A New Market for Intuitive Surgical?

Intuitive Surgical (Nasdaq: ISRG  ) operates under a variation of the razor-and-blades business model: Its first focus is getting customers to buy the razor, then it generates recurring revenue by selling them the required blades. In this case, the "razor" is Intuitive's da Vinci surgical system, and the "blades" are the instruments and accessories that are designed to perform various surgical procedures. Now, Intuitive has just announced a new blade: It recently received clearance from the Food and Drug Administration for a new instrument for surgical stapling. In this video, Motley Fool health care analyst Brenton Flynn tells us why this is a great complement to the company's portfolio of products, how this will impact the company, and who some of its competitors are from here forward.

Intuitive Surgical is known as a disruptive innovator, and this new release for the company is no exception. A true renegade in the health care industry, the company rebelled against the status quo to lead a revolution in medical robotics. Early investors experienced unimaginable gains, some making as much as 30 times their initial investment. Even with those enormous gains in the rearview mirror, the stock could have plenty of room to run into the future. In a brand new premium report on Intuitive Surgical, we've commissioned Karl Thiel to outline the company's key opportunities and risks with surgical precision. As one of the minds behind our Rule Breakers recommendation of the stock in 2005 (before it went on to gain more than 1,000%) Thiel knows the Intuitive Surgical story inside and out. It's a must-read for any current or prospective investor, and comes loaded with a full year of analyst updates. Make sure to claim your copy today by clicking here now.


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  • Report this Comment On November 14, 2012, at 5:56 PM, dc10fun wrote:

    No mention is made of Cardica CRDC that has a relationship with ISRG to supply stapling devices that CRDC is developing. Does this mean that the devices have now been approved.

  • Report this Comment On November 14, 2012, at 10:52 PM, TMFNoonan wrote:

    Hey dc10fun,

    I don't follow CRDC given its small size, but here's some details on the licensing deal they struck with ISRG back in 2010.

    " License Agreement. On August 16, 2010, Cardica, Inc. (“Cardica”) entered into License Agreement with Intuitive Surgical Operations, Inc. (“Intuitive Surgical Operations”), a subsidiary of Intuitive Surgical, Inc., pursuant to which Cardica granted to Intuitive Surgical Operations a worldwide, sublicenseable, exclusive license to use Cardica’s intellectual property in the robotics field in diagnostic or therapeutic medical procedures, but excluding vascular anastomosis applications (the “License Agreement”). In consideration for this license, Cardica received an upfront license fee of $9 million. Cardica will also be eligible to receive a milestone payment in an amount that is currently immaterial to Cardica if sales of any products incorporating Cardica’s patent rights achieve a specified level of net sales within a specified period after the date of the license agreement and will also be eligible to receive single-digit royalties on sales by Intuitive Surgical Operations, its affiliates or its sublicensees of specified stapler and clip applier products covered by Cardica’s patent rights as well as on sales of certain other products covered by Cardica’s patent rights that may be developed in the future. Each party has the right to terminate the License Agreement in the event of the other party’s uncured material breach or bankruptcy. Following any termination of the License Agreement, the licenses granted to Intuitive Surgical Operations will continue, and except in the case of termination for Cardica’s uncured material breach or insolvency, Intuitive Surgical Operations’ payment obligations will continue as well"

  • Report this Comment On November 14, 2012, at 10:54 PM, TMFNoonan wrote:

    dc10fun,

    Following up on this, it's unclear whether ISRG actually used CRDC's IP in developing the newly approved stapler. Let me know if you discover anything more.

    Best,

    Brenton

  • Report this Comment On November 16, 2012, at 11:49 AM, ISRGer wrote:

    How about jumping from my initial investment of $5 per share (before that very early 1-for-2 reverse split). Since then, I have bought more shares and they now total 10,000. What a winner and ISRG is now trading at over $530 per share. Stay in medical stocks. CWS

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