Intuitive Surgical dashed investors' hopes in January with the news that Intuitive would not be launching a next-generation multiport system in 2023. All appears to be forgiven now, however, as the surgical robotics pioneer has new urological indications cleared by FDA on top of strong procedure growth in the first quarter.
"We think investors are seemingly shrugging off concerns on system estimates being too high and even concerns on when [Intuitive Surgical] is launching a next-gen [da Vinci]," BTIG's Ryan Zimmerman wrote in a recent report. "...There is a lot for investors to sink their teeth into."
The Sunnyvale, CA-based company now has FDA clearance to market the da Vinci SP for simple prostatectomy as a representative procedure, which expands the urologic surgical procedures cleared by FDA.
Simple prostatectomy is a surgical procedure often used in patients with benign prostatic hyperplasia (BPH) or enlarged prostate. In this procedure, the surgeon removes the part of an enlarged prostate that is blocking the flow of urine.
In the same action, Intuitive Surgical received clearance for transvesical approach to simple and radical prostatectomy using the da Vinci SP. In radical prostatectomy, the surgeon removes the entire prostate gland, most often for patients who have been diagnosed with prostate cancer.
“The addition of simple prostatectomy and the transvesical approach to prostatectomy to the da Vinci SP clearances expands the existing urology indication for SP,” said Chief Medical Officer Myriam Curet, MD. “There is a growing body of clinical evidence on the use of the SP system, and we look forward to continuing our efforts to safely advance minimally invasive surgery."
The da Vinci SP system provides surgeons with robotic-assisted technology designed for deep and narrow access to tissue in the body. The ability to enter the body through a single, small incision or through a natural orifice can provide a minimally invasive experience for complex procedures.
Intuitive Surgical also won a CE mark recently for its Ion system.
Intuitive Surgical is crushing it with procedure growth
The surgical robotics company delivered surprising procedure growth in the first quarter (26% year-over-year).
"We saw surprising strength in the quarter led by general surgery in the United States and procedure growth beyond urology outside the United States. On a procedure basis, cholecystectomy, bariatric surgery and hernia repair led the way," CEO Gary Guthart said during the company's first-quarter earnings call, according to Seeking Alpha transcripts.
Intuitive Surgical is seeing several business metrics returning to pre-COVID levels, or close to it.
"The return of patients to healthcare providers and diagnostic pipelines post pandemic continues, with evidence of both an increased patient census and some diagnostic pipelines running above pre-pandemic levels after several years of lag," Guthart said. "We also see a commitment by our hospital customers to work through staffing constraints to maintain surgical volume."
He also said Intuitive Surgical is gaining share from open surgery and laparoscopy in several countries, and that strong procedure growth is supporting a healthy capital placement quarter. Worldwide, Intuitive placed 312 da Vinci systems and 55 Ion systems in the first quarter compared with 311 da Vinci systems and 34 Ion systems in the same period of 2022.
CFO Jamie Samath pointed to four drivers of the procedure growth.
"We do think there's a little bit of a soft comp on the base period given some impacts from COVID in Q1 of '22," Samath said. "You have three other drivers. We think there is some backlog effect from patients generally returning to more normalized healthcare routines, given the effect of the pandemic over several years. Included within that is diagnostic pipelines. We see the last year or so of diagnostic pipelines being above pre-COVID levels. Second effect, there is strength in the U.S. in general surgery, particularly benign general surgery. And in our OUS markets, the non-urology side of our procedure categories are growing nicely."
Hospital staffing also appears to have improved compared to the previous quarter, Samath said, although it is not yet where it was before the pandemic.
"We don't have good estimates as to where the kind of various outperformances between those categories that we described. Market data lags there," Samath said. "Certainly, there is some market share gains, particularly in benign general surgery in the U.S."
Guthart laid out Intuitive Surgical's 2023 priorities during the earnings call.
"First, we are focused increased adoption for our priority procedures in countries through outstanding training, commercial, and market access execution. Second, we are pursuing expanded indications and launches for our new platforms. Third, we are focused on excellence and continuity of supply, product quality, and services provision, as we emerge from pandemic stresses," Guthart said. "And finally, we are pursuing increased productivity in our functions that benefit from scale. You can see from our first quarter results the relevance of these priorities and our urgency in pursuing them."