Intuitive's numbers - going up

"Intuitive Surgical saw $736 million in profits and $1.40 billion in sales in 2016, up from $589 million in profits and $1.20 billion in sales in 2015. However, company officials cautioned during their earnings call with analysts that they expect da Vinci system procedures to grow 9% to 12% this year, down from the 15% growth seen in 2016.

Intuitive Surgical officials also expect increased investment in the company’s next generation of surgical robotics products, but the pipeline of future products isn’t expected to produce much revenue this year. For example, Intuitive Surgical CEO Gary Guthart reported compelling early clinical experience with the company’s flexible robotics platform to diagnose lung cancer, but no revenue is expected this year from the system.

Along with the earnings numbers, Intuitive Surgical also announced an accelerated share repurchase program with Goldman, Sachs & Co. The company will repurchase $2 billion of its common stock.

 Intuitive earned $204 million, or $5.13 per share, off $386 million in sales during the three months ended Dec. 31, 2016."

"Our current da Vinci Sp system met its development goals in the fourth quarter and we initiated its first clinical feasibility study. As we've discussed on prior calls, we plan first markets to include head and neck surgery, urology and colorectal surgery. Sp is a platform technology that allows high dexterity access with great 3D vision to confine surgical spaces. Early surgeon response to Sp in the trials has been very positive. We anticipate initiating a Sp IDE trial in the United States for Transoral Robotic Surgery as well as submitting a 510-K for urologic applications both in the first half of 2017.

We're also making good progress on our flexible robotics platform. First targeted to address the acute need and diagnosis of lung cancer, one of the most commonly diagnosed forms of cancer in the world and for which early detection is important. The technology underpinning the system is based on computer controlled catheters, advanced image processing and sophisticated sensing. As we mentioned previously, this system is in its early stages of our human clinical experience. This experience has been compelling and our design and operations teams are working hard to incorporate feedback and complete its production design and supply chain optimization. Given the long-term opportunity for this system in lung cancer detection and other potential applications, we've been growing our team in this space. We do not anticipate revenue from this product in 2017. Imaging and intelligent algorithms offer significant opportunities to enhance surgeon capabilities. Our investments include hardware and image processing updates to our Xi platform to enhance imaging performance and reduce costs. We're also investing in contrast agents for specific anatomical structures recently announcing our plan to commence Phase 1 trials for the ureter imaging agent compatible with our Firefly imaging hardware and software.

Imaging and intelligent algorithms work also includes processing and presentation of pre-operative imaging and other offline data for use during surgery, sometimes called augmented reality or mixed reality technology. We've been working on these technologies for several years and more recently with our partner InTouch Health. Our next step in mixed reality technology is working in prototype form in laboratory settings today and will move towards first human use in 2018. Bringing new platforms to the market represents a significant investment and we expect to invest up to $80 million more in 2017 than our typical operating expense run rate growth. These investments are focused on clinical and economic data, particularly in Europe and Asia expansion of our operations capability to include da Vinci Sp, investments in our diagnostics platform and continued investments in imaging. Calvin will take you through the spending implications later in the call. In closing, entering 2017, we are focused on the following. First, continued adoption of da Vinci in general surgery. Second, continued development of European markets and access to customers in Asia. Third, advancing our new platforms; imaging, advanced instruments, da Vinci Sp and diagnostic platform progress. And finally support for additional clinical and economic validation by global region."

"Intuitive recently signed a partnership with Dextera to co-develop a surgical stapler intended for use with a surgical robot. A joint venture with Fosun Pharmaceutical aims to develop robotic-assisted medical devices, contributing up to $100 million to the partnership."

Source: Mass Device, Seeking Alpha