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Sales of da Vinci surgical robots continued to decline in the first quarter of this year

Da Vinci surgical robot sales slide; revenue, earnings drop in Q1


By Jaimy Lee
Posted: April 22, 2014 - 7:00 pm ET
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Sales of da Vinci surgical robots continued to decline in the first quarter of this year, in part due to fewer gynecologic procedures being performed and overall lower procedure growth in the U.S., the company noted in announcing its first-quarter earnings Tuesday.

Intuitive Surgical, the Sunnyvale, Calif.-based manufacturer of the da Vinci Surgical System, reported that revenue fell 24% to $465 million in the first quarter of 2014, compared with $611 million in the same quarter last year. The company sold 45 da Vinci systems in the U.S. in the first three months of the year, down about 61% compared with 115 in the same period in 2013.

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“It's clear there are some changing dynamics in the U.S. market, in part around procedures that are elective,” said Gary Guthart, president and CEO of Intuitive Surgical.

Net income fell to $44 million in the first quarter of this year, compared with $189 million in the same quarter last year. This includes a pre-tax charge of $67 million related to an expected product liability settlement over claims that patients suffered complications from da Vinci tools.

Insurers, medical societies and some healthcare providers have increasingly started to question the costs and outcomes associated with robotic surgery, notably around the use of the da Vinci for routine hysterectomies. A year ago, the American College of Obstetricians and Gynecologists issued a statement criticizing marketing hype around da Vinci surgical robots and said there is no good data proving that robotic surgery has better outcomes for routine hysterectomies than other types of less expensive, minimally invasive procedures.

The growth of gynecologic procedures, which make up the largest portion of da Vinci procedures, has slowed in recent years. Intuitive executives attributed the declines in procedure volume for the first quarter of 2014 to payer pushback against the use of robotic surgery for certain procedures; hospitals pulling back on capital spending; slowdowns in elective procedures; and anticipation of the new system that the company launched earlier this month.

The number of hysterectomies performed with the da Vinci system are expected to continue to decline in 2014, executives said during a call with investors. They also reported that they expect to sell fewer systems this year but noted that general surgeries performed in the U.S. that utilize the da Vinci are rising.

Global sales of da Vinci systems fell to $106 million in the first quarter of 2014, compared with $256 million in the first quarter of 2013. The 58.6% decrease was attributed to lower sales in the U.S. and a revenue deferral of $24 million for the company's customer trade-out program for its new system.

Follow Jaimy Lee on Twitter: @MHjlee


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