Dive Brief:
- Intuitive Surgical, one of the first medtech companies last year to link new weight loss drugs to softer procedure volumes, said it expects growth in bariatric surgeries using its robots to continue to slow in the near term.
- But the robotic surgery leader is also seeing strong system placements and growth in general surgeries, CEO Gary Guthart told investors at the J.P. Morgan Healthcare Conference in San Francisco. The company preannounced that overall procedures assisted by its da Vinci robot grew 21% in the fourth quarter, above analysts’ expectations. The momentum prompted Intuitive to forecast an increase of about 13% to 16% in da Vinci procedures worldwide in 2024.
- “We are encouraged to see strong volume growth despite concerns around bariatric procedures during [second-half] '23,” RBC Capital Markets analyst Shagun Singh said in a note to clients Wednesday. Intuitive’s shares closed up 10.25% on Wednesday at $364.45 on the Nasdaq.
Dive Insight:
Investors’ fears of a drop in demand for medical device treatments ranging from insulin pumps and sleep apnea machines to weight loss surgery as Americans embrace GLP-1 medicines to shed pounds caused a sell-off in medtech stocks last year.
Intuitive reported seeing an impact on bariatric surgery from patients trying the new drugs beginning early in the year, and company executives on Wednesday said further slowing of demand is factored into its 2024 procedure growth outlook.
“We still continue to see a deceleration of bariatric surgery with the rise of GLP-1s,” Guthart said.
The robot maker is also anticipating further clearing of the procedure backlog that built up during the COVID-19 pandemic, as well as more delays in China’s order process in the year ahead due to ongoing anti-corruption efforts in the country, company executives said.
Intuitive reduced installations of its Ion bronchoscopy platform for lung biopsy procedures due to supply constraints in 2023, Guthart said. “We didn't want to get in a situation where we had more systems out than we had catheters to supply, so that throttled us a little bit in the year. We're starting to work through that and come out the other side,” the CEO said.
In 2023, Intuitive’s da Vinci procedure growth was 22%, as almost 2.29 million surgeries were performed with the systems.
The company placed 415 da Vinci robots with customers in the fourth quarter alone, up 12% from the same period a year ago. Preliminary fourth-quarter revenue rose 17% to about $1.93 billion.
William Blair analyst Brandon Vazquez said the preliminary fourth-quarter results beat expectations in nearly all categories. “The bottom line is that Intuitive is clearly heading into 2024 with strong momentum,” Vazquez said in a report to clients.
At the J.P. Morgan event, Guthart declined to say whether Intuitive plans to roll out a next-generation multi-port robot in the year ahead, a topic of interest among investors.
“The fact that management didn't comment leaves open the possibility for a launch this year,” J.P. Morgan analyst Robbie Marcus said in a research note after the presentation, pointing out that the executives made clear last year a new robot would not come in 2023.
