Monday, November 01, 2021 4:07:06 PM
My biggest take-aways from the article:
1) "bringing in $4.2 billion of revenue and $2.9 billion of gross profit so far this year." ISRG in 9 months pulled in $4.2B in revenue and $2.9B in profit. That means they made $2.9B profit off of $1.3B in costs! Around 225% profit above their relatively meager cost basis... No wonder their customers are upset! And that's $1.4B in revenue per quarter, so a little under $6B revenue for the year. More than half from instruments and accessories alone. Not too shabby, and proof that there is plenty of money in this market for competition.
2) "It could be as many as five years before J&J's Ottava actually hits the market in the U.S. or Europe after trials are conducted and regulatory review, a complex process with multiple hurdles that could spur further delays." JnJ announced a 2 year delay, but the article puts them at market approval in 5 years! 5 years from now before they can sell Ottava serial number 000000001. Enos is expected to be available for sale in 24 months or less. Just thought I'd mention that.
3) "In the context of a market that may be 5% or less penetrated ... taking the time now and getting it right makes sense." If ISRG's nearly $6B revenue represents less that 5% of the potential market, the opportunity is for more than $100B of market potential per year.
So with Medtronic just starting their FDA process hoping to be selling systems here in 2 years, and such a huge market opportunity remaining untapped... JnJ should be stepping up to the Titan plate with an offer. It opens the doors to that market place up to 3 or more 3 years sooner than their current schedule. And it's not that those first 3 years are necessarily going to generate gigantic revenues; it is a building process. So if JnJ puts Enos in the US market 3 years earlier than Ottava, they start building that customer base in robotics 3 years earlier and they would be collecting third year revenues from Enos before Ottava earns its first nickel. Besides the growing revenue stream, they would have sales, service, and support systems in place prior to the Ottava launch. This would be a score for JnJ on so many levels!
Competition can be good. Even better if two companies are competing to buy out my investment in Titan!
Message in reply to:
https://www.medtechdive.com/news/jj-ottava-delay-intuitive-surgical-medtronic-robotic-surgery/609090/
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