Today: Google strikes deal with Johnson & Johnson to make robots that can assist surgeons, launching a new challenge to Sunnyvale’s Intuitive Surgical. Also: Intel, Altera soar after reports of merger.
The Lead: Google to make surgical robots in deal with J&J
Google’s newest push into health care technology involves surgical robots, a partnership with a pharmaceutical giant and competition with one of Silicon Valley’s largest medical-device companies.
Google and a Johnson & Johnson unit announced Friday that they will be working together to make robots that can assist in surgeries, a strategic collaboration with no price tag announced. The aim of the project appears to be similar to the da Vinci robots manufactured and sold by Sunnyvale’s Intuitive Surgical, the third largest public Silicon Valley company in the biotech/health care sector.
Google stressed that the life sciences team at Google X will only be providing software and sensors for the proposed systems, with J&J’s Ethicon unit handling the rest of work. The Mountain View company’s robotics arm — Google acquired robotics firm Boston Dynamics in late 2013 — will not be involved.
“We think we can use some of our machine vision and image analysis software to help surgeons see better as they operate (e.g. to highlight blood vessels) or make it easier for them to see information that’s relevant to the surgery at just the right time,” a Google spokeswoman said in an email exchange.
The life sciences team at Google’s experimental X division has announced several other ventures in its pipeline, including a contact lens that can monitor glucose levels, a spoon that can help those with tremors from Parkinson’s and similar diseases eat without spilling, and pills that can search inside a body for cancer and potentially other maladies. Google has also spun off a biotechnology company called Calico that signed a deal with pharmaceutical giant AbbVie to develop drugs for Alzheimer’s and age-related illnesses.
In this latest endeavor, Google runs head-on into Intuitive Surgical, the 35th-largest Silicon Valley tech company in terms of revenues. The Sunnyvale company has had a fast rise in terms of revenues and market valuation, but hit some serious speed bumps along the way, indicating the tricky nature of this business.
While its original da Vinci robot sold briskly at nearly $2 million apiece for a couple of years, Intuitive Surgical soon hit a wall amid a Food and Drug Administration investigation and a series of lawsuits questioning the safety of operations performed with the devices. However, Intuitive Surgical last year had a new robot approved by the FDA, which has helped its prospects since the previous device seemed to have reached a point where few hospitals that did not have it were prepared to purchase one.
A company spokeswoman said Friday that the effort by Google and Ethicon was a validation of Intuitive Surgical’s work.
“This announcement is just the latest confirmation that computer-assisted surgery continues to grow to the point that others can no longer sit on the sidelines,” she said in an emailed statement, later adding, “Computer-assisted surgery will continue to flourish around the globe and competitors have been expected.”
Intuitive Surgical — which has traded for less than $350 in the past year after nearing $600 a share at its 2012 peak — closed Friday with a 0.4 percent decline at $497.25. Google fell 1.1 percent to $557.55 after disclosing Thursday afternoon an initial pay package of more than $70 million for incoming Chief Financial Officer Ruth Porat.
SV150 market report: Altera soars after reports of Intel deal
Wall Street managed its first gains of the week Friday as reports of Intel’s interest in San Jose’s Altera sent both Silicon Valley chip companies’ stocks roaring higher.
The Wall Street Journal and Bloomberg News reported Friday, based on anonymous sources, that Intel was in talks to acquire San Jose chipmaker Altera, in what would be the biggest acquisition in Intel history. The move would merge the world’s largest chipmaker with the 11th-largest chip company in Silicon Valley, according to revenues, and likely cost Intel a good bit more than Altera’s $10.4 billion market valuation, which soared higher after news broke late in Friday’s trading session. The move would broaden Santa Clara-based Intel’s product portfolio away from personal computers and gadgets, however, as Altera focuses more on chips used in servers, cars and large equipment. “It makes sense that they would potentially be looking for other opportunities to grow the other part of the business,” Sanford C. Bernstein Stacy Rasgon told Bloomberg about Intel. “There are synergies, say, in Intel’s data center business.” The reports arrive amid a lot of consolidation among chip companies, including the recent merger of Cypress Semiconductors and Spansion and the announced $11.8 billion acquisition of Freescale Semiconductor by NXP. Intel shares jumped 6.4 percent to $32, while Altera stock soared 28.4 percent to $44.39 thanks to a late bump after the Journal first reported the talks.
Apple CEO Tim Cook and Yelp CEO Jeremy Stoppelman joined Salesforce CEO Marc Benioff in openly opposing an Indiana law they say could allow discrimination against homosexuals, with Salesforce and Yelp proclaiming they will seek to limit the business they do in states that pass such laws. Salesforce gained 0.9 percent to $66.55 on the day, Yelp added 3.2 percent to $47.16, and Apple fell 0.8 percent to $123.25. Yahoo gained 1.4 percent to $45.10 after announcing a $2 billion stock repurchase plan, and Facebook increased 0.4 percent to $83.30 after signing on with the WWE for video of this weekend’s WrestleMania event in Santa Clara. Tesla Motors dropped 2.8 percent to $185 after Bloomberg News reported that registrations in China are falling while the Palo Alto company looks to Japan for Gigafactory partners. SanDisk continued to struggle after monumental losses on Thursday after chopping its revenue forecast, falling another 2.4 percent to $64.59.
Up: Intel, EA, Yelp, Pandora, AMD, Nvidia, Applied Materials, Zynga, Yahoo, Workday
Down: Tesla, SanDisk, HP, NetApp, GoPro, Google, Netflix, Oracle, Apple
The SV150 index of Silicon Valley’s largest tech companies: Up 6.08, or 0.35 percent, to 1,726.24
The tech-heavy Nasdaq composite index: Up 27.86, or 0.57 percent, to 4,891.22
The blue chip Dow Jones industrial average: Up 34.43, or 0.19 percent, to 17,712.66
And the widely watched Standard & Poor’s 500 index: Up 4.87, or 0.24 percent, to 2,061.02
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