Intuitive Surgical (ISRG 2.64%) is the leader in robotic surgery -- and by quite a bit. The company holds 79% of the global market, according to BIS Research data. And its closest rival -- Stryker Corp. -- holds about 9%. So Intuitive and its investors don't have to stay up nights worrying about competition.
Still, to stay ahead in the long term, it's important to do one thing -- and that's maintain the robotic systems as a favorite of surgeons. After all, as newer products join the marketplace, there's the possibility surgeons and hospitals will want to give them a try.
Medtronic and CMR Surgical may win regulatory clearance as soon as this year for their new systems, according to Evaluate Medtech. And Johnson & Johnson could gain approval for a system in 2026.
How is Intuitive keeping itself in the top spot with doctors? Let's find out.
Image source: Getty Images.
The Intuitive experience
The key word is digital. Surgeons use Intuitive's flagship Da Vinci robot for a variety of minimally invasive procedures in areas such as general surgery, urology, and gynecology. But the Intuitive experience doesn't stop there. The company has created several digital tools to help surgeons -- and these tools have gained users.
In the first quarter, the My Intuitive app community tripled, compared to the year-earlier period. The app now is available in the U.S. and six other countries, including the U.K. and Japan. It's set to launch in the second quarter in Italy, Spain, and India.
It's easy to understand why this app is popular with surgeons. They can use it to study data from procedures they performed on the Da Vinci, follow their training information, and compare personal performance with national benchmarks.
Intuitive also has created Intuitive Hub. This hardware/software system for the operating room allows medical staff to share and store video from procedures. Intuitive Hub makes virtual collaboration easier and allows surgeons to easily review their work. The procedures using Intuitive Hub jumped 60% year over year in the first quarter.
Intuitive also is making it easy for surgeons to keep their robotic-surgery skills fresh. This is done through SimNow, a simulator for the Da Vinci system. It includes simulations, training exercises, and virtual-reality situations. The number of these installed simulators advanced 33% in the quarter from the same period a year ago.
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Key Data Points
Trained on the Da Vinci
It's important to remember most surgeons are trained on the Da Vinci system. This clearly gives Intuitive an advantage right out of the gate. The digital tools add to reasons why surgeons would want to continue with Intuitive, rather than move on to other systems.
What does all of this mean for investors? Right now, Intuitive faces the risks of a resurgence of coronavirus cases, the weakening of hospital budgets, rising inflation, and supply-chain issues. Any of these elements could weigh on earnings in the near term. The good news is they won't be problems forever. I wouldn't expect them to drastically hurt Intuitive's long-term prospects.
Now let's get back to the idea of competition. Intuitive's efforts in digital clearly are bearing fruit. They're keeping surgeons happy. So it's likely surgeons will want to stick with this system that they know well.
But what about hospitals? After all, they make the buying decisions. I'm optimistic about hospitals sticking with Intuitive, as well. Here's why.
Those hospitals that have already invested in the million-dollar Da Vinci systems and training for surgeons may not want to start from scratch and spend money on a completely different system. Intuitive already has installed more than 6,900 Da Vinci systems worldwide. And the company doesn't make money on installs alone. In fact, it makes a greater share of revenue from accessories and instruments needed for each procedure.
All of this means Intuitive has the complete package that should keep it in the lead, well into the future. That could keep revenue climbing -- and lead to share gains for investors over time.
