Thank you very much. Good afternoon again. Good morning to those of you calling in from the United States. Welcome to Smith & Nephew Investor Event, Focused on Innovation. Here today with me on the call and speaking from a range of locations around the world are Skip Kiil, our President of Orthopaedics, Brad Cannon, our President of Sports Medicine and ENT, and Vasant Padmanabhan, President of R&D. I'm very excited to be with you all today, albeit virtually, but I do hope that you're all well and safe. As you may recall, we have planned a technology event at AAOS earlier this year. Unfortunately, AAOS had to be canceled, but we have certainly used the time to further advance our technology and R&D efforts, and I'm very excited to present our progress to you today. Shifting to the agenda slide, can I start with a focus on innovation introduction?
As you know, innovation is a broad topic. We have exciting projects across the whole of our portfolio. We're focusing today on the particular area of Enabling Technology and digital surgery. We're in the early stages of some really important and strategically connected launches. You'll hear from Skip about the Real Intelligence ecosystem. Then Vasant will take you through the detail of our next-generation robotics platform called CORI and Real Intelligence hip navigation software. Brad and Vasant will talk about our advances in sports medicine, Enabling Technology, and in particular about the INTELLIO Connected Tower. Of course, we look forward to your questions. First, I'll talk about the strategic context. I'm sure this slide is familiar to you by now. This is the strategy we've embarked on in 2019 with a primary goal of sustainably accelerating Smith & Nephew's underlying growth.
The early results have been very encouraging. We delivered on a broad-based acceleration across the businesses as we went through 2019. All regions, actually, and all franchises contributed, and that included clear progress in some of the subsegments that had headwinds in the recent past. So the task, as we came into 2020, was to build on that, and in February, we announced specific priorities for the year. One of those priorities, and moving to the next slide, was a renewed commitment to innovation. I think you heard me on this along with the entire management team. We want to accelerate the cadence of launches across our franchises in the medium term, and that, of course, needs continued investments in R&D. You saw in our first half results that we chose to protect R&D spending even as the COVID outbreak impacted industry revenue.
Also, our work on accessing external innovation through M&A has continued. The Tusker Medical acquisition in January is a further example of bringing a commercial stage asset into the portfolio and rolling it into our existing commercial teams, in this case, into our ENT business. The route to value creation from this style of tuck-in deals is well established, and the CE marks granted for REGENETEN and NOVOSTITCH PRO this year are important milestones from two other recent examples. We've also been acquiring a digital technology, adding JOURNEY to the Atracsys and Brainlab transactions in 2019. Here, the concept is actually quite different to a more traditional style of a deal. The technology we've acquired has provided components to other key regulatory clearances this year, with the Atracsys camera built into CORI and the Real Intelligence hip navigation software, an early deliverable from the Brainlab partnership.
Importantly, though, these products are also part of a developing ecosystem of fully integrated digital assets, positioning Smith & Nephew to address key trends in our target markets, so we're effectively moving from a product company to a delivery of integrated healthcare solutions company, and you will see we are very well positioned to do so with our combined strengths in orthopedics and in sports medicine. This is, of course, supported by market trends, and we'll talk more about those market trends of decentralization of care and specialization of interventions and delivery. On the next slide, you see some of these trends in a bit more detail. One, of course, is of a greater share of procedures that take place in outpatient settings around the world, including ASCs, of course.
In the U.S., we're seeing further expansion of reimbursement, with Medicare now proposing to cover total hip replacement in ASCs from 2021, and parts of the U.S. and other healthcare systems' responses to COVID have been to actually further accelerate the shift of procedures. New products will actually need to be suited to a wider range of clinical settings than in the past. A second trend is around outcomes. Healthcare payers are increasingly using outcomes data to inform decision-making. Digital technology offers new ways to collect data, both during and after procedures, with potential to improve processes and help reimbursement. A further trend is an increased focus on cost. Healthcare systems already face the challenge of demand growing faster than society's ability to pay. The specific financial pressures of the COVID pandemic will only add to that challenge.
Solutions that can demonstrate improved efficiency, cost-effectiveness, and even reduce costs for providers will become more and more compelling, and fourth, advancing technology and connectivity and data analytics make it possible to engage more closely with patients, all the way from pre-operative preparation to outcomes measurement. We see a growing provider interest in the whole episode of care for a patient, and being at the forefront of this development means going beyond just providing devices. Now, the new generation of Enabling Technologies that we're presenting today is built to address those trends, and importantly, it is in a way that is fully scalable. The aim is to provide tools that are essential for every surgeon in every operating room. Robotics, we believe, is still at an early stage of adoption in our markets.
We think only around 2% to 3% of joint replacement procedures globally are currently performed with a robot. In other areas, though, and other suppliers have shown that robotic technology is valuable and it will be used, and we have a great opportunity today to get our systems in place as adoption in orthopedics also accelerates. The arthroscopic tower actually is an example of what a scalable solution can look like, and today you'll find a tower anywhere that sports medicine procedures are being performed. Smith & Nephew is uniquely positioned for the next generation, and it is actually the only company that can combine the tower with navigation and with robotics.
Our expert specialists will take you through the details of our new launches in a moment, and you'll see across the products the simplicity, the ease of use, and the small footprint that we believe are positioning us to win. We'll begin with Real Intelligence, which is our digital surgery platform that brings all of this together, and for that, I'll hand over to Skip Kiil. Skip, please.
Thank you very much, Roland. Appreciate the opportunity here, and the team we're going to take you through kind of the subsegments of Real Intelligence until we're on the side with our vision, and really here at Smith & Nephew, we think and drive innovation in how we're reimagining surgery, and that's really what Real Intelligence is. It's a symphony of solutions for the future that is robotics, and Roland mentioned the opportunity with sports and just so much more in regards to what we're doing. The next slide here is we think about kind of Real Intelligence and our vision, a strategy in the digital surgical ecosystem. It's really the creation of the digital surgical ecosystem of a seamless solution throughout the continuum of care.
