Swan Endosurgical - founded by Olympus and Revival Healthcare Capital - is about to change the rules

Steve Bell deep dives into Swan Endosurgical

This wasn’t the blog I was intending to drop today. But things are moving fast, and the deeper I scratch below the surface on this one - the more I understand why this is such a game changer.

It is a game changer for the robotics industry - as it opens up a major strategic with interest in genuinely making progress into endoluminal therapeutic robots. More specifically the GI space.

It changes the game for imaging companies - and as a leader in flexible endoscopy it signals that a major shift is coming in this space. It’s like a 2008 NOTES reboot but from a very different angle. And I’ll explain why “this time” it’s going to work.

It is going to change the surgical landscape in ways that not everyone understands - as it moves us from gross excision to targeted tissue effects. And that will not be just “chop stuff out” anymore. Gross to precision.

It is a change in investors. We see again the Private Equity (PE) is stepping in where VCs really can’t (but they try) Long term plays with massive capital to get to take the company to the very end.

It is also about the team behind Revival - the horsepower they bring - the other plays they have done and are doing… this is not a coincidence.

It is an impressive “Build-to-buy” strategy that changes the playbook for who should develop products - why they should develop products and then who will take them and distribute them through their channel.

It is about humility from strategics and understanding that speed matters now in “TechMed” and you need teams of people with excellence in building, and building things fast. Not shackled by corporate policies and monthly meetings.

It is about to reset the landscape of endoluminal surgery and will open a gold rush of strategics accelerating their in house development projects. Those without a project... realising they better get buying or building. Several companies are about to to be genuinely made irrelevant in this space if they are not careful.

This is about strategic vision, and understanding that multiple platforms are the ultimate answer for the remaining companies that want to be in surgery and the emerging confluence to surgical interventionists. An idea started in 2008 but only now will this become what it aimed to be.

I’ll dig into a little of robotic endoscopy, robotic Natural Orifice Surgery, Rendezvous (concomitant) procedures, and true NOTES (Natural orifice Transluminal Endoscopic Surgery) 

So strap in for this one…

Changing the game in surgical robotics

To date - everything in surgical robotics has been about large form factor lips to toes surgical robots that are really... well let's be honest... thought of as the da Vinci.

Surgical robotics competition has (until recently) been about how you use a robot to “do surgery” like a da Vinci. Be it with a boom, a single port, a multiport - open or closed consoles. 
New form factors are changing that by bringing laparoscopy into 2025 with digital laparoscopy - or Lap 2.0. Take Moon Surgical or Distal Motion. But it's all just forms of laparoscopy by hand or by robot.

But endoluminal surgery / endolumenal (old SAGES term) has been around for a long time - (2006) with a lot of adventures into NOTES (natural orifice endoluminal surgery) or NOS (Natural Orifice Surgery.) However the early ventures into this were generally manual catheter like devices, or modified endoscopes (see Endo Samurai by… well Olympus.)

The Olympus Endo Samurai

What has changed is the advent of better and better robotics. Robotically controlled scopes (delivery devices) and then robotically controlled end effectors.

And you have to give EndoQuest Robotics the crown for having been pioneering this for the last years. And they are now well into human clinical studies (for the second time) and proving out the power of the robot at flexible distance.

But what this means is a radical change in surgical robotics - as Intuitive (despite having flexible catheter robots with ION) do not have a current system in this space.

That means there is space here for other companies to gain the traction first, gain the installed base first, and be the pioneers / leaders.

It radically moves the entire goalposts of robotic surgery. No, let me say more... it radically changes the entire sport! This is not about doing current laparoscopic surgery with a flexible system. It’s dramatically different - and moves the entire focus of when a procedure should be done. It’s going to be a different type of robot and different use of robot - but will slowly eliminate procedures that need to be done by traditional lap procedures today. More in a minute.

I just want you to understand that along with many other robots that are coming in other areas of healthcare - this is a major shift in the field of health robotics; and it changes the game.

The fact that you now have Olympus backing this is a big signal to the market. Even though Swan Endosurgical is a startup — it has a backer - a significant medtech backer... and a home it is destined for.

And if you think Olympus and Bob White (The new CEO) are stopping here… you are not reading the whole picture right. And I’m about to hopefully give you a 30,000 ft view.

