Robotic surgery to see new entrants Medtronic and J&J/Google, but Intuitive still miles ahead

The success of Intuitive Surgical's ($ISRG) da Vinci robot for minimally invasive surgery is creating a growing list of "fast followers," but the company believes it has created enough "moats" to fend them off for quite some time, according to Leerink equity analyst Richard Newitter.

The da Vinci surgical system--Courtesy of Intuitive Surgical

As such, the followers haven't been that fast, with Medtronic ($MDT) and partners Johnson & Johnson ($JNJ) and Google ($GOOG) still looking to launch their devices following FDA clearance in 2000. The lag time reflects Intuitive's moat and the gradual evolution of the robotic surgery market.

Stryker's ($SYK) Mako robot was recently cleared by the FDA for total knee reconstruction following the $1.65 billion acquisition of Mako Surgical in 2013. But the da Vinci doesn't compete in the orthopedics arena, so the other robot doesn't pose a threat.

The new entrants will compete with Intuitive in general surgery arenas, which include hernia repair and colorectal surgery.

Newitter wrote that Intuitive CEO Gary Guthart believes the company is well protected from the competition because of IP and "the ecosystem arounds its platform," which includes training, service support, a full kit of associated instruments and an integrated fluorescence imaging capability dubbed Firefly.

In addition, he wrote that "years of product refinements have given ISRG a substantial lead in advancing MIS surgery through computer assistance, and all this will make it challenging for anyone to effect a wholesale conversion of the robotics market," adding "ISRG has additional advancements on deck to enhance its solutions' addressable market--including a new robot on the horizon (Sp), upgrades to existing systems (rotating bed) on the way, and other items in the pipeline."

Apparently, "management believes it has a generally good sense of what competitive products might look like," for both J&J and Medtronic and have offered some hints about their approach to the robotic surgery.

J&J's partnership with Google points to a large role for Big Data in the company's plan, company officials said during a prior interview with FierceMedicalDevices.

"Our solution not only aims to give surgeons a better procedural experience by improving comfort and patient proximity but deliver a superior surgical experience through greater access and precision with the ability to make more informed decisions through the entire procedure. We can see a future in which the surgeon is no longer isolated in the OR, but through our system, we'll be able to connect to critical data, imaging and diagnostic information; information that will help the surgeon make the best, most accurate decisions as and when they're needed," said Gary Pruden, J&J worldwide chairman of global surgery, during the company's most recent earnings call.

"We think that there are opportunities to have a much smaller footprint in terms of a technology, a lower cost to serve in terms of disposables as well as capital that we think can play across a broader range of surgical procedures in a cost-effective way," he added. In addition, the company has said the next frontier for minimally invasive robotic-enabled surgery is in difficult surgeries, such as those involving cancer.

Meanwhile, Medtronic said it has gotten a boost in Robotics from its $50 billion acquisition of Covidien, which Medtronic CFO Gary Lee Ellis said "was farther ahead even than ourselves in that regard." The plan involves tying Covidien's interventional surgical devices to robotic equipment that's under development, he said during an earnings call earlier this year, adding "we're preparing to launch, probably, again, this spring, early summer next year."

Mako Rio robot-assisted surgery system

Meanwhile J&J's Pruden said its more ambitious-sounding initiative will achieve commercialization in the next couple of years.

During a July public hearing to discuss optimal regulation of robotic surgery systems, the FDA said robotic surgery devices contain a console or control center by which surgical instruments are controlled using the guidance of a 3-D monitor. An endoscopic camera is also controlled from the monitor. In addition, robotic surgery devices include a bedside cart consisting of hinged mechanical arms, the camera and the surgical instruments that the surgeon controls from the console.

Technically, Stryker's Mako does not fall under that definition because it is a navigation system, although the FDA said much of the information discussed at the meeting applies to that device as well.

The FDA held the meeting in anticipation of new entrants to the marketplace. Also mentioned the Leerink analyst report are Morrisville, NC's TransEnterix ($TRXC), maker of the CE-marked ALF-X robot and RedWood City, CA's Auris Surgical Robotics.

According to a market research report by WinterGreen Research, the surgical robot device market was worth $3.2 billion in 2014, and projected to rise to $20 billion by 2021.

-- Varun Saxena (email | Twitter)