And if you see the chart on the right-hand side there, this graphic shows how we will connect the patient's journey in both pre-op, intra-op, and throughout post-operative care. And learning from each stage of this process really helps improve the overall patient care pathway and the information that is transformed throughout that cycle. And ultimately, we're going to be taking advantage of all the technologies that Smith & Nephew offers, such as VISIONAIRE, surgical navigation, our robotics platform that Vasant will take you through, and ARIA. And ARIA is really an opportunity for us to help our customers utilize that digital connectivity with patients and their referral network to break down traditional barriers, improve patient compliance, and mitigate readmission risk using very objective data. And so what are we building?
Really, this is a connected ecosystem of clinical solutions, and Real Intelligence supports post-acute cost reduction, clinical efficiency improvements, and value-based data set generation. The platform aims to help clinicians shorten the patient's post-acute recovery time, develop efficiencies that reduce costs, and generate key patient-reported outcome measurements or PROMs, and this satisfaction data is to better define value for both the patient and the site of care. The platform contains customizable patient engagement pathways and enables connected automated communication between the care navigator and the patient. We also have displays and dashboards through ARIA that provide visibility for the patient and provider to help reduce variability in those clinical outcomes.
And so I've shared this chart previously at AAOS event, and this is how we see the convergence of technology and data transmitting through the digital surgical ecosystem with CORI, which is really the core of Real Intelligence, as well as the integration of smart tools, the future generation of robotic arms, augmented reality, enhancing the intraoperative data flow for clinicians. In summary, we're very excited about the possibilities in the evolution of Real Intelligence and where this is going. And with that, I'll hand it over to Vasant to walk through the specifics of CORI. Thank you.
Thanks, Skip. It's great to be here today to discuss innovation with everybody. Before I get into the specifics of our next-generation surgical robotic system, CORI, I'd like to share with you highlights of just some of the clinical and economic evidence that we've collected with our robotic systems thus far. Let's start off with patient-reported outcomes. Several studies with our robotics platform have shown an improvement in PROMs, and in one comparative study, the Kennedy Institute study, that study showed that the post-op Knee Society Score was 97.2, approximately six points higher than the conventional arm, and you all know that even getting a single whole point- of- score increase is pretty significant to patient-reported outcomes. When you look at length of stay, the benefits are quite impressive. The Sherman study describes a significant reduction in length of stay from 74 hours to 45 hours using robotics.
Even more compelling is a study demonstrating that patients could be safely discharged within 24 hours with proper patient selection and education, which further supports the use of our robotics platform in ASC settings like Roland and Skip talked about. Returning to an active lifestyle, including sports, is very important to our patients, and the paper by Dr. Kennedy and others comparing robotic surgeries to conventional surgeries showed that the mean time to return to sport was reduced from 10 months to approximately 4 months, again, a significant improvement for our patients. Cost-effectiveness of robotics has also been described in a recent publication through an analysis of revisions avoided by using robotics. In this five-year economic model, it's estimated that high-volume centers can avoid costs of approximately $14,000 per patient over a five-year period, and finally, survivorship is a critical factor for success of robotic procedures as well.
The Berenberg data show that the revision rate for our robotic procedures using NAVIO is 99.2% at two years, which is yet another compelling story for outcomes. In summary, I believe that our clinical and economic evidence continues to grow, and it shows improved outcomes for patients, surgeons, and payers. Now on to CORI. Building on the success we have had globally with NAVIO, today we're delighted to speak to a recent launch of CORI. As Skip pointed out, this platform will serve as the core of our Real Intelligence digital surgery ecosystem. CORI is smarter. CORI is more efficient. CORI provides handheld robotics for precision milling, and it offers all of these benefits that I'm going to get into more detail in a significantly smaller footprint, lending itself to both operating rooms and outpatient surgery centers.
As Roland mentioned earlier, we received FDA 510(k) clearance earlier this year and have launched CORI in the U.S. and a few other countries globally. The next video will highlight the key features of CORI that we're very excited to bring into the hands of our customers. Can we play the video, please? As you saw in the video, with CORI, a surgeon can easily and efficiently use our handheld technology along with a small tablet to navigate through the entire procedure. And this is possible because we have made our software smarter. We have enhanced the processing capabilities of the system. And doing that allows us to offer a solution for knees and hips that doesn't require CT or X-rays. It allows us to offer real-time bone and soft tissue balancing before any cuts are made, and it allows us to real-time optimize a patient-specific plan.
Speaking to efficiency in partnership with Atracsys that Roland and Skip talked about, we've upgraded our camera for CORI, and our camera is five times faster than other cameras available in the market, and this capability, faster camera, when combined with our more powerful processing capabilities, allows us to have a fast, easy-to-use, intuitive workflow, which in turn leads to efficient procedures. While the improved workflow plays an important role in speed of surgery, the ability to prepare bone is equally important, and to support faster bone preparations, we have completely redesigned the handheld system from the ground up to work with the faster camera, allowing the surgeon to prepare bone almost 30% faster compared to NAVIO. In addition, as you can see, we have also significantly improved the ergonomics with a handle and rotatable trackers, as you've also seen in the video.
Taken together, the faster software, the faster camera, the completely redesigned handheld, these improvements allow for faster and more efficient procedures, which we believe will help the adoption of the technology. And finally, to talk about precision milling. In addition to improving the camera and in addition to improving the handpiece and the interfaces, we've redesigned what I call the business end of the handheld, the precision milling burrs. Our newer and faster burrs can precisely mill twice the volume of bone in the same time. In addition, we have three new burr geometry options: a 6-millimeter cylindrical burr, a 6-millimeter bullet burr, and a 5-millimeter cylindrical burr that cater uniquely to enhanced preparation for our portfolio of implants. And with precision milling, we get a much smoother surface finish as well. Now, I'd like to talk about the applications that are supported by CORI.