Changing the game for imaging companies 


Imaging companies have been traditionally focused on manual held imaging solutions. Be that in laparoscopy, endoscopy or any "oscopy." They have been about building modular boxes (often full of air) for towers; and selling them in with nice lucrative service contracts.

The focus has been on “See” and more recently the addition of simple versions of “Treat.”

And these companies have significant pushes into surgery Olympus has all kinds of laparoscopic products - such as Thunderbeat advanced energy. And Storz has a lot of reusable lap instruments etc. They are still seen and perceived as the “imaging companies" of the industry.

But Storz by acquiring Asensus has lifted that ambition to move to a more therapeutic company (yes they have therapeutic not just imaging I know) but the move into robotics is both a defensive imaging play, and an aggressive move to elevate above being just the image provider.

(Yes both have OR infrastructure and energy and other good things. But they are imaging companies full stop. You won't convince me otherwise.) 

Olympus even more so on flexible imaging with their global dominance. But the flexible endoscopy really has been about the colonoscope or gastroscope imaging. Yes they have ancillary items but you would not call them a major therapeutic force in flexible endoscopy. People may point more to a Boston Scientific, or a Cook as the therapy provider. If you had to pick "surgical" or "Imaging" which would would best describe Olympus?

Pentax - is imaging.

FujiFilm - is imaging.

They are imaging companies.

The move by Storz with Asensus is a major shift in laparoscopy by an imaging company. This push with Swan is the start of a landslide change for flexible endoscopy; and a move to flexible endoscopic surgery. Both of these moves squarely push both companies away from “Imaging” legacy and move them deeper into the treat side of things.

See my post on the differences here: https://www.howtostartupinmedtech.com/post/endolumenal-surgical-robots-vs-endolumenal-robots-the-challenges

Pentax and Fujifilm must be now wondering exactly what they are going to do next.

Colonoscope companies across the world including startups should now be squarely thinking about how do they get their product smart - robotic - data driven - AI capable. And for a few, how do we make this surgical capable?

The sands have literally just shifted under that entire industry - and strategy meetings will be running this week and next and next in many boardrooms asking. WTF do we do now?

And that will be in the imaging company board rooms, and many of the surgical strategic’s boardrooms. Because Imaging companies have just jumped into their surgical arena. And an area they should be planning to go next.

It’s no longer about imaging - it’s about becoming strategic in the future world of the OR.


Changing the game for the surgical landscape and offering treatment options.

In 10 years surgery will not look the same. Our definitions of “surgery” will change. Combination approaches and therapies will change the face of what is done. Much as cardiac surgery changed and the interventionists took over - we might yet see the same here.

In 2006 - 2008 SAGES understood this and thought leaders in that space were working out how surgeons retained the main role in the OR... and did not want NOTES and natural orifice surgery to move into the hands of the endoscopist.

Today if we now think to what Endoquest is doing - ESDs - that feels fairly square in the realm of the endoscopists… but as the piloting systems becomes more like driving an “Intuitive” and interventions become more invasive (in terms of tissue removal) - it starts to feel more and more like surgery. And that is the realm of the surgeon - not the endoscopist.

And as we see more concomitant - rendezvous procedures - that for sure is more surgery than endoscopy. Often today there is a lot of collaboration between upper GI surgeons and endoscopists - but once we can work from one console and use the abdominal side and the GI side from one console…. Hmmmm then things maybe change. I mean are we paying two physicians for all these procedures?

The realm between what’s surgery and what’s pure endoscopy will blur as advanced systems allow more and more complex procedures from the within the lumen.. (NOS)

But then we breach the lumen and we are in the abdominal space… NOTES … and things change. It’s the direction of travel. It’s the direction of travel.

(Note: Once you breach the lumen and enter the abdomen high level sterile no longer cuts it for instruments - more on that later.)

We had a false start in 2007 / 2008 because the technology was not there, the acceptance of doing things robotically was not there, imaging was not there. Hospital administrators were not there. Sites of care had not changed… reimbursement vs cost didn’t work.

It’s 2025 and a lot has changed - and the time is NOW. Things are very different. Attitudes are different - the interventional radiologists and and interventional cardiologists have demonstrated beautifully what happened if the surgeons say “this will never happen.”

Moves like Swan Endosurgergy, EndoQuest, Intuitive, JNJ, Medtronic, Boston Scientific will drive this. Once the big players get into a market... it becomes "real."

Changing the game for medtech investments

I am no longer sure VCs have the depth and patience and dry powder for the massive lift in the robotics world. Many have been birned. What Revival Healthcare Capital has done here with Olympus is a long way from the common VC play. This is different level of thinking. $500 million will be deployed and it will take the company to a probable exit. Found - 1 investment right to the end. Exit.

Swan is not going to be bogged down on two sides:

First they will not be the struggling R&D in a big strategic - bound by their rules and SOPs and legacy products and politics.
 Second they will not live under the curse that most VCs put on these startups. Where management spends more time begging for money than delivering product. You cannot believe how much effort, energy, angst, pain we as management teams undergo doing the dog an pony shows to scrape together the next round. 

Instead all that horsepower should be 100% focused on the task at hand. Get the damned product amazing and out.

I feel that VCs do understand this - but maybe do not fully understand the impact of it. If they did - they would not allow this madeness of funding cycles in this type of deal to happen. Revival clearly gets it.

This is not the first build to buy in medtech. - but it may be the most important - and the most “designed from the ground up” approach.

For any company to have $500 Million (half a billion) already lined up from a single fund and a single strategic investor is just simply huge - and visionary. It is an understanding that just the development and very early use / commercialisation is a half billion lift. And that is about right. The other billion would be wasted on building useless commercial infrastructure and scraping sales together. Not in this play.

So it also (if the management gets this right and the milestones are set right) should evade the need to build that expensive - wasted - channel. No not instrument channels… sales and marketing channels. And that is a $1 billion move for most companies in robotics to do it right.. The fact that Olympus is the “most likely” acquirer means they have that channel already built - and the product just fits into it. (That’s another post about how you actually make that happen with low risk of dropping the baby… but…). Right there is the smarts in build to buy for this type of complex system. Smart.

This investment play sets a new standard for the industry. It sets the level of investment that companies need to get to make this even - remotely possible. And having done this myself… these numbers are about right… maybe a little optimistic... But in the right ballpark. You need $500 million to just get you past the regulatory hurdles and very limited market release to test the waters.

VCs are going to look long and hard to understand if they are still the dominant funding source for this kind of venture. I mean my personal experience is that they have moved further and further away from the early “venture” and more into the later stage scaling. Well that’s where they want to be - and I have a post I need to do all about this shift and the disconnect between the time to get to exit and VC funds. 

PE funds are generally longer term (generally) and are thinking about the later - longer exit. They don’t normally come in at such an early stage - but I think this is the major shift that I feel Revival are pioneering here. In at the start - long for the exit. And in this Build to buy model that exit is pre-wired. Smart, smart, smart investing. You X is not as big but the risk is lower.

Changing the game because Revival are involved

You need to dig a little deeper into Revival Healthcare Capital - the leadership team - the prior investments - and importantly, the deployed experts to support this venture, and sit on the board.

Revival Healthcare capital team

You have a lot of operational knowledge at Revival - with a lot of industry hard hitters that have done their time at places like Convatec. Rick Anderson and Lauren Forshey in particular - you need to drop in and look at Lauren as she will be siting as the board observer on the Swan Endosurgical board.

Oh hang on wait… hmmm …. What other board does she sit on… ohhhh Distal Motion (let me come back to that.)

And there are other strong leaders in there but Todd Pope pops out to me. Todd is the former Transenterix leader and he knows both laparoscopic robots with Asensus… but you need to go back into Todd’s past - where he was involved early on in NOTES, and flexible robotics with Spyder and other systems. He is no stranger to this space. He has unfinished business here.

You also have here a lot of Advisors at Revival including Martin Dewhurst - who is involved in Distal motion… oh let me come back to that. But there is horsepower from McKinsey, Johnson & Johnson and host off successful startups. This is a top talent team.

Okay let me come back to the portfolio. It is small yet highly focused. And in their history Revival were involved in one of the successes from the world of natural orifice surgery - Apollo Endosurgey - which they exited to Boston Scientific. So they fully understand this space. And how to have success in it.

But it is the next company that is interesting - Distal Motion is in their portfolio for companies. So they also understand the realties of building a company in robotics - what it takes and what a strategic would bring to the robotic party. But you have to dig a little deeper and understand how the Swan Endosurgical deal fits in.

Revival Healthcare Capital Investments

To me - there is no coincidence that they have gone into Distal Motion and to Swan. This starts to look like a portfolio play. You have Rick Anderson as chairman of the Distal Motion Board with Todd Pope on it. And you have e a wild card of Heinz Jacqui - who is former Olympus (vague connection but …) 

Now you start to pull this all together - and “of course” Revival had deep discussions with Olympus. And of course Olympus will not be blind to the fact that their imaging towers and Thunderbeat are a perfect fit for Distal Motion. And it gets them into lap robotics without hammering straight into Intuitive (per say). And Bob White CEO of Olympus - was at Covidien and Medtronic and knows this space inside out.

And Olympus would well be able to have overlap between DM and Swan… and rendezvous… and and and..

If this was any other investment firm I’d skip over this… but the ties are way too deep. For me, only only for me maybe… this is a roll up and has Olympus ready to deploy into robotics in a bigger way than just Swan.

 (Maybe I'm hallucinating here...)

Changing the development landscape with Build-to-buy

Not the first build to buy. But this is a biggie and very meaningful. Joe Mullings led this theme, and I have been agreeing for a long time that the way to do this right is for each organisation to lean into their own strengths and deploy teams that play to those strengths.

Large strategics are perfect at Go To Market, Marketing, Sales, reimbursement, leveraged scale, deploying resources at scale, large scale manufacturing and supply chain - and ensuring profitable sales growth like clockwork.

Small startups are brilliant at ideation, pivots, aggressive “try it and see”, focus or die. They are great at attracting the rebels, the out of the boxers, the renegades that are needed to pull off these almost bonkers ideas. They do it fast and lean. Everything R&D teams in a big strategic are hamstrung daily to do well.

The strategic quarterly reviews, cuts, budgets, protect the cash cows, SOP mountains, risk aversion, armies of “Don’t try that” police, people wanting pensions not progress… etc. All those things become a bog for fast and rapid product innovation. They are often found in strategics.

On the other hand - start ups have no global footprint, they have “we can do anything” people that often over reach, they don’t have massive marketing teams and playbooks, they don’t have immediate channel and footprint. This makes them great inventors... but slow and commercialisers - and inefficient commercialisers. It takes years to get expensive traction.

Build to buy is the match made in heaven. It allows a start up to recruit people that would never go to the strategic. The people that will build and run SWAN would never in their wildest dreams got to - or go back to Olympus. The people in Olympus would… in the main… be lost at SWAN. They's hate the chaos and risk. Perform or get out culture that comes with a startup.

Olympus deploys cash (with Revival) - has a clear remit of what they need to compete in the future. Swan gets cash and guaranteed injections of cash (they know the runway) and the milestones. It allows them to focus on build not raise. It also - for both sides - sets clear milestones and valuations - and the all-important exit option. Total alignment.

I say "exit option" as it is never guaranteed that the Strategic will still want the company in the future. Don’t think Olympus do not have their own R&D working on similar projects - maybe they will come up with something better and faster? I smirk.

But a clear and well defined exit is pre loaded into these deals if both sides agree. And if the work up front has been done right - then it should be a slam dunk.

This is a BIG build to buy. And it changes the way the industry should think about major projects and major sector entries. If a strategic has a major gap - then they need a better strategy than just “let’s have a go at R&D” or “Let’s see what’s on the market and buy it when they get profitable... and fight every other company.”



Instead there is a bespoke nature to these deals “We need this. Please build us this and we can support that effort with these things.”

The devil is always in the details - and if this build to buy has been structured right - the hand over at the right time in the right way and to keep the team engaged as long as needed post integration… then it is the ONLY way these deals should be done in the future. The classic - let a VC build something of this magnitude and we will invest a bit… is not what this is. It fractures that model.

Now that doesn’t mean VC backed startups won’t be out there and more "Shockwaves" won’t repeat.. but this is the way a strategic can fill a gap and do it fast, cash efficiently and with less risk of internal hiccups blocking the progress. 


I do want to tip my hat to Medtronic here as they have been in some of the pioneering build to buy ventures of the past... such as Half Moon Medical.

Changing the game with knowing the roles

Olympus - “We need this and will take it based on X.”

Revival - “We will fund this to the end of the runway.”

Swan - “Give us the money, milestones and deadlines and let us build it. Just keep out of our way.”

With this clarity of roles - clarity of “Need” “Funding” “Timing” “Exit and integration” - all three parties are playing to their strengths.

Key to this will be ”The team” at Swan. Give me the team over the idea any day. And what this clear and well defined structure, mission, end point does is allow clarity on building the right team for the right mission.

This allows Swan to hire the right people at the right time in the right place. The early focus of Swan will be to make the worlds greatest GI therapeutic robot. Not “How do we get Thunderbeat on a. Flexible robot?” - “How do we adapt the current Olympus scope to be driven robotically.”

By knowing this - and not being encumbered by “Let me promote my mate from the surgery division to lead this as it’s a good career move…” ensures that this team will be built with the right people based on competence and experience. No favours.

I already know some of the people at Swan… and they are the BEST at what they do. They would suffocate in Olympus - but in Swan they will thrive. And they will know their role - objective - sink or swim. Their mission is clear - so their role is clear. They will have the right competencies for the job in hand.

Revival - their role is bring cash - first and foremost which brings security and allows the startup to “do things right, in the right order, the right way.” But it also brings a powerhouse of advice and network. Just scan the Revival profiles to know what I mean. If leadership at Swan needs advice - they have it through Revival and their network. Just go do some homework on who they are. And expext a host of industry talent to want to be part of this.

Olympus have an important role in this - not just cash. If it is done right they will not get in the way - but will be there to provide assistance when needed. Few know imaging better than Olympus. Few know flexible endoscopy better than Olympus. Few have a better KOL network in lower and upper GI flexible endoscopy than Olympus.

They have technical know how, supply chain, QARA up the wazoo, labs , training facilities, networks and more. If they play their role right and help when needed - that can be a massive leverage for Swan to use. And I Hope Swan are smart enough to not reinvent everything here. They should lean on Olympus when needed (and align the QMS - just saying.)

It’s not like Olympus were not working on this for years and years and years.

They know a few things not to do and a few things to do.

If egos can be put to one side - and all three of these players run their roles the right way 1 + 1 + 1 can equal 5. That is the delicate balance that needs to be struck here and enough distance to not get in each other’s way. Let’s see how this unfolds.

Changing the game in endoluminal surgery

Endoluminal surgery has been around for longer than people think. Endoluminal robots have been around for almost as long. But even with the 2005 to 2008 push into NOTES - it never really took off - and for many good reasons. Primarily it was just too early and then a finnacial crash. But a ton of lessons were learned from NOTES and some of the endoluminal procedure that were performed manually or by assistive news systems like Apollo Endosurgery (Oh did I mention that was a Revival investment?) Today we have a veruy strong foundation that SAGES NOSCAR meetings have been building on. Natural Orifice Surgery and NOTES never totally died. But now is its renaissance.

One of the most high profile companies in natural orifice robotics is EndoQuest robotics - formally the ColubrisMX system. This company has been pioneering endoluminal robotics for years and are finally into their IDE trial with the latest and greatest system.

EndoQuest the pioneers of robotic Endoluminal surgery

But their road has been tough… one thing that Swan will find out quickly is that they need to build two companies - not one. One will be to control a flexible scope and flexible instruments at distance - small diameter - flex inside flex - which is already a kinematic challenge.

But getting consistent control at a 2M distance of small flexible instruments - and making them have enough elbow and wrist and strength to be effective is easier said than done.

However it is the second company that is the hardest. The reimbursement of the procedures - the cost of the instruments leads to only one conclusion. Cleaning and re-using multiple times. And that is difficult with straight and wristed lap instruments - we are now talking about super fine - multi jointed - long - very long instruments with lumens and pulleys and wires and energy.

We are talking about a delivery system that is way more complex than a standard endoscope with multiple channels that will be feeling some serious stresses and wear. This is not dumb push n pull instruments through a simple channel.

And all of those mechanisms needs to be cleaned - debris removed - (delivery scope system and instruments) and then be able to be refused 20 times. And each time work perfectly.

Complex endoluminal instruments

The second company they need to build is a cleaning and sterilisation company - and that will be (in my mind) the biggest challenge for Swan.

Can they do it from a technical point of view. Yes. I mean no one is offering up $500 Million without some form of due diligence and “yes they can do this.”

But can they get enough re-uses - and clean reuses for it to be a genuine profitable “Business”?

That is the $500 million question that Swan needs to answer... and that EndoQuest has already answered.

But this venture into this space by Olympus is a big change for this fledgling part of the industry . They do know how to do a lot of this… and they are motivated. They are clearly targeting the same field as EndoQuest — but EndoQuest is not alone. There are several start ups looking at this space - including INEN Robotics out of IRCAD. You have Neptune medical and a whole raft of (see my robotics list) new entrants.

But it is the three big robotics companies and several smaller robotics companies, plus others with flexible endoscopy plays that will have now had a serious wake up call.

Intuitive with ION have a focus on endolumenal robots - they also have lap robots and SP robots. To me ... it is so obvious they will now accelerate their GI ION program (that they must have going on.)

Swan changes the game because it is now no longer “wait and see” for Intuitive, JNJ or Medtronic. This bold move has set the clock running for patent land grabs, first to market, who owns applications and.... a major talent land grab. There are not that many people that will be able to make this ahppen. Boston and Cam,bridge UK are already in turf wars for talent. Advisors are few and far between. First mover works here.

Johnson & Johnson are deep in with their multiarm robot Ottava. But they have Monarch and Monarch 3 arm for PCNL. Fred Moll always had a dream of a 6 arm Ottava with the ability to do Colorectal and upper GI flexible robotics plus concomitant procedures (rendezvous.)
 JNJ cannot be decades behind again as they know how painful that is. And they shouldn’t be… so they may well be dusting off the Auris projects and seeing how they accelerate in this space for when the dust settles a little with Ottava.

And don’t rule out Medtronic. HUGO is a massive investment. They are already in GI and have a comprehensive product line of GI products. It is not a great leap of faith to wonder if they too would apply their robotics knowledge and combine it with their GI knowledge.

Medtronic GI portfolio

All three of these will have seen this as a wake up call that a leader in GI Endoscopy is about to lay down the gauntlet.

But this also affects several other companies - Pentax and Fujifilm must now be wondering if they even have a future if they do not get into robotics for GI. And it cannot be simply diagnostics and AI driven robotic colonoscopes. The bar is now set at GI endoluminal robotic surgery. So it has just changed that entire landscape. No one will be happy with just a robotic colonoscope. The ultimate goal is to be able to do ”surgery” inside and outsdie the lumen.

And that should also not be lost on companies like Cook, or Boston Scientific or any other of the myriad of “accessory” companies for the GI space. Because robots work on razor and razorblades models.

And GI surgery robots get rid of the need of a LOT of ancillary products that exists to overcome the limitations of flexible endoscopy today. If you can suture - why use an OVESCO?

If endoliminal therapeutic robotics takes hold - it will be a different raft of companies delivering the tools (and gaining the revenues) through the robot ecosystem. Think Intuitive inside the lumen - not the technical but the land grab of the procedure value.

(That is why you deploy $500 million here folks!)

So a lot of companies will now be looking long and hard about “can we also deploy “”$500 million?”

Should we get into a build to buy in this space?

Should we take a leap and just be quick and buy EndoQuest before someone else gets them?

Should we dust off our old R&D projects?

Should we accelerate that project we have going?

Can we just ignore it and hope it goes away? Oh shit.. no that’s Olympus now not a small startup.

WTF do we do now and do fast? - the clock is now ticking.

Summary

I’m hoping my colourful ride through this topic sheds some light on what I think is happening here. I can be wrong on a lot of this, but no matter which things are right and which things are wrong - Swan Endosurgical has simply just changed the game in surgery and GI endoscopy - and people need to take note.

These are just musings and opinions by the author for education paurposes only. Don't take them as forward looking statements or any of that jazz.