Gary S. Guthart, Ph.D., President and CEO
Lonnie M. Smith, Chairman of the Board of Directors
Marshall L. Mohr, Sr. VP and CFO
Dave J. Rosa, Exec. VP and Chief Commercial Officer
Myriam J. Curet, M.D., Sr. VP, Chief Medical Officer
Mark J. Meltzer, Sr. VP, General Counsel and Chief Compliance Officer
Salvatore J. Brogna, Exec. VP, Product Operations
Bob DeSantis, Sr. VP, Instruments and Accessories
Mark Johnson, Sr. VP, Regulatory and Quality
Charles Jones, Sr. VP, Design and User Experience
NUMBER OF EMPLOYEES: 3,755
GLOBAL HEADQUARTERS: Sunnyvale, Calif.
Robotic surgery has been garnering a lot of attention within a number of circles, from the mainstream media to medtech investors to surgeons. It has been a rapidly growing space as new competition emerged. Johnson & Johnson teamed with Google to form Verb Surgical to develop and commercialize a robotic surgical solution. Stryker Corp. has made a significant investment in its Mako robotic surgical system (which it acquired in 2013). Other companies are in various stages with their own innovations. But the company that really started the buzz about this surgical option was Intuitive Surgical with its da Vinci System back in 1999.
Since then, the company has enjoyed a substantial “lead” over the rest of the industry in terms of similar technologies coming to market. As a result, Intuitive Surgical has continued to see steady growth while continuing to expand its offerings to help support the system that put the company on the map. In 2016, that growth was reflected in a 15 percent increase in the number of da Vinci systems in clinical use, from 3,597 to 3,919 systems by year’s end. The systems can be used for surgeries in the areas of general surgery, urology, gynecology, thoracic surgery, and transoral surgery.
The aforementioned increase in units in 2016 resulted in a 13 percent rise in the company’s revenue for the year versus 2015 ($2.7 billion in 2016; $2.4 billion in 2015). That total breaks down into two segments—Product ($2.2 billion; 81 percent of the company’s total revenue) and Service ($517 million; 19 percent). As those segment percentages broke the same way in 2015, both segments saw bumps in revenue from 2015 ($1.9 billion for Product; $465 million for Service).
The Product segment further breaks down into two product types—Instruments and Accessories, and Systems. Driven by procedure growth of approximately 15 percent as well as higher sales of the company’s advanced instruments, the Instrument and Accessories sector saw a revenue increase of 17 percent over 2015 ($1.4 billion). The Systems division also saw an increase over 2015 (10 percent) to report revenue at $792 million.
ANALYST INSIGHTS: There are no questions Intuitive has a strong track record. It has single-handedly created a robotics category that is the envy of the medical industry. While the analysts expect a major M&A from Intuitive, it continues to preserve its cash (and shareholder value) through re-purchasing its stock. With upcoming robotic category pressure from Google, J&J, Medtronic, and others, it wouldn’t be surprising to see some type of M&A in 2018.
—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors
In terms of region, the United States dominates the company’s sales, accounting for 72 percent of the total. That number inched up yet again in FY16, over 2015’s 71 percent and 2014’s 70 percent. U.S. locations were the destination for 338 of the 537 systems the company shipped in 2016, with 96 headed to Asia, 79 to Europe, and 24 into other markets.
The company’s Service revenue saw an 11 percent increase over 2015’s $465 million. The rise was attributed simply to the increased number of da Vinci Surgical units that were in the field.
Adding to the potential sources of revenue, Intuitive announced several notable technologies in FY16 that had received FDA clearance. One such innovation saw the integration of Intuitive’s da Vinci Xi Surgical System and Trumpf Medical’s (a division of Hill-Rom) TruSystem 7000dV advanced operating table, enabling Intuitive to be able to offer Integrated Table Motion in its system. The end result provides the real-time ability for surgical teams to be able to reposition the operating table while the surgical robotic arms are docked. This feature enables the team to benefit from the use of gravity to expose anatomy during a procedure, maximize reach and access, and reposition the table to enhance the anesthesiologist’s care of the patient.
“Our collaboration demonstrates the true power of partnership,” said Dirk Ehlers, president of Hill-Rom Surgical Solutions. “When innovative, focused companies like Intuitive Surgical and Trumpf Medical come together to bring highly advanced medical technologies together in a true spirit of cooperation, good things can happen for patients and their caregivers. We are proud of this new, enabling capability in minimally invasive surgery.”
Intuitive also received FDA clearance for its da Vinci Xi EndoWrist Stapler 30 instruments and reloads. With the new curved-tip offering, the instrument enables enhanced placement and visualization around tenuous vasculature, according to the company. The product was ready for distribution in the first quarter of 2016.
“Combined with the da Vinci Xi Surgical System’s 3DHD vision, access, and surgeon control and autonomy, the EndoWrist Stapler 30 naturally expands the da Vinci stapling portfolio,” Sal Brogna, executive vice president, Product Operations, Intuitive Surgical, said in a press release announcing the clearance. “This clearance further underscores the progress we’ve made in developing a broad suite of tools and resources for surgeons spanning several specialties, including thoracic and general surgery.”
Further expanding the company’s offering, FDA clearance was gained for da Vinci Xi Single-Site instruments and accessories. This line of products enables surgeons to perform certain procedures—cholecystectomy, benign hysterectomy, and salpingo-oophorectomy—through a single incision. The technology in this clearance is an improvement on previously existing devices for single-site procedures, which were first cleared in 2011. According to the company, these offerings improve the surgeon’s vision within the surgical field, offers an easier setup, and enhances patient access with greater range of motion for the arms.
“The da Vinci Xi was designed to seamlessly integrate advanced and future technologies and we are extremely pleased to further expand our line of product offerings with the clearance of Single-Site instruments and accessories,” said Brogna. “Single-Site technology adds great versatility to the da Vinci Xi by enabling both single port and multi-port surgery on a single system.”
In September 2016, Intuitive Surgical announced a joint venture with Shanghai Fosun Pharmaceutical Group to research, develop, manufacture, and sell robotic-assisted catheter based medical devices. The initial indication being targeted is for the treatment of lung cancer. The joint venture will be registered in Shanghai, where it will perform the research and development activities, along with distribution into China. Intuitive Surgical will handle distribution outside of China.
“We are excited to deepen our partnership with Fosun Pharma focused on delivering innovative healthcare solutions in China and around the world,” said Dr. Gary Guthart, president and CEO of Intuitive Surgical. “We are proud to make this important long-term commitment to China.”
Chindex Medical Ltd., a subsidiary of Fosun Pharm, has served as a distribution partner to Intuitive Surgical in China since 2011.