Intuitive Surgical is a publicly traded company that produces and sells robotic surgical systems for numerous surgical procedures, such as urologic surgery, gynecologic surgery, cardiothoracic surgery, general surgery and head and neck surgery. The company is headquartered in Sunnyvale, California and has 2,100 employees.
The company had revenues of $1,757.3 million in the fiscal year ended December 2011, an increase of 24.4% over 2010. It had an operating profit of $694.8 million in fiscal in the period, an increase of 25.1% over 2010.
Strategy
The company’s strategy is based on two pillars. First, to seek regulatory approval for a growing number of procedures that can be performed with the Da Vinci system. Second, to present the robotic system as a marketing tool for the hospitals that buy those that will draw additional patients for the hospital, who will go there specifically to the their surgical procedure with the Da Vinci system.
In 1999, Intuitive launched the Da Vinci Surgical System. In 2000, the FDA for general laparoscopic surgery cleared the system. In 2001, the company received approval to use the system to perform Cardiotomy procedures. In 2004, it received approval for cardiac revascularization. In 2005, it received FDA clearance for use of the Da Vinci surgical system to perform urologic/gynecological laparoscopic procedures.
By enabling the Da Vinci system to
In 2010, Intuitive launched a Da Vinci Surgical Simulator that is designed to give the user the opportunity to practice to use the system in a very realistic way.
Financials
In 2012, Intuitive had revenues of $2.18 billions, up 24% from 2011. The operating profit was $878 million, up 26% from 2011 and corresponding to 40.3% of sales. The copany ended 2012 with cash, cash equivalents and investments of $2.9 billion, up 34% over 2011.
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |
| Sales | $601.00 | $875.00 | $1,052.00 | $1,413.00 | $1,757.00 | $2,179.00 |
| Gross Profit% | 69% | 71% | 71.40% | 72.90% | 72.50% | 72.10% |
| Operating Income | $207.00 | $311.00 | $377.00 | $555.00 | $695.00 | $878.00 |
| Operating Margin% | 34.30% | 35.50% | 35.90% | 39.30% | 39.50% | 40.30% |
| Net Income | $145.00 | $204.00 | $233.00 | $382.00 | $495.00 | $657.00 |
| % of Revenue | 24.10% | 23.40% | 22.10% | 27% | 28.20% | 30.10% |
The da Vinci Surgical System has a price range of $1.0-$2.3 Millions and in 2012 revenue with sales from the system were $933 million. The instruments & accessories range between $1,300-$2,200 per procedure and the 2012 revenues were $903 million. The annual service agreement goes from $100k-$170k/year and the 2012 revenues were $343 million.
Performance
At the end of 2012, there were 2,585 da Vinci Systems installed in approximately 2,025 hospitals worldwide. The company has ownership or exclusive rights to over 1,250 U.S. and more than 1,150 US and foreign patent applications.
Almost 450,000 Da Vinci procedures were performed in 2013, up approximately 25% compared to 2011. The da Vinci System is the first option for minimally invasive hysterectomy in the U.S. for benign reasons[i] and the first treatment for women facing gynecologic cancer[ii]. For prostate cancer patients, the robotic system is used on four out of five radical prostatectomies in the U.S.[iii]
In addition to develop its own technology, the company has relationships with several industry leaders including IBM, MIT, John Hopkins University and Heartport Inc. (Johnson & Johnson).
Outlook
Given the clear benefits of the da Vinci system with less blood loss, fewer complications, shorter hospital stay and reduced scarring[iv]
From 2011 to 2012, da Vinci gynecology procedures grew by approximately 30% , driven by growth in benign indications in the US such as hysterectomy and sacrocolpexy.
As the Affordable Care Act is implemented, da Vinci is focusing to show its value through peer reviewed articles that demonstrate high patient satisfaction and reduction in hospital borne infections, complications and readmissions.
In 2012, the company obtained a 510(k) clearance for the da Vinci stapler and launched the da Vinci Vessel Sealer to facilitate complex general and gynecology surgery.
The company has a goal of performing 1,300,00 procedures per year in the US and 1,300,000 procedures worldwide, what corresponds to $4.1 billion in annual sales of instrumentals, $ 2 billion in annual sales of systems and $1.3 billion in service revenue, what adds up to $7.4 billion in sales per year. From the total number of surgeries, the biggest number will come from urology with 150,000 procedures and gynecology with 500,000 procedures.
From: Fernando Cembranelli, 04/08/13, Fuqua Medical Device Commercialization Class Company Report
[i] Claim based on Solucient market analysis and internal Intuitive Surgical data on file.
[ii] Since da Vinci Hysterectomy procedure numbers grow rapidly, Intuitive Surgical does market share on an instantaneous (i.e. quarterly) basis. In 1Q12, there were 9,295 da Vinci Hysterectomy cancer procedures in the US. Assuming cancer has no seasonality, which is the case, there are ~13,750 cases per quarter (55,000 / 4). 9295/13750=68%
[iii] National Cancer Institute. NCI Cancer Bulletin. Tracking the Rise of Robotic Surgery for Prostate Cancer. Aug. 9, 2011 Vol. 8/Number 16. Available from: http://www.cancer.gov/ncicancerbulletin/080911/page4.
[iv] Landeen L, et al. A Comparative Study of Four Surgical Approaches for Hysterectomy at a Single Institution: Outcomes and Costs of Robot-Assisted, Laparoscopic, Vaginal, and Abdominal Procedures. Pending publication June 2011, South Dakota Medical Review.
