Intuitive Surgical Investors Are Playing a High-Stakes Game of Telephone

Is Intuitive Surgical gearing up to launch a new da Vinci robot in 2024? CEO Gary Guthart gave a "no comment" response to the question at the J.P. Morgan Healthcare Conference, which I took to mean, “don’t count on it.”

But the investor community seems to have heard something different because the company’s shares have shot up by over 13% since then.

Compared to Guthart’s response to the same question last year, which was a flat “no,” I suppose his “no comment” this year might be considered a positive shift. But I think investors simply heard what they wanted and engaged in a high-stakes game of Telephone.

"With all the excitement from last week coming out of [Intuitive Surgical's] presentation to investors, it seems like investors are gearing up for a next generation da Vinci system to be launched in FY24," Ryan Zimmerman, a medtech analyst at BTIG, wrote in a report Thursday after the market closed.

Zimmerman and team found what he thinks may be another indication of a next-generation robot from Intuitive.

“We wanted to call out a small breadcrumb that we discovered this evening which further suggests that the next-generation system may be imminent," he wrote.

The analyst goes on to describe a slight wording change to a study for robotic-assisted da Vinci Xi prophylactic nipple-sparing mastectomy. In the revision, the word Xi is dropped from the official study title and the word "system" becomes "systems."

The study timeline was also pushed back for primary completion from Dec. 30, 2023, to April 30, 2025.

"Why would clinicians need to evaluate the safety and effectiveness of multiple [da Vinci] systems unless they were poised to be working with a newer version in a trial?" Zimmerman writes.

Speculation on Wall Street is that Intuitive will unveil the new system in April at the SAGES conference (the Society of American Gastrointestinal and Endoscopic Surgeons). I think an April unveiling is far more likely than an actual 2024 launch of a new da Vinci system, based on Guthart’s other comments at the J.P. Morgan Healthcare Conference earlier this month.

Carefully sidestepping any direct commentary on a new robot, Guthart agreed to talk about generational changeover in general terms.

"We are always working on things that we think are powerful, and customer comes in and sits down with us and says, 'are you working on something new?' And the answer is, ‘yes, of course’. That's like asking Mercedes, are they working on the next E-Class. I think the answer is yes," Guthart said.

He reminded attendees that development timelines in surgical robotics are "extremely long." So long, in fact, that Intuitive is not only working on a next-generation system, but the company is also already working on the next one behind that.

But don't expect the surgical robotics pioneer to launch a new robot just because it seems like it's time to. Guthart was clear that the company would not rush a new system to market without making a meaningful change to the technology.

Secondly, he said, the company must be able to get the supply chains right.

And finally, the company needs the global regulators to come along with it on such a journey to understand the new submission, review it, challenge it, and eventually accept it.

"When those conditions are met, then we come do it," Guthart said. "And when we do that, we talk to our customers first, and then we come talk to you. Not the other way around."

So, I ask my Magic 8 ball, will Intuitive Surgical launch a new multiport robotic surgery system in 2024? “Outlook not so good.”