Intuitive Surgical executives think more international expansion and continued innovation of its new da Vinci Xi system will help the Sunnyvale, CA-based surgical robots company move past a mixed and volatile 2014.
For the final three months of 2014, Intuitive saw profits of $147 million, or $3.94 per share. Profits were up 8% from the previous quarter's $123.7 million, or $3.35 per share. But year-over-year, they were down 6% to $419 million. (They did, however, beat analysts' expectations, according to media reports.)
Good news included sales of the da Vinci Xi system, which rose to 97 for the fourth quarter, up from 59 in the third quarter and 50 in the second quarter, when Intuitive launched the system. Intuitive has described the Xi as a "technological leap forward in replacing large-incision abdominal surgeries (open surgery) with a minimally invasive approach."
|Intuitive Surgical debuted a new surgical robot in 2014.|
Intuitive even received permission to sell the da Vinci Xi in South Korea during the fourth quarter, and launched its wristed Single Site needle driver as well. Procedure volume increased by 13% over Q3.
The fourth quarter saw revenue grow to $605 million, compared with the $550 million in the previous three months. It was $576 million during the fourth quarter of 2013.
The Xi system drew interest from multiple specialties, including colorectal surgeons, urologists, thoracic surgeons, and gynecologic oncologists, Intuitive president and CEO Gary Guthart told analysts in a conference call transcribed by Seeking Alpha.
The fourth quarter, though, also saw some rough spots. Intuitive issued a recall of its da Vinci Xi Si Stapler due to three intraoperative instrument failures, Guthart said. The company identified the causes, and the stapler resumed production in January 2015, he said.
Overall, 2014 was a years of ups and downs for Intuitive.
News of the FDA's approval the company's latest robotic-assisted minimally invasive surgery system caused Intuitive's stock to rise nearly 13% in value on April 1, 2014, to nearly $494 per share. It reached nearly $541 per share on April 3.
But then Intuitive Surgical stock fell 11.5% in value, to $374 per share, on April 23, after a disappointing quarterly earnings report and the FDA raising cancer concerns over how robotic hysterectomies are performed.
Its top executives had already been engaged in damage control in the discourse regarding the safety of Da Vinci robotic surgery.
By early May, Intuitive was announcing an acceleration of its $1 billion share buyback program to prop up its dwindling stock price. The move marked the beginning of a long climb back. It is now trading around $517 per share.
The company keeps moving ahead, however. In 2015, it plans to submit a 510(k) for software that allows for coordinated table motion with the Xi and for a Xi-compatible version of its Single Site instrument, Guthart told investors.
"Looking to 2015, our priorities are as follows," he said. "First, we will focus on the expanded use of da Vinci in general surgery, particularly colorectal surgery and hernia repair. Second, we'll work to complete our launch and new product introduction of da Vinci Xi in key markets globally. Third, we will develop our organizational capabilities and markets in Europe and Asia. And finally, we plan to build Xi compatible Da Vinci SP prototypes and initiate customer valuations."
Calvin Darling, senior director of finance for Intuitive, said the company anticipates procedure growth of 7% to 10% during 2015.
|Refresh your medical device industry knowledge at MD&M West, in Anaheim, CA, February 10-12, 2015.|
Nancy Crotti is a contributor to Qmed and MPMN.
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