Intuitive Surgical has spent the last several quarters digging its way out of the hole created when the COVID-19 pandemic put the kibosh on many routine surgeries—but, by now, it has easily cleared that decline, and then some.
Case in point: In the third quarter of this year, Intuitive saw procedures performed with its flagship da Vinci robotic surgery system surge to new heights, according to a Thursday afternoon earnings report, climbing 19% higher than the same period last year and 17% higher than the third quarter of 2019, before the pandemic setbacks had set in.
The company also placed a handful more da Vinci systems during the quarter than it did a year prior, bringing its total installed base to a total of 8,285 systems as of the end of September—representing an addition of nearly 1,000 of the surgical robots over the course of the last year.
And that increase in the use of its da Vinci systems, of course, translated into a healthy increase in Intuitive’s finances. The quarter’s revenues clocked in at $1.74 billion, a jump of 12% compared to the $1.56 billion Intuitive reported a year ago.
That growth builds on the year’s previous increases in da Vinci installations and utilization, with procedures growing 26% year over year in the first quarter and 22% in the second. With yet another quarter of solid double-digit growth under its belt, Intuitive has slightly amped up its full-year forecasts: The company is now expecting 2023’s da Vinci procedure tally to best 2022’s by between 21% and 22%, compared to previous ranges that set the low end at 20% growth, according to Brian King, Intuitive’s treasurer and head of investor relations.
“The low end of the range reflects uncertainty around the duration of elevated procedure volumes with patients redetermining healthcare, a continued slowing of bariatric growth rates in the U.S., and macroeconomic challenges that could impact hospitals and patient spending,” King said on a call with investors Thursday.
“At the high end of the range, we assume macroeconomic challenges do not have a significant impact on hospital procedure volumes, and bariatric growth rates in the U.S. continue at the rate we experienced in Q3,” he continued, noting that the projected growth range “does not reflect significant material supply chain disruptions or hospital capacity constraints.”
As King hinted, bariatric surgery rates have recently become something of a sticking point for Intuitive, as the growing popularity of blockbuster GLP-1 drugs for weight loss has taken some market share from the surgical option.
Bariatric surgeries currently make up between 4% and 5% of Intuitive’s total global procedures, Chief Financial Officer Jamie Samath said on the investor call, and, as of the close of the third quarter, “we continue to see double-digit growth, albeit at a modestly lower growth rate as compared to Q2,” Samath said.
Still, Intuitive remains optimistic about its da Vinci robot’s ability to outlast the popular injections, according to Myriam Curet, M.D., the company’s chief medical officer, who suggested that bariatric surgeries will actually increase in the long term, after a slight delay from GLP-1 interest.
“I think, in the short term, we will see patients who are considering or are in the pipeline for bariatric surgery going to try the drugs. However, given compliance issues, costs, side effects, we expect that many of them will not stay on the drugs for longer than a year or two and, at that time, will consider bariatric surgery,” Curet told investors.
As for GLP-1 drugs’ impact on the da Vinci robot’s reach beyond weight loss surgeries, CEO Gary Guthart suggested that while they may have some impact outside of bariatrics, it’ll likely be “modest.”
In most diseases treated by Intuitive’s technology, obesity and diabetes are “not the dominant risk factor,” Guthart said on the call, adding, “We have a very large unpenetrated [total addressable market]. I think we’re still in the early innings of what we’re trying to work on. So, if these drugs are highly effective at avoiding other types of diseases, we will cheer. I still think we have a lot of upside opportunity to pursue.”