Intuitive Surgical's Da Vinci Prostatectomy Bolus 'Has Legs,' Barclays Says

Barclays reiterated its Overweight rating on Intuitive Surgical, Inc. ISRG after its urologist survey showed that da Vinci Prostatectomy (dVP) bolus has legs and the numbers are achievable.

"Based on physician feedback and our math, we think this bolus will last at least through 2016 and potentially a few more years and should support the consensus and our assumption of 6 percent US urology growth in 2016," analyst Matthew Taylor wrote in a note.

The analyst noted that if dVP continued growing from 2011 levels in a straight line at 3 percent, "there would have been about 68,000 more done through year end 2015 in the US."

Related Link: Intuitive Surgical Reports New Employee Option Grants For June 2016

Barclays' physician survey showed "there continues to be a bolus of patients in the US requiring treatment for prostate cancer that began showing up in 2014 and drove dVP growth in 2015–16 as well."

Although the recommendations from US Preventive Services Task Force (USPSTF) in 2012 led to an initial decline in surgeries due to a drop in screenings, Taylor noted that many of these patients' diseases have advanced to a stage where they need surgery.

Meanwhile, the consensus currently models revenue of $2.616 billion in 2016 (+10 percent), including $642 million in the second quarter (+10 percent). By segment, this includes 13.6 percent y/y procedure growth, near the top end of the guidance range, system revenue of $744 million, up 3.1 percent, and service revenue of $512 million, up 10 percent.

"We think these numbers are doable and are slightly higher on procedures and system revenue," Taylor highlighted.