As shown on this page, we already have FDA clearance for the full range of primary knee replacement applications. This includes our LEGION, GENESIS II, ANTHEM, and JOURNEY II knees for both uni and total knee arthroscopic procedures. In addition, we're the only robotic system that supports a bicruciate retaining total knee with JOURNEY II XR. As you know, JOURNEY II XR preserves all the critical ligaments for all our patients. When you take a look at the market and the other systems that are out there, you can see we have taken a very different approach in bringing robotics and Enabling Technology into the hands of our customers. As Roland pointed out with respect to the trends, we recognize the value of being efficient and small in footprint as operating theaters all across the world look to optimize their surgical workflow.
We believe we have the most modular platform that can support modern-day ORs while enhancing the features that make clinical sense in this world of robotics and digital surgery. In summary, we are very excited to introduce the next generation of robotics for our customers. With this modular and small footprint system, we've started our Real Intelligence journey that Skip talked about of creating a digital surgery platform in this new age of surgery. Going beyond CORI, as you know, we acquired Brainlab's orthopedic joint reconstruction business in early 2019 with the goal to develop new technologies for digital surgery, and we are very happy to share that RI.HIP, our Brainlab HIP navigation software, is now available on the KICK platform in addition to the Brainlab RI.KNEE application that we launched recently.
As you know, the KICK platform is already in use in more than 500 hospitals globally. This is a good example of our early success with our Brainlab partnership. Looking to the future, there's more to come. We will bring the Brainlab KNEE and HIP applications on CORI over the next 12-18 months. We will continue to expand our indications on CORI to include revision knee arthroplasty in addition to uni knee and total knee, and thereby completing the knee portfolio. Beyond software indications, we're also developing surgical enablers and tools such as knee tensioners that can help our surgeons precisely balance patient joints throughout the range of motion. We're also developing robotic arm platforms for applications across our broad portfolio.
That completes our remarks today on the robotics technology, and I'll hand over to Brad to discuss Enabling Technologies in sports medicine, and I'll be back to cover our exciting innovation in sports medicine. Brad.
Thank you, Vasant. It's really exciting to see our approach to Enabling Technologies in orthopedics and how well it complements our overall approach in sports medicine. In fact, in 2019, our refocusing, both commercially and also through innovation, on our Enabling Technology business is what drove our acceleration throughout the year, including our double-digit growth in the fourth quarter of 2019. The reality is that AET is the base of our entire sports medicine business. At its foundation, sports medicine is about minimally invasive arthroscopic surgery to repair soft tissue injuries.
We use this pyramid to represent the framework we use to communicate our strategy for sports medicine globally across all functions and also to guide our portfolio decisions. It all begins with having a strong foundation of Arthroscopic Enabling Technologies. Over the last few years, we've made significant commitment to Enabling Technologies and enhance every single platform on our arthroscopic tower. The future for AET holds even greater promise as we introduce advanced connectivity, simplicity, and capabilities. Building on a strong foundation of AET, our focus in joint repair remains on developing comprehensive procedural solutions for knee, shoulder, hip, and also small joint procedures. We continue to pursue unmet needs and opportunities to redefine the standard of care with differentiated technologies and surgical techniques. You can see at the top of the pyramid is Biologics.
Globally, we are now extending the tip of our strategic pyramid with game-changing products like REGENETEN that can enhance the body's own ability to heal, restore function, and allow patients to truly live life unlimited. But as the pyramid reflects, our portfolio strategy is based on having a strong foundation in AET, which is why we've placed an emphasis on enhancing our arthroscopic tower. Now that we've returned to market-level performance, it's no time to take our foot off the gas. We're investing to extend the capabilities of our Enabling Technologies to meet evolving customer needs. Our customers, both in the OR and in carpeted areas, are looking to improve both outcomes and productivity. Enabling Technologies gives us the opportunity to address both traditional needs like enhanced intraoperative performance and emerging ones like cloud-based data management.
In 2019, we launched LENS 4K and extended the reach of the WEREWOLF COBLATION platform, and in 2020, we launched the INTELLIO Connected Tower. We have an aggressive cadence of additional tower enhancements, which Vasant and his team are planning, and which we'll cover in greater detail. This cadence of improvements is important to our overall current customer base and installed base, and also to expanding that as our market continues to expand. Overall, if you look globally, there's over 5,000 customers utilizing Smith & Nephew AET platforms in the top 10 critical markets. As we continue to innovate, innovation and compatible Enabling Technologies designed to complement our current tower design gives us a great opportunity to be the preferred supplier for leading customers, delivering a powerful clinical and economic story, both within and across our franchises.
So let me hand it off to Vasant, who's going to cover all the exciting technologies that his team is working on now.
Thanks, Brad. I'd like to start off by describing the different components of our SportsMed arthroscopic tower and review some of the recent launches with you. As you know, the tower includes four different systems or four different components that collectively support the surgeon's overall goal to reliably and efficiently treat soft tissue injuries arthroscopically. First, visualization. The visualization system is the window into the joint for the surgeon. Here, image quality and user experience are paramount. And that's why you've seen a regular cadence of innovation from Smith & Nephew in this space. A recent example is the launch of the LENS 4K surgical imaging system in 2019 that Brad alluded to.
This system delivers a premium image and enhanced user experience with the tablet application that accompanies the system, and feedback from the field has been outstanding with respect to image quality and usability. Next, mechanical resection. Often during an arthroscopic procedure, there is frayed or damaged tissue that must be removed, and our mechanical resection blades represent the cutting edge of technology in this space. Our recent launches of the PLATINUM line of blades deliver superior resection, debris evacuation, and sharpness related to our competitors. Coblation technology. Beyond blades for tissue removal, we also offer a proprietary coblation technology called WEREWOLF that Brad talked about. This is an incredible technology and has equally incredible clinical outcomes. In short, for those of you that love technology, coblation uses radiofrequency energy to generate a plasma field that dissociates molecular bonds within the targeted tissue.
Clinical studies have shown that patients recover faster with the use of coblation. Clinical results also have shown better long-term patient outcomes and that this technology is safe for use with all soft tissue types. In 2019, we launched, along with the WEREWOLF system, the COBLATION FLOW 90 wand, which represents an exciting step forward with this technology. The FLOW 90 wand has been designed to enable faster tissue removal with more safety features for all tissue types within the shoulder. The FLOW 90 wand follows the FLOW 50 wand that we had launched prior to that for all tissue types within the knee. Finally, there's fluid management. Fluid management is used to maintain the visual field of view for the surgeon and also help with debris evacuation. We'll come back to this platform and our planned innovation here when we talk about future plans.
