The CEO of Mazor Robotics, Ori Hadomi, is under investigation by the Israel Securities Authority on allegations of insider trading related to a distribution deal with Medtronic.
News of the investigation was first reported by CTech, which said the investigation stems from a deal in May that gave Medtronic control of the U.S. distribution of Mazor’s robotic guidance systems for brain and spinal surgery. In September, that deal was expanded to include global control of distribution for Medtronic, which pegged its overall investment in Mazor at about $74 million.
The deal for distribution rights to the Mazor X Surgical Assurance Platform, which is FDA-cleared and recently received a CE mark for European use, has lifted Mazor’s Nasdaq shares by 130% since the start of the year.
However, in May agents with the securities authority raided the Caesarea, Israel offices of Mazor and questioned executives following a tip that the deal with Medtronic had been leaked to close associates of the company before it was made public, and they snapped up the company’s stock. Mazor told investors of the investigation the following month.
CTech now reports that Hadomi is among the executives under investigation for insider trading, and documents show his home was raided and his mobile phone confiscated. A spokesman for the company declined to comment on the breadth of the investigation, CTech reported.
While Medtronic has kept details of its robotic surgery program close to the vest, the device giant has previously said it expects to launch a surgical robot by the end of 2018 and that its robot will generate “material revenue” in 2019.