Intuitive closes 2019 by topping Q4 expectations

Dive Brief: Intuitive has closed out 2019 on a high, posting preliminary fourth quarter results […]

Dive Brief:

  • Intuitive has closed out 2019 on a high, posting preliminary fourth quarter results that beat Wall Street’s expectations.​ In a statement Thursday, Intuitive reported a roughly 19% rise in worldwide procedures with its da Vinci robot, which helped it increase sales by 22%.
  • The upbeat end to 2019 comes as Intuitive braces for the intensification of competition from a clutch of rivals including CMR Surgical, Johnson & Johnson and Medtronic.
  • Intuitive is slated to present at the J.P. Morgan Healthcare Conference on Jan. 14.

Dive Insight:

Intuitive’s near-monopolistic hold on the robotic surgery market is continuing to translate into sales growth. In the fourth quarter, sales increased 22% to about $1.28 billion, exceeding the consensus of analysts tracked by Stifel.
The performance was underpinned by double-digit growth in the number of procedures performed using Intuitive robots. Procedures grew 19% in the fourth quarter, easing past the 16% predicted by the Stifel analysts and their peers. With shipments of da Vinci devices meeting expectations as the average selling price rose 10%, Intuitive’s system sales also topped expectations.
System revenues continued to skew more heavily toward leases, as Intuitive predicted. In the most recent results, leases accounted for 126 of 336, or about 38%, of the devices shipped, up from 33% in the third quarter.
The question now is whether Intuitive can maintain its performance, particularly as competition for the robotic surgery market intensifies. Intuitive shared an early look at its expectations for 2020 in its preliminary results, raising questions about whether current analyst estimates are too high.
“First-take 2020 procedure growth guidance at 13%-16% captures current 16% consensus. This outlooks suggests recent positive procedure trends continue (general surgery) while more-mature categories moderate. Still, importantly, we note [Intuitive] first-time forward-year procedure growth guidance has proven conservative in the past,” the Stifel analysts wrote in a note to investors Thursday.
The Stifel analysts think their forecast 16.7% procedure growth may be too high, particularly in light of the fact Intuitive beat expectations in the fourth quarter, thereby setting up a tougher year-on-year comparison for 2020.
Intuitive may also face new competition by the back end of 2020. FDA is reviewing a filing for CMR’s robotic surgery device. Medtronic is aiming to start placing its device in the U.S. in 2021. And J&J, which already has an approved robot through its Auris Health acquisition, is set to provide an update soon on the now wholly owned assets developed by Verb Surgical.
The size of the companies now targeting the robotic surgery market suggests Intuitive will face more competition than in the past. But recent history shows getting a device to market is just the first step — TransEnterix received FDA clearance for its Senhance System in 2017 but went most of 2019 without making a sale in the U.S., only placing a product with a customer in the country during the fourth quarter.

Original Article: (