Now on to INTELLIO Connected Tower, our most recent innovation that we launched just a few months ago. Let's play the video, though, first, to see how this innovation helps surgeons to be more efficient and connected. As you saw in the video, the INTELLIO Connected Tower solution enables improved operating room efficiency by ensuring that the different systems in the arthroscopic tower are wirelessly connected and also remotely controlled from outside the sterile field. Further, the solution has added an on-screen display functionality for the connected devices to support the surgeon workflow. The MY. INTELLIO Cloud is sports medicine's first cloud-based solution for our visualization platform. The cloud expands the functionality of the LENS 4K app that I talked about earlier with secure HIPAA-compliant storage of patient images and video captured during the cases. MY. INTELLIO Cloud will help with post-surgical workflows for surgeons by allowing easy.
For our visualization platform. The cloud expands the functionality of the LENS 4K app that I talked about earlier with secure HIPAA-compliant storage of patient images and video captured during the cases. MY. INTELLIO will help with post-surgical workflows for surgeons by allowing easy post-op data access as well as a digital platform for the surgeon to share content with their patients. Sports Medicine is embarking on the digital surgery journey as well and embracing the digital surgery ecosystem that Skip alluded to earlier and Brad alluded to earlier. Within this ecosystem, we'll be building additional capabilities to serve the surgeon in new ways with digitally enabled data-driven insights. Looking beyond 2020, we are very excited about our tower for the future. We see a world where the connected tower can enable both arthroscopic and orthopedic procedures.
We see a world where new innovations and tower capabilities in navigation, robotics, machine vision, artificial intelligence, as well as data-driven insights will yield more efficiency and procedure innovation. And finally, our cloud technology will help us own the episode of care for the patient through integration with the digital surgery ecosystem and our newly acquired assets that Skip talked about. With that, I'd like to hand over to Roland for a summary.
Thank you very much, Vasant. Very excited by what we've been able to show you today. As you can see, innovation and Enabling Technologies are key pillars of our growth strategy. And these new launches bring truly differentiated functionalities. They also bring solutions aligned with key healthcare trends. And of course, these platforms will and can be further developed. This is only actually one part of the picture. We're also working on other high-potential projects across the portfolio. And you'll hear more from us as we continue to evolve and develop. So with that, come to the end of the presentation. Thank you for your attention. And we look forward to your questions.
Okay. Ladies and gentlemen, we will now begin the question- and- answer session. And as a reminder, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. And our first question comes from the line of Veronika Dubajova from Goldman Sachs. Your line is now open.
Excellent. Thank you. And good afternoon. I will keep it to two questions if I can. One is I just want to kind of get a sense for any initial feedback that you're getting on the CORI launch. Yes, you've taken a very different direction from all your other peers in terms of robotics. And I think folks either love or hate the handheld piece. Obviously, with NAVIO, it's not had a great amount of traction. So Roland, maybe if you can share a little bit of feedback from customers so far and how they're thinking about CORI and whether it's likely to be a bit more successful than NAVIO and kind of maybe what some of your internal goals and expectations are for placements or market share would be helpful.
My second question is also about CORI and just a timeline for when you expect some of the non-Ortho applications or non-large joint applications to be available. Thank you.
Thank you, Veronika. Thanks for the questions. I will also hand over to Skip in a moment just from a high-level perspective. I think obviously you pointed out a major difference, which is handheld. This is a different approach that we've deliberately chosen. We've chosen that because we believe it can deliver better performance. I would actually say that we were quite successful with NAVIO. But remember, we came after others onto the market. There is a market to be developed on one end. I think it takes education and practice to use a handheld. But the feedback we've had so far has been just outstanding just because it gives this very haptic feeling to the physicians, to the surgeons. So I think it's been very successful. But again, we're at the very early stages. We were developed to put that in the hands of more physicians initially.
But we've had to deal with, like everybody else, with the COVID situation. But then again, I'm excited. I think this is a really differentiating technology. Skip, you want to talk a little bit in more detail around surgeon feedback and then maybe also some of the timelines as much as we disclose them?
Sure. Thank you, Roland. Veronika, appreciate the question, and I would give you kind of two points of reference. If you think about handheld robotics, yes, it's a very differentiated approach, but it's one that is creating an adoption curve and opportunity to really transition the traditional way of thinking around removing bone, right? When you think about the use of a blade or a saw versus precision milling, again, we feel confident that the level of competency there is moving in the right direction, and it is a change in workflow, and keep in mind that we don't have the requirement for a CT or an MRI. This is very translatable when you start thinking about the reduction in inventory and implants and as the site of care changes towards moving from the inpatient to the outpatient setting where there's limited space.
And when you think about kind of the comparators relative to the size, scope, and scale of those products, just in orders of magnitude, you think about the size of a CORI versus the competitive footprint products. Again, you're talking about four or five hundred kg versus nine kg. And so it's almost a half a ton of robotics equipment that are sitting in an OR versus ours that weighs about 25 lbs that can be moved from OR to OR. So when you start thinking about the adoption curve, I think that's pretty dramatic in regards to our ability to convert both current surgeons and competitive surgeons.
\The other piece of this that's really important is really the setup time. If you think about the setup time with our product, which is about five minutes versus the competitive products are anywhere from 20-45 minutes depending on what procedure they're doing. When you add all those things together, we feel like there's a pretty nice opportunity to create some disruption in the marketplace, and we're looking forward to competing for our call segments.
And the timeline for the non-large joint applications?
Yeah. Thank you, Veronika. Sorry, I'm having some feedback on the line here. So we are not going to disclose relative to the timelines. But again, we've shared a cadence of the new product software introductions that Vasant went through. And we'll kind of leave it at that. But we're very excited about where we think this disruption innovation is going to come from, particularly when we start thinking about the intersection of Orthopedics and Sports Medicine. So we're not going to get any specifics. But stay tuned.
