That link worked for me earlier (I am not a subscriber nor did I pay). It must have been because I googled the title and entered from Google.
----------------
We recently wrote on the advances and proliferation of robotics in the industrial world. There are other areas where robotics is having a significant impact.
Recent advances in sensors, machine vision, drive motors, electronics and hydraulics are giving rise to technologically superior robots that can augment skilled human endeavour. These machines are raising productivity, improving outcomes and having significant economic impact.
Healthcare is an area where robotic surgery is increasingly making inroads. This is also the area where there is an investable opportunity: Intuitive Surgical (ISRG US), a publicly listed, US-based pioneer in the design and manufacture of robotic surgery systems.
Intuitive Surgical has had a virtual monopoly in the robotic surgery space since it was founded in 1995. The company went public in 2000.
Intuitive Surgical basically invented robotic surgery for complex procedures. Its main product is called the da Vinci system (named after the legendary Italian inventor). This consists of a surgeon’s console, a side cart for the patient and a vision system. The operating surgeon controls arms which have endoscopic instruments on the end that perform all surgical tasks such as cutting, cauterising and stitching.
The da Vinci system essentially replicates the hand and wrist movements used during surgery.
The system performs what is known as minimally invasive surgery which results in less trauma, blood loss and pain for the patient and significantly shorter hospital stays, while requiring fewer operating room staff.
It can also boost the hospital’s bottom line. Surgeons can perform more procedures in a day because the system reduces fatigue: surgeons don’t need to stand for hours on end, craning their necks to maintain a proper visual perspective.
Advanced 3D visualisation provides an almost perfect and magnified view of the affected area in the patient so mistakes are almost non-existent. However, it is the surgeon who controls the machine, so the level and quality of training is paramount.
That being said, when I visited the company in 2011, I was allowed to sit at the console and “operate” on a capsicum — and miraculously it survived! Given that I am more at home with a chainsaw than a scalpel, the way that the machine translated my clumsy and untrained hand movements was quite incredible.
Historically, the company has enjoyed an incredible run of growth as hospitals in the US and around the world bought da Vinci systems. The installed base now includes 2300 systems in the US, 573 in Europe, some 300 in Asia, and 38 in Australia and New Zealand. The systems are not cheap and can cost nearly $US2m depending on the model.
Systems are not the only revenue generator for the company, as the specialised cutting devices on the ends of the arms must be replaced after each operation and the machines must be serviced regularly — another recurring revenue stream that can exceed system sales.
Procedures that have been commonly and successfully undertaken by doctors using the da Vinci system include prostate surgery, hysterectomy, gall bladder, kidney, and other lower abdominal surgery. In 2014 there were over 570,000 procedures undertaken globally employing da Vinci systems. The company also believes there are many more opportunities in general surgery, cardiac/thoracic procedures and complex head and neck surgery.
In 2014 the company introduced two new products to the market — the da Vinci Xi and the da Vinci SP. The Xi is a fourth generation system with a number of improvements including slimmer robotic arms, laser targeting with voice-activated set up, and self- calibrating endoscopes. The SP is a new one-armed patient side cart dedicated to single port surgery and has already been approved by the FDA for urology procedures.
Intuitive Surgical recently reported second quarter earnings and it was a great result, posting increases in revenue, profit and number of procedures that were significantly above Wall Street estimates.
Intuitive Surgical generated Q2 2015 EPS of $US4.57 which beat consensus estimates by a whopping $0.59.
That represents Y/Y EPS growth of 29 per cent.
Revenues of $US586.1m (+15.7 per cent Y/Y) beat consensus by $US19.24m.
A breakdown by business verticals saw instrument sales up 13 per cent to $US296.3m; systems revenues rose 22.5 per cent to $US176m, and services gained 7 per cent to $US113m.
The company also said worldwide procedures for its da Vinci Surgical Systems rose 14 per cent, driven by growth in the US and Japan — its two main markets.
In terms of actual procedures, hernia repair was strong as were colon resections, and prostatectomy. Hysterectomy procedures were “stable”.
System shipments in total (Si and Xi) increased 22 per cent from 96 to 118. Some 64 per cent of the system placements were second generation Xis.
The new da Vinci Xi systems will go on sale later this year in European markets and in the US in 2016 after final approval by US regulators.
For now, Intuitive has the market to itself but eventually there will be competitors. Large companies like Johnson and Johnson and Covidien (now part of Medtronic) already operate in the laparoscope and medical device market and they have expressed interest in robotic surgery.
There are some smaller emerging companies such as MedRobotics, SOFAR and Transenerix that could eventually ”disrupt” Intuitive Surgical’s almost unassailable market position, although this is probably 5-10 years away and only with smaller single-site machines.
Intuitive Surgical has a market capitalisation of $US18.8bn and trades on 25 times 2016 EPS.
News 
Market Data 
Discover 
AI
