Luna Sells Shape-Sensing Technology to Intuitive Surgical
Luna Innovations Incorporated, which develops and manufactures new-generation products for the telecommunications, aerospace, automotive, energy and defense markets, today announced the sale of its shape-sensing technology for medical applications to Intuitive Surgical, Inc.
The terms of the deal include Luna receiving $12 million upfront in two tranches 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 formerly utilized in Luna’s medical shape-sensing business.
The sale will enable Luna to focus on the growth potential of its fiber-optic sensing business while significantly strengthening the company’s balance sheet. The sale contains provisions that maintain Luna’s ability to service 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 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.”
“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.” With the sale, Luna will focus on growing its fiber optic sensing technology, which improves manufacturing and testing of composite and non-composite materials, structures and systems. “With strain and temperature sensing now as our key focus, we’re prepared to develop technological solutions for this growing market with our proven technology,” Chung said. ”We also will continue to sell our test and measurement products to the telecommunications industry and develop a pipeline of technologies through contract research.”
Mr. Chung and Dale Messick, Luna’s Chief Financial Officer will host a conference call with investors on Thursday, January 23, 2014 at 9:00 a.m. (EST) to discuss the transaction. The conference call will be available via live webcast on the Luna website at www.lunainc.com under the tab “Investor Relations”. To participate by telephone, the domestic dial-in number is 800.706.7745 and the international dial-in number is 617.614.3472. The participant access code is 14875088. Investors are advised to dial in at least five minutes prior to the call to register. The webcast will be archived on the company’s website under “Webcasts and Presentations” for 30 days following the conference call.