If I can squeeze in a final one, I guess, Roland, just a big picture one. Maybe you can. I think we've all talked about robotics a lot over the past three, four years. Just curious kind of one, what your ambitions are in terms of where you'd like to get to, whether that's market share growth, installed space. And two, how do you think about robotics? Are we going to end up in a place where you give the robot away to locking your disposable consumable market share? Do you think you can generate revenues from robots, robot sales and placements, kind of how you're thinking about it from a financial perspective? That would be incredibly helpful. And I'll rejoin the queue after that. Thank you.
Yes. Thank you, Veronika. Certainly, I mean, we look at this as a truly Enabling Technology. We look at this as really innovative, and we're seeing a clear trend for robotic surgery. This has only been accelerated of late, but the trend is here to stay. We're talking about a very small number of surgical procedures that are done with robots at this stage. So there's two things here that I believe we will benefit from. One is the segment that will continue to grow and expand, and second, we believe that our technologies offer opportunities to capture market share. So our ambition remains the same. We want to grow above the market, and we believe that these technologies will help us do so.
In particular, also that we also start to observe some trends where physicians really look at how is actually a solution being delivered rather than what are the really implant features, so procedural aspects become more and more important, and I think that will only just accelerate when we talk about ASCs and the very different setting there. T hen in terms of the model, the sales model, I think we are very open. We are adapting to the market needs here. We see an opportunity to sell systems. We see an opportunity to also engage with all sorts of different models. We are ready to work with customers to see what their needs are.
We do this on the basis of two elements, of course. One, this is a proprietary technology that is differentiated, so there is certainly a great pull opportunity here. And the second one is, of course, built-in flexibility on the basis of low cogs for the system. As Skip mentioned, when you have a system that is roughly around 25 pounds, you can imagine that we've worked very hard on the cogs side of this. And that will give us flexibility as we move forward and as we drive adoption in the marketplace.
Okay. We will now take our second question. And it comes from the line of Michael Jungling from Morgan Stanley. Your line is now open.
Thank you, Operator . Good afternoon. I have two questions. Firstly, on your slide, page 16, you make reference to numerous studies showing outcomes and cost savings among other things. Are these studies specifically in relation to your own system? Or are these studies more broadly referencing robotics in orthopedics? And question number two is on the customer base. Could you comment in which segment you think CORI is likely to be the most successful for you? Will it be the hospital segment? Or will it be the ambulatory care segment? And if you could, perhaps an indication of how you see sales. Is it 40%/60%, 50%/50%? If you have some sort of indication, that would be helpful. Thank you.
Thank you, Vasant. Can you take the first one, and then Skip, maybe you can just go straight into the segments after that.
Yeah. I will. Thanks, Roland. It's a short answer. All the studies that I spoke about are from our robotic platforms across the world. And Skip, do you want to get the second one?
Sure. Michael, as you think about kind of that shift that's moving from, again, the inpatient to the outpatient, I think we mentioned it's around 3%-5% of total joint procedures being done in this environment in that kind of outpatient or inpatient with robotics. And if you think that that kind of three- to five-year trend increases dramatically, our hypothesis is that we're going to be able to respond to the shift in market and the competitive dynamics more appropriately given the size scale of our product. Again, going back to the reduction in inventory and implants, the limited space that is required.
Really, as you think about kind of that mix shift more towards the outpatient or ASC setting, the profit- versus- price equation is going to be pretty important. If you also consider the price points that we are at relative to our competition, again, about half the cost of the larger robotic systems in regards to what we're doing, we do have the opportunity to maintain flexibility in our commercial model and allow us to move as the market needs us to and really increase our overall commercial flexibility. We're very excited in regards to the idea of CORI and the robotic solution and really around the precision milling versus what you've seen with the blocks and blades in the marketplace today. Vasant obviously mentioned some of the clinical outcomes. Those obviously have financial implications as well. We'll let you draw your own conclusions there.
But again, we're very excited about the focus of technology and the approach in allowing us to have flexibility in those business solutions.
Great, and please follow up on my question too on the customer base for CORI. Would you expect to dominate the outpatient market? I mean, look at the size and the cost of your competitive systems. Would you expect to be sort of absolutely dominant in the outpatient market given the size and cost of your systems versus the others?
Mike, I love your aspiration of dominance. But I would tell you that I think all the large players are going to move towards the outpatient segment. We love our ability to compete not only at the level of implants and implant systems, but really as you start thinking about the summation of the Navigator robotics products and how you're bringing those disparate systems together to deliver reproducible results and drive clinical value proposition. Again, ultimately, as you think about the medium-term integration opportunities between procedural automation, we mentioned the interplay of sports medicine. We really believe we're one of the only companies, if not the only company, that can bring big bone orthopedics to soft tissue repair in regards to sports medicine. Imagine the ability to use that handheld robotics unit or a surgical arm to tunnel an ACL or something that's pretty straightforward.
I get pretty excited when we start thinking about the parlay of what orthopedics and sports medicine brings, particularly in the trend of the site of care that's moving towards that outpatient and ASC setting. Again, we feel very good about our value proposition, and again, the whole host of reasons why we're calling Real Intelligence the kickoff to the digital surgical ecosystem.
Great. Thank you.
Okay. Our next question comes from the line of Kyle Rose from Canaccord Genuity. Your line is now open.
Great. Thank you very much for taking the question. I hope you can hear me all right. I had a couple of questions here. First, sort of Vasant, on some of the actual usability features on CORI. Can you maybe help us understand how CORI compares to NAVIO, specifically around time of utilization? I mean, you talked about faster video and imaging processing. Sounds like better, larger burrs. How does CORI compare to NAVIO just on a skin-to-skin, fully up to the learning curve as far as a procedural time perspective?
And then secondarily, a lot of talk on Enabling Technologies, not a lot of talk on implants. Just wanted to understand, are there any plans for specific implant designs that are focused around CORI in particular? When I'm thinking there, I'm thinking the competitive products have really unlocked the cementless or the press-fit markets. Wanted to get updated plans there.
