci-fi stuff of the movie, in which doctors are injected into the patient’s bloodstream, but it’s futuristic enough that Vicarious has attracted A-list investors including Bill Gates, Vinod Khosla, Eric Schmidt and Jerry Yang. It has also received a breakthrough designation from the FDA—the first for a surgical robot—making it eligible for priority review.
“Putting the elbow down inside the body cavity and being able to reach back and work toward the abdominal wall is a pretty big deal,” says Paul Hermes, who ran Medtronic’s robotics program and is now an advisor to Vicarious. “We should expect robotic surgery to get better.”
The company is set to go public via a merger with a SPAC set up by Hong Kong investor Donald Tang. The $1.1 billion deal will raise $115 million and bring in medical-technology giant Becton Dickinson, which makes the surgical mesh used in hernia repairs, as an investor. It forecasts reaching $1 billion in annual revenue by 2027.
“We’re going after the markets where existing surgical robots have struggled,” says Sachs, 30. “There are a lot of copycats out there aiming at the incumbent. They have the same challenges. . . . Our architecture is just totally different.”
The behemoth in robotic surgery is $115 billion (market cap) Intuitive Surgical, which introduced the da Vinci, a large four-armed robot that holds sticklike instruments, two decades ago and has dominated the space ever since. As Intuitive’s patents expire and robotic technology advances, competitors including J&J and Medtronic, both of which have acquired surgical-robot startups, are vying to make robotic surgery as common as laparoscopy. The Vicarious robot’s expected price of around $1.2 million, roughly half that of existing topline robots, could be a factor in its favor, as could the ease with which surgeons can learn how to use it.
Sachs’ own education with machine design began in his suburban Boston home. His father, Ely Sachs, is an MIT professor of mechanical engineering who is considered the elder statesman of 3D printing; his mother is an architect. He met Khalifa, 31, during his freshman year at MIT, where both studied engineering. They became fast friends and spent their spare time in the school’s machine shop making actuators, the mechanical components that power a robot’s joints. “We’d test them, we’d find out they didn’t work and we’d do that over and over again,” Sachs says.
While Sachs and Khalifa were still in college, they started working with Greene, a bariatric surgeon and friend of Sachs’ family, on a medical device that became the robot. In 2014, after a brief stint at Apple, Sachs officially launched Vicarious with $400,000 in seed funding led by Michael Rothenberg (the VC later charged with fraud by the Department of Justice in an unrelated case). In 2015, Khalifa quit his job to join.
The hardest part over the years, Sachs says, was figuring out the actuators. Making them small enough to include nine of them, three times what’s typical for surgical robots, was tough. So too was decoupling them so each joint could move separately, helped by 28 sensors per arm.
Carnegie Mellon robotics professor Howie Choset compares the technical challenge to jamming too much stuff into a piece of luggage, then trying to get that stuff to do something. Worse, he says, the smaller the actuators, the weaker they get. “You want to get as much actuation in as small a package as possible, but you’re already struggling to get as much packed as possible,” he says. “It is amazing that [Sachs] made this work.”
Hernia repair, the first market Vicarious is targeting, is a huge one, with more than 2 million procedures a year in the U.S. Ventral hernias, common along the midline of the abdominal wall, account for 500,000 procedures and are highly complex. Standard repair involves attaching mesh to the abdominal wall, but it results in recurrence about 20% of the time, often requiring a more extensive fix. An advanced technique that involves tucking the mesh up against the rectus abdominis muscle reduces recurrence, but it’s difficult and can take up to four hours with current robots.
When Vicarious received the FDA breakthrough designation, it could perform this surgery in a cadaver in about half the time, Sachs says, and it has since cut that to under one hour. In a video demonstration of a ventral hernia repair, the Vicarious robot’s arms push mesh into the abdominal cavity and then quickly sew it up. The shorter surgery is less risky for patients and more cost-effective for hospitals.
Vicarious’ ambitions extend to other abdominal surgeries, including gallbladder procedures, for a total potential market of 39 million surgeries (only 3% of these are done with robots). That’s why Sachs, whose stake in Vicarious is worth $112 million, figures it needs just a fraction of the market to create a large company.
“The field has been pretty stagnant for a long time, and there is accepted wisdom that isn’t true,” says Tang, the SPAC investor. “You need to get this in the hands of people to show that it’s possible and it’s not a pipe dream.”
By Amy Feldman with Aayushi Pratap