MAKO Surgical Corp. Announces Up to $60 Million in Private Placement Financing

FT. LAUDERDALE, Fla. — MAKO Surgical Corp., a medical device company focused on marketing its Tactile Guidance System (TGS), an advanced robotic-arm solution, and its implants for minimally invasive orthopedic knee procedures, announced that it has entered into a definitive agreement for an equity financing of up to $60 million, with initial gross proceeds of $40 million and conditional access to an additional $20 million. The $40 million tranche is scheduled to close on Oct. 31, subject to the satisfaction of certain customary closing conditions.

The financing, led by Montreux Equity Partners and Skyline Ventures, included Alta Partners and certain existing MAKO shareholders as investors. At MAKO's option, the investment firms will provide an additional $20 million in equity financing before Dec. 31, 2009, subject to the company's satisfaction of certain business-related milestones and approval of the additional funding by the company's stockholders.
 
Funding from the financing will be used to support the anticipated commercialization of version 2.0 of the TGS and its MAKO-branded, bi-compartmental implant and disposable products, for continuing research and development of MAKO's future products and for the continuing expansion of operations and working capital to support growth.

"MAKO is pleased that we have secured access to capital that we believe is adequate to allow for the execution of our business plan," said Maurice R. Ferre, MD, president, CEO and chairman of MAKO. "The proceeds of this financing, along with participation by investors with proven success with medical device companies, will put us in a stronger position to advance the wider adoption of MAKOplasty."
 
In connection with the financing, MAKO will issue and sell to the participating investors over 6.45 million shares of its common stock at a purchase price of $6.20 per share and will also issue warrants to acquire additional shares of common stock. The investors will receive warrants to purchase 1.29 million shares of common stock at an exercise price of $7.44 per share. The investors who have agreed to provide the additional $20 million investment will also receive warrants to purchase an additional 322,581 shares of common stock at an exercise price of $6.20 per share.

Also in connection with the financing, John J. Savarese, MD, and John G. Freund, MD, will be elected to serve on the board of directors effective on the date of the closing.

Savarese is a managing director at Montreux Equity Partners. His clinical training in orthopedic and general surgery was gained at The Hospital for Special Surgery and Cornell University Medical Center. Savarese has worked in the Life Sciences divisions at Credit Suisse First Boston and Merrill Lynch and held management positions at NeurogesX. He received an MD from Duke University Medical School and MBA from Stanford University.

Freund has been a managing director of Skyline Ventures since 1997. Earlier in his career he held various positions at Acuson Corp., a medical device company, including executive vice president. He was the co-founder of the Healthcare Group in the Corporate Finance Department of Morgan Stanley & Co., Inc., and was the original healthcare partner at Morgan Stanley Venture Partners. In 1995, Freund co-founded Intuitive Surgical, Inc., a medical device company, and served on Intuitive's board of directors until March 2000. He also serves on the board of directors of Hansen Medical, Inc., XenoPort Inc., MAP Pharmaceuticals, Inc., the New Economy Fund and the SmallCap World Fund, as well as a number of private companies. He received an MD from Harvard Medical School in 1980 and an MBA from Harvard Business School in 1982, where he was a Baker Scholar.
 
Source: MAKO Surgical Corp.