All right. I'll take the first one. And Skip or Roland, you could maybe take the second one. With respect to workflow, I think the first question between CORI and NAVIO. We've made improvements in three or four different areas of CORI compared to NAVIO, both in how we do the planning steps, the workflow for that, as well as beyond planning when we get into looking at gaps and assessing ligament balancing. We've made workflow improvements, and then on top of that, as I went through, the camera is also faster a nd that helps as well. We believe that CORI is about 30% faster compared to NAVIO in preparing bone.
And what we're in the process of doing is, as I think Skip pointed out earlier, the procedure itself has multiple phases, right? There's a setup phase and a planning phase and the workflow phase t hen the bone cutting phase. We're collecting data now as we start doing real cases. We'll talk about that down the road. CORI is a complete kind of redesign over NAVIO in different elements. When you put it all together, it's faster, significantly faster. Skip, do you want to take the second one?
Yeah. Sure. Thanks, Vasant. Maybe I'll just add a couple of points on the efficiencies of NAVIO and really what did we learn from that whole process. The reality is we've had hundreds and hundreds and hundreds, if not thousands and thousands of robotic implant cases done with NAVIO. And so improving the efficiency with CORI was an absolute. And really where speed matters in the OR, particularly given the post-COVID environment where the OR times are going to be ever more constrained, that setup time that I mentioned earlier relative to the competition, and then again over the setup time relative to NAVIO, and really the intraoperative data management and the reduction of, call it, landmark points, again, not having to use a CT, getting those landmarks set up. The reduction from NAVIO to CORI was 7 to 2.
You only needed to create seven anatomical landmarks with NAVIO. Now you only have two with CORI. Those are dramatic improvements to the real-time planning and really simplified user interface. We have reduced those intraoperative steps by 40%, which is a significant change and positive outcome of workflow. Your second question related to the range of implants. Really the key aspect here is with CORI, we have the largest range of implants in the robotic landscape, right? We have LEGION, GENESIS II. We have JOURNEY II. Again, we talked about the focus on revision on a go-forward basis. Obviously, we are working through the details of creating the opportunity to support our cementless knee program, which is still under development. But when that comes out, we are going to be integrating that into the overall CORI platform. Really where high precision is extremely important.
And again, the comparison between precision milling and the preparation of bone with cutting instruments compared to saw blades and skiving and bending, etc., etc. We feel very good about those clinical opportunities. Again, it's early days here. But we're thinking that we have, again, a pretty strategic competitive advantage going back to the earlier question of why precision milling versus kind of some of the traditional approaches. We were very strategic in our focus in regards to the design and development of CORI and the application of this technology as it both drives kind of, again, market share adoption here and market share conversion. So we feel very good about our implants on a go-forward basis.
Thank you, and then just one final question from me on Real Intelligence. Could you just help me understand that business model a little bit more? Is it more about offering a differentiated solution to be closer to the customer broadly? Or is there some sort of revenue component that comes with the integration or the rollout of these new technologies in the near term?
Yeah. Michael, it's a couple of things. It's really the culmination of the technology and a couple of acquisitions we made earlier in the year relative to JOURNEY and the development of kind of the investment in building an innovation in technology. And ultimately, it's an extension of our robotics. It's really the digital surgical ecosystem that we see in the hospital and outpatient care settings and really allows us to gain insights from data analytics and apply those to new product introductions and new product innovation. And really, it's more significant outcomes are going to come through that data management of the system. And ultimately, when you start adding that up with great products, the insights that you garner from providing expectations in regards to how we see that digital surgical ecosystem moving, it is going to be a revenue stream.
But imagine the point where you have awareness around an injury. You can help the surgeon. You can help the patient in the appointment scheduling, the education of the patient, the preoperative dynamic assessment, and the tools associated with that. We actually have the surgical intervention. And then there's a postoperative follow-up. And then there's some other things that we're working on that we're not going to get into today. But ultimately, it's driving improved outcomes, better patient selection, and ultimately reducing the cost of care. And when you add all those together, it's really a differentiated value proposition both for the customer with the clinical outcomes but for the surgeon and for Smith & Nephew.
Okay. Once again, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Okay. And our next question comes from the line of Julien Dormois from Exane. Your line is now open.
Hi. Good afternoon, gentlemen. Thanks for taking my questions. I have two, please. The first one is like a big-picture question on what you guys are doing in terms of initiatives to drive faster adoption of robotic surgery. Do you believe that in the next three to five years, this will be improved by spending more maybe on surgeon training? Or is it more about clinical trials to demonstrate the superiority of robotic surgery? Or anything else that you can do to basically accelerate that trend? And the second question is more specific to Europe. We know that Europe is a bit of a laggard in adopting robotic surgery. Could you just remind us why that is? And also, if there is anything on your side that you can do to change things in this region?
Yeah. Thank you, Julien. Thanks for the question. I'll get going, and then I'll ask Skip to just chime in. I think absolutely, we are going to continue to see the further adoption of robotic surgery. I mean, we mentioned it's low numbers today, but there is a very significant trend there that is only being accelerated and amplified. I think it has to do with a couple of things. First of all, technology has improved greatly. So robotic technology has advanced. Then there is certainly a host of data that is coming through. And we'll continue to invest, as you've heard, in clinical data and trials demonstrating the performance and the capabilities of our specific technology. We will also continue to invest in medical education. I think that's extremely important. As for every technology, there is a learning curve. And we want to do this together with our customers.
Finally, I would offer that, of course, there's an overall industry push towards robotics. So you see all the large competitors active in this field. I think this will further enhance adoption. Why is it less prominent in the EU or in Europe? That's a really interesting question. I can't give you a definite answer here. I think there's been probably a bit of a more reluctant environment here to adopt new trends in some areas. There's probably also a bit more conservatism around capital expenditure and buying into large solutions. I think this is about to change as we see some of the high volume but also high-tech sites that continue to adopt and are interested in robotics.
But it is a fact that some of the trends, indeed, starting in the U.S., have a slower adoption rate in Europe and sometimes actually have a faster adoption rate in some of the high-growth markets, even in Asia. But I think, again, we are very well positioned here. Just to remind you that we are, of course, already present in all these centers that do arthroscopic surgery through our SportsMed position and that we can support the trend to decentralized care or ASCs or similar through a small footprint. So I think that will also help the adoption rate. Skip, any other comments on the topic?
Yeah. Roland, I think you hit most of the key points. The only other kind of key commentary is I would say, as we did our limited market release with CORI, there was a large percentage of surgeries that were done outside of the United States in our international markets, in EMEA, in Asia-Pacific. And ultimately, as you think about kind of where we are today in that adoption curve, very early in that process and ultimately, the slowdown and the impact of the COVID pandemic has allowed us to speed up in some of the things that we talked about. Roland mentioned the medical education aspect. We trained between 15, 000 and 20,000 surgeons over a 90-day period in regards to our technology.
A large percentage of that was really introducing the approach relative to Real Intelligence and the digital surgical ecosystem and the application of those technologies around the world. So I would tell you that we have better global alignment than maybe we did three or four years ago in regards to our robotic solutions. Related to our new product design and development cycles, we are taking design inputs at a global scale. Vasant and his team are taking inputs from global KOLs and those networks around the world. This isn't just a U.S. phenomenon. Albeit it started in the U.S., we're seeing this permeate many of the markets around the world.
And so when you think about the footprint that Smith & Nephew has relative to our competition, again, almost a 50% in the U.S., 50% in the rest of the markets around the world, we like our approach. We think that we can accelerate global share gains. And again, as that site of care changes, we feel very confident and comfortable with our approach. And ultimately, when you start talking about the improvement of asset utilization, again, the number of trays versus kind of what we have with the traditional surgical approach is going to be very appropriate in regards to how we conclude that planning process. So we're, again, very excited around that engagement with global KOLs and implementation.
Maybe just as a quick follow-up, if I may, and thank you very much for the detailed answers. In terms of reimbursement, is there anything that is limiting the adoption of robotic surgery in the major European countries? Is there anything you have to fight against insurers? Or is it more just about the conservatism that you mentioned, that CapEx being a bit more constrained?
I think the CapEx environment is definitely a pacing factor. I think we've talked about the fact that our robotics platform is a CT-free robotic solution, and I would tell you that's a positive in regards to the economic challenges we see around the world when you can actually deliver a knee or a hip replacement without having to get a CT. That's a positive influencer relative to the price pressures that we know are going to be omnipresent moving forward and consistent globally.
Okay. That's very helpful. Thank you.
Go ahead, Julien.
No, no, no. I was just saying thank you. So if you have a follow-up, please tell me.
No. Just to add to this, we don't see any reimbursement downside in Europe. It's just that there are no specific codes either for the use of robotics. So it probably would have to fit into the overall envelope. But that is not different from other markets. And to Skip's points, I think it's really about demonstrating the value, the performance, the effectiveness of robotics. And then, as we said, the trend will continue to grow given, again, that we're starting from a very low base if we look at the total numbers of surgical procedures that are done with robots.
Yeah. Thank you very much, guys. Thank you.
Okay. Our next question comes from the line of Tom Jones from Berenberg. Your line is now open.
Oh, good afternoon, gentlemen. Thanks for taking my questions. I had two sort of bigger-picture questions, really, about robotic surgery. The first is regarding the economic aspects of it. I mean, you pointed out quite rightly, I think, that there's a significant cost-effectiveness economic argument for the use of robotic surgery and total joint replacement. And I don't expect you to answer this question specifically. But broadly speaking, how much of that economics or improved economics do you think will accrue to healthcare systems more broadly, i.e., the payers? How much do you think will accrue to the hospitals? And how much do you think can accrue to your shareholders? That will be my first question. And I've got a sort of follow-up one on the back of that.
That's a tough one you're asking here, Tom.
But a relevant one, I think. Because, I mean, if all the benefit just accrues to the hospitals and the payers, then you've kind of put a lot of effort into nothing, to be honest.
I think first, I mean, if I look at it from our perspective for Smith & Nephew and for our shareholders, of course, we're doing this with the absolute firm intent to gain market share. We believe that we have a very differentiated solution that will allow us to grow and to capture market share with this technology. So I think that's certainly the case. To do that, of course, we have to make those cases proven, efficacious. And that's where the hospitals will certainly be interested in how you actually deliver the care, how it is, the ease of use, how the hospitals can actually manage the cost base and the effectiveness of such surgical procedures. And if they can do that, of course, they will capture some of the benefits. I'm not quite sure how that then would translate to payers.
What you're seeing is, of course, in the U.S., and I think that's the broader trend that we're observing, is, of course, a shift to decentralized, more specialized care where you see CMS attributing specific codes for outpatient decentralized surgical procedures. And so there, there is a very clear incentive also of the payers to move care to areas where care is being done more specifically, decentralized, more cost-efficacious. So I think if you look at it, if you peel it back from that end, I think all the players, all the stakeholders tend to benefit from this. And then let's not forget the patients, which Vasant shared some information earlier around the data that we have accumulated around patient performance, the return to work, the return to sports, and overall performance.
Perfect. That's very clear. And also neatly kind of segues into my next question, which was about the issue of closed versus open systems. Now, in terms of gaining market share, clearly, the kind of rationale only works if you have a closed system and everyone has gone down that road to start with. I've seen this happen in other industries where companies have used some kind of hardware to try and drive consumable volume. And it works for a while until someone's hardware stops being competitive and they kind of give up and go open source and then just have a business model that is purely selling the equipment rather than a kind of razor-blade model, at which point the economics for everyone else then starts to unravel because nobody wants to buy a system where you can only use one type of implant or consumable.
They're keener to buy something which has broader applicability and allows you to mix and match consumable providers. So there's no sign of it yet. But my question for you is, do you think there is any risk at all in the foreseeable future that somebody, either within orthopedics or outside it, breaks ranks and launches some kind of open-source system that allows surgeons to use whatever implant they do? And if so, how would you respond to that as somebody who currently has a closed system? Would you continue to try and push the same business model? Or are you open to adopting a different business model as the market potentially shifts in this regard?
It's a great question, Tom. I'd say that at this stage, it's absolutely logical that everybody is working on closed systems because of the complexity, because of, of course, the connections that are necessary because of the proximity in developing hardware/software aligned with implants. So this is a complex task, and of course, the leaders in this robotics industry for orthopedics are all developers and providers of implants, so this is absolutely logical that it is going in that direction. Whether this may move to a more open-source system in the future, I don't know. I can see your point in other industries. What that would require, though, is that open procedures and with that, the business model around the actual robots or navigation or whatever the combined tools are are actually lucrative, profitable, money-making for those providers.
Currently, I don't think anybody in this industry can say that you're achieving the same with only robotics versus your implant sales. So the robotics are the Enabling Technology to the implants, and they're connected that way. And that's, I expect, where the industry will continue to go for the foreseeable future. But then we need to, as you said, we need to be open for other business models, whether it's around the financing itself or whether it's the bigger picture that you just alluded to. We'll see where it goes. I think one of the opportunities here is if you have a really good system that is easy to use, that physicians like to use, that is quick to use, that is versatile. And if you think of our ambitions to build further applications on an existing system, then I think you're in a good position.
Whether, then, it ends up being an open system or stays a closed system, we'll see.
Yeah. And maybe a sort of follow-up question to that. I mean, how much differentiation do you think you need to drive somebody like a major Zimmer user off Zimmer implants onto Smith & Nephew implants with the robotic surgery platform? Because surgeons do tend to be quite wedded to the implants they use. And it's quite a wrench for a facility to invest in a robotic surgery system as well as move all their surgeons over onto a different implant system. So as one of the sort of arguably smaller players in orthopedic implants, to what extent is that a competitive challenge for you in that franchise? Okay. It's an easy sell to add this to your existing customers.
But when you're trying to take a big Zimmer or a big Stryker user to invest in their technology, they're not going to invest in your technology if they're only going to use it on a handful of implants every now and again. So the surgeons are going to have to change over. Otherwise, again, the economics aren't going to work for the hospital. So does actually being one of the smaller players in the orthopedic surgery market present additional challenges for you?
Whereas that might not be the case for somebody the other way around who's got a much larger market share, and it's maybe a bit easier to keep the surgeons on the existing platform and then just add, even though maybe an inferior technology, adding somebody else's, either a Mako or a ROSA because they get the benefit of being able to tell the patients that they do robotic surgery and surgeons get to play with the lovely whizzy toy. And even though it's inferior clinically and more expensive, on balance, the total economic cost of that is still lower than switching all the surgeons over onto a new implant system.
Yeah. I would say we are very, very confident in our implants and in the performance. And if you look at some of the registers, we have great clinical data. We have great survival data. And so from that end, I think we feel very confident. On the other side of it, we feel that we have something really differentiating with CORI now, with the ability to move into the ASCs with the combination with sports medicine and a lot more opportunities coming this way. What I would say from my experience in the industry is that instruments have been overlooked for a long period of time. And when you think of what the physician really deals with in a surgery, he spends much more time with the instrument than with the implant. Of course, you need to have a performing implant.
You need to be at a certain level, which we clearly are. But I think we're going to continue to see more evolution on the instrument side. And with instruments, I mean, of course, also all the Enabling Technologies, robotics, and navigation. And if you just look for a second what is required to do a total knee, the number of trays that are moved in and out of a surgical theater, what it requires in terms of preparation, in terms of education for the staff, but also in terms of cost associated with the autoclaves and the sterilization and everything. This is huge. And here comes an opportunity to change that and provide a different experience.
And then finally, I would also say that we have the ability to get the foot in the door there with great surface technologies with OXINIUM, with the use for patients, allergy patients, etc. So we have a natural ability to wedge into and then provide our technologies. So that's kind of our side of our view. We're really excited. Skip, I don't know if you want to add anything from your perspective.
Yeah. Yeah, Roland, I would. I think it's a very insightful question. And really, there's a couple of key components for me. It's really, as you start thinking about the differentiation of implants, it's really about the contracting and strategic bundling that you do to increase share. And that's kind of what was your point earlier. But I think this is moving beyond just the product, so beyond just the implant in regards to our approach and really building a portfolio of solutions that are differentiated, whether they be Real Intelligence to delivering different outcomes or talking about a closed versus open platform and how we actually drive new business models. And I think what you've heard from our competitors is really around the innovation of implants and how those are matched up to patients.
And maybe a different way of thinking about it from our perspective is really matching patient-matched logistics to lower the cost to serve for both the payer and the provider, where you match up the logistics platforms with a best-in-class implant with great clinical outcomes. And you do that through investments in people and Enabling Technology and the infrastructure. And you put all those things together. And that's really where you get meaningful movements in market share. And that's where we feel like we are headed. And again, we're pretty excited. We've got some great new product launches. We've got a very clear idea around how we want to win and a proven strategy. You've got a very motivated commercial organization. You've got CORI here.
And as we think about kind of the underlying demand curve that is orthopedics, we feel excited about our ability to compete within the current kind of changing environment. So again, I think the team's done a great job building a competitive platform and really creating points of differentiation that are going to allow Smith & Nephew to compete for, again, I think you guys said it, the decade ahead. And maybe there's a dominant market share position that moves in either direction here. So we're pretty excited about our ability to compete in that environment.
Good. Good. Thank you for that. That was, to be honest, a much more expansive answer than I expected. So thank you for that. That was a very helpful color. So I'll get back in the queue.
Okay. Once again, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Once again, please press star and one if you wish to ask a question.
Okay. I think we don't have any further questions. We're almost at the top of the hour so I would like to, again, thank you for your time, your interest in Smith & Nephew. Appreciate you dialing in. Wish you a good evening, good afternoon, wherever you are and thanks again. Stay safe.