New Studies Show Positive Data For Robotic Surgery, Can Intuitive Surgical Rebound?

In two separate press releases over the last several days, surgical device maker Intuitive Surgical (NASDAQ:ISRG) revealed results of four research studies that suggest that robotic-assisted surgery offers advantages relative to traditional open surgery procedures on various parameters. Of the studies cited, two were focused on lobectomy (a type of lung surgery) patients while the other two based their research on hysterectomy procedures. Each of the studies focusing on lung surgery concluded that robotic-assisted procedures generally resulted in shorter hospital stays, fewer blood transfusions and fewer air leaks in the lung post-surgery compared to open procedures. For hysterectomy procedures, Leitao, et al concluded that robotic-assisted surgeries were less expensive than open surgeries. ((Press Release, Intuitive Surgical, April 28 2014)) ^[1]

However, it is worth noting that neither of the four studies provided any conclusive evidence of robotic surgeries being preferable to minimally-invasive laparoscopic procedures. The studies suggested that robotic-assisted lobectomy was on par with its laparoscopic counterpart technique called VATS (Video-Assisted Thoracoscopic Surgery). For hysterectomy procedures, Wright, et al deduced that robotic-assisted hysterectomy procedures were in fact more expensive than laparoscopic surgeries.

See our full analysis for Intuitive Surgical

These findings provide mixed news for Intuitive Surgical, which is desperately trying to restore the credibility of its da Vinci surgical systems in the market and shift market sentiment in its favor. With these studies, the da Vinci system is likely to gain acceptance as a better alternative to open hysterectomy and lobectomy surgical procedures, but it still might not be able to effectively compete with laparoscopic procedures in terms of cost-effectiveness.

The company reported highly disappointing first quarter  results last week, with profits falling 77%, and is looking for ways to revive growth. Although the company introduced two new versions of its da Vinci system recently (da Vinci Xi & da Vinci Sp) to improve demand, it is unlikely to be a sufficient effort. We expect that the only way the company will return to rapid growth is if a study (or studies) can conclusively prove the superiority and cost-effectiveness of its da Vinci systems to other traditional surgical techniques.

We have a price estimate of $456 for Intuitive Surgical, implying a premium of about 25% to the current market price.

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology

1. Press Release, Intuitive Surgical, April 29 2014 [↩]