(Reuters) - Johnson & Johnson said on Wednesday it would buy Auris Health Inc for $3.4 billion in cash, gaining access to the privately held company’s surgical robotic scope used in respiratory procedures and the detection of lung cancer.

FILE PHOTO: A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake/File Photo

The deal marks J&J’s expansion into the healthcare robotics market that is expected to reach nearly $12 billion by 2023, and pushed down shares of Intuitive Surgical Inc , the current leader in minimally-invasive robotic surgery.

J&J has sold some divisions such as diabetes care, as it tries to focus on and improve sales at better-performing businesses like cancer treatments.

“We are encouraged to see J&J moving more aggressively in the robotics field, which has been a gap for its medical device business,” Wells Fargo analyst Larry Biegelsen said.

Sales in J&J’s medical device unit have been recovering since turnaround efforts began in 2016, and the company now expects that unit to achieve above-market growth in 2020.

Auris was founded by surgical robotics pioneer Frederic Moll, who also co-founded Intuitive Surgical. Moll will join J&J after its acquisition closes, the company said, but did not disclose what role he would play.

J&J’s shares were up marginally at $134.24 in midday trade, while Intuitive Surgical fell as much as 2.5 percent to $526.36 as analysts said Auris could become a formidable competitor given J&J’s commercial scale.

Auris’s flagship product is a robot used by surgeons via a controller to direct a scope through a patient’s body with cameras.

The device, called Monarch, was approved by U.S. regulators last year for diagnostic and therapeutic bronchoscopic procedures, where an instrument is inserted into the nose or mouth.

Auris initially focused on lung cancer, the leading cause of cancer death worldwide.

J&J said the acquisition would complement its purchase last year of Orthotaxy, a privately held developer of software-enabled robotic technology for surgery.

J&J’s Ethicon unit, which will absorb Auris, has a partnership with Alphabet Inc’s Verily Life Sciences, under which the companies formed a surgery-focused company called Verb Surgical Inc in 2015.

“Investors have been yearning for an acquisition for JNJ’s MedTech and while this entity may not have been top of mind, it complements JNJ’s Ethicon franchise and its respiratory health focus,” BMO Capital Markets analyst Joanne Wuensch said.

J&J’s agreement also includes additional payments to Auris of $2.35 billion, based upon Auris hitting certain milestones, which J&J did not specify.