Despite concerns about ongoing challenges in the healthcare sector and potential declines in the number of patients undergoing certain procedures, Intuitive Surgical had a year to remember.
In tandem with continued increases in the number of its robotic surgery systems installed around the world, the company saw the number of procedures performed with its flagship da Vinci technology soar, too: up 26% year-over-year in the first quarter of 2023, 22% in the second, 19% in the third and, according to preliminary results published this week, 21% in the fourth quarter.
Altogether, that comes out to an average of 22% growth for the whole year compared to 2022. That’s well above the forecasts Intuitive set at the start of 2023—when it predicted a much more modest growth rate, landing somewhere between 12% and 16%—and is also at the high end of the updated range forecasted after the company’s last quarterly update.
With an estimated revenue increase of 14% for the full year to boot, Intuitive saw its stock price surge to its highest levels in six months, surpassing the $350 mark Wednesday morning after jumping an initial 5% after the preliminary results were published Tuesday afternoon.
During a presentation Wednesday at the J.P. Morgan Healthcare Conference in San Francisco, Intuitive CEO Gary Guthart, Ph.D., discussed both the challenges and the successes that the company encountered in 2023.
Among the year’s obstacles were “a significant amount of environmental uncertainty in China,” as well as manufacturing challenges that came with getting some of Intuitive’s new offerings off the ground—which Guthart categorized as “a little bit par for the course with complex technologies.” Meanwhile, the number of bariatric surgeries performed slowed progressively throughout the year—and continues to “decelerate,” per the CEO—as many patients turned instead to mega-popular GLP-1 drugs as an alternative weight-loss option.
Finally, installations of Intuitive’s Ion platform for robotic-assisted flexible bronchoscopy were somewhat “throttled” as the company was unable to churn out the catheters used with the system as quickly as it would’ve liked, and therefore slowed down Ion installations to avoid “a situation where we had more systems out than we had catheters to supply,” per Guthart.
“We are the constraint,” he said, but added, “We’re starting to work through that and come out the other side.”
But Intuitive was largely able to skirt those challenges, as Guthart reported that placements and utilization of Intuitive’s robots both in the U.S. and internationally was strong, with general surgery procedures in particular growing “very nicely” in the U.S., and overall usage in Europe and Japan especially “heartening.”
The global installed base of Intuitive’s robotic systems grew 14% for the year, per the CEO, who added, “So, 22% procedure growth, 14% installed base growth—just do the quick math, and you’re seeing utilization growth go up. That is a fantastic thing.”
But even after easily beating its start-of-year predictions both last year and the year before—when it clocked 18% year-over-year growth in the da Vinci procedure count for 2022 against an original forecast of 11% to 15%—Intuitive is once again taking a conservative approach to its 2024 outlook. For now, it’s expecting to see worldwide procedures increase by somewhere between 13% and 16% for all of 2024.
During the JPM presentation, Brian King, the company’s treasurer and head of investor relations, said the low end of that range allows for lasting backlogs among healthcare providers, continued modest declines in bariatric procedure growth and delayed installations and slowed growth in China due to anti-corruption efforts. The high end of the range, in contrast, assumes more muted effects of that trio of issues.
As for how Intuitive will achieve that predicted growth, Guthart said that in 2024, “We are focused on innovation, the expansion of indications and launches of our platforms by region.” He added, “There are several, they are interesting, and we want to execute them well.”
Though Guthart offered only a “no comment” when asked during the presentation whether Intuitive will be putting out a new multi-port robot in 2024, that answer was perhaps more promising than the flat-out denial he gave when asked the same question at last year’s conference.
The CEO did acknowledge, however, that Intuitive is not only already working on its next robotic surgery system, but also “the next one behind that, too.”
“We are always working on things that we think are powerful,” he said, but noted that Intuitive will bring those new technologies to the market only once three conditions are met: if it’s been proven to be “important enough to matter in a meaningful way,” the necessary supply chains are in place and global regulators are on board.
“Once those conditions are met, then we come do it. And when we do it, we talk to our customers first and then we come talk to you—not the other way around,” Guthart told the investors and analysts assembled for the presentation.