JMP Securities: Survey With Surgeons Highlight Challenges for Intuitive Surgical

On February 19, Doctor. J.T. Haresco, III, analyst at JMP Securities wrote a note to clients titled “General Surgery Survey Highlights Challenges Ahead.” The Doctor conducted a survey of 50 surgeons who had at least two years of using

robotic surgery devices. The purpose of the survey was to “explore the current and potential penetration of robotic surgery in a variety of indications, as well as the penetration of more traditional open and laparoscopic surgery.” Doctor Haresco revealed two main findings from his survey which may support a bearish case against the company.

Doctor Haresco asked respondents to determine system utilization assuming that the da Vinci robot at their institution can be used twice a day Monday to Friday. Utilization rates remain low, as 64 percent of respondents indicated that robotic usages are at greater than 50 percent capacity, with only 12 percent of respondents indicating the robotic machines are used at full capacity. “This may explain why 64 percent of respondents believe that their hospitals will not be acquiring another robot.”

According to the survey, robotic surgical procedures take longer than standard procedures. In some cases, such as in thyroidectomy, the use of a robot results in a longer operation time. Doctor Haresco wrote: “Regardless of the level of experience of the surgeon, or the indication, robotic surgery (standard robotic or single-site) offers no improvement in the length of stay over a laparoscopic technique. Additionally, robotic surgery takes longer than both laparoscopic and open surgery in every indication.”

Doctor Haresco concluded by stating “although these findings add to our knowledge of surgeons' experiences and perspectives about the use of the da Vinci Surgical systems, respondents' perspectives may not represent the perspectives of all device users. Therefore, these findings represent only one piece of information.” Shares are Market Underperform with a price target of $320.