Mako Surgical (NSDQ:MAKO) Rio robotic surgery system needs to move from ‘nice to have’ to ‘need to have’ if it’s going to gain traction with hospitals.
That’s because the capital expenditure market is still under pressure from the weak economy, according to Leerink Swann analyst Richard Newitter, citing the un-named hospital CFO.
Spending on healthcare IT will continue to lead the priority list, at least as long as there’s federal Meaningful Use money on the table, but medical devices that can’t deliver a strong return on the investment will have a hard time gaining market share, Newitter wrote.
The emphasis on HIT spending means a tougher row for companies such as Stryker (NYSE:SYK), as hospitals look to extend the life of more quotidian items like stretchers and beds.
The hospital CFO told Newitter that demand for the Rio device, designed to assist physicians during hip and knee replacements, "has been muted among his ortho surgeon base."
"This would seem to reinforce the notion that MAKO will continue to struggle with system placements nearer term, at least until the perception of its technology moves from a ‘nice to have’ to a ‘need to have,’" Newitter wrote.
The bloom could be off the rose for Intuitive Surgical (NSDQ:ISRG) and its da Vinci robot-assisted surgery device, as hospital buyers’ reasoning shifts, he added.
"We found it interesting that the rationale for purchasing a robotics platform seems to be changing within the context of a more constrained capital environment. Compared to prior years, when da Vinci purchases were more ‘offensively’ base’ – as a marketing tool to attract new patients – the specialist says the ‘go’ or ‘no-go’ decision with respect to additional robotic purchases is now more skewed to a ‘defensive’ strategy – i.e., only justifiable to keep doctors and patients from defecting to nearby hospitals that have a robot," Newitter wrote.
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Analysts’ ups and downs
- Abiomed (NSDQ:ABMD): TheStreet Ratings upgrades from "hold" to "buy."
- Amgen (NSDQ:AMGN): Lazard Capital upgrades from "sell" to "buy," sets $101 price target.
- Becton Dickinson & Co. (NYSE:BDX): CLSA downgrades from "outperform" to "underperform.”
- Dexcom Inc. (NSDQ:DXCM): Leerink Swann maintains “market perform” rating, $12 price target.
- Echo Therapeutics (NSDQ:ECTE): Ascendiant Capital Markