Intuitive Surgical Inc., maker of the da Vinci Surgical System, reported better-than-expected third quarter performance behind expanded use of the da Vinci platform into general surgery in both the United States and international markets.
Shares of the company increased by 7.8 percent in after-hours trading after it announced third-quarter earnings, according to Zacks. Revenues surged 10.4 percent year-over-year to $589.7 million on high procedural volume across most geographic regions, including the United States, Europe, China, Japan, and Korea. Broken down, U.S. procedures increased 12 percent, while international procedures rose 28 percent.
Global da Vinci procedures expanded 15 percent year-over-year to 162,000, driven by growing use of the robotic system in hernia repair, colon and rectal resections, prostatectomy, and hysterectomy. Per Zacks, da Vinci Xi system sales accounted for 77 percent of total systems sales, up from 53 percent in the same quarter last year.
Instruments and Accessories segment revenues expanded 9.3 percent to $298.1 million in the third quarter, yet revenue per procedure, at approximately $1,840, was considered flat compared to the same period last year, per Zacks.
According to Forbes, Intuitive Surgical's new Endowrist Staplers for the company's Xi system offering could lift revenues of the manufacturer's Instruments and Accessories segment, which currently accounts for 45 percent of the total valuation of the company. A forecast by Forbes put revenue per procedure at $328,000 in 2014, increasing to $351,000 by 2022.
Intuitive Surgical is pushing for the use of the da Vinci surgical system beyond urology and gynecology procedures while introducing new device technologies. In particular, the company says it has launched integrated table motion for the da Vinci Xi platform in Europe this October, and has submitted U.S. FDA 510(k) applications for the table motion technology for surgical retraction, single-site instrument kit, and a 30 mm stapler for thoracic surgery, according to an earnings call transcript from Seeking Alpha.
Gary Guthart, president and CEO, Intuitive Surgical, said the company is strengthening the computational capabilities in both real-time and program-level applications of the da Vinci robotic surgical platform.
“We anticipate increased clinical evaluations of da Vinci Sp in 2016 particularly in transoral and transabdominal applications. Lastly, da Vinci systems are sophisticated network computing systems. The availability of these computational resources allows for both real time analytics that can provide surgeons relevant information for example the smart plant feature implemented in our stapler as well as anonymized utilization data that administration can use to help optimize robotic surgery programs,” Guthart told analysts, according to the transcript.
"For 2015 we remain focused on expanding the application of da Vinci and general surgery, particularly colorectal surgery and hernia repair filling out our product line for da Vinci Xi and launching in key markets globally, developing our organizational capabilities in markets in Europe and Asia, advancing our technologies to improve surgery and lowering our direct product cost," he concluded.