Shares in Mazor Robotics Ltd (Nasdaq: MZOR), which develops guidance systems for spinal and brain surgery, fell sharply, by 7.8% in trading on the Tel Aviv Stock Exchange. This comes as reports have surfaced that the CEO, Ori Hadomi has been question by ISA, the Israeli Securities Authority. Company computers were seized in May of 2017.
Mazor Robotics reported the incident and ongoing investigation in June, stating that senior executives in the company had been questioned, but that the suspicions had not been explained to the company, and no indictments had been submitted in the case. The company’s market capitalisation is now NIS 5.1 Billion.
Hadomi is a founder of Mazor Robotics and is regarded as the driving force behind the company. Considering his integral role, it is highly likely that the image of the company will be severely negatively affected, should legal proceedings be launched against him.
This comes after a period of prosperity for the company, with strategic co-operation between Mazor Robotics and Medtronic, realising a 400% increase in share price over a period of 18 months.
The agreement between Mazor and Medtronic, the rise in the company’s share price and the revenue have made Mazor one of Israel’s most successful medical devices companies in history.
The on-going investigation reportedly involves insider trading relating to the first stage of the Mazor-Medtronic deal. The Medtronic agreements were signed in two stages; in the first stage, Medtronic began distributing Mazor Robotics’ MazorX product, and several months ago, Medtronic signed an exclusive distribution agreement for the product.
Robotics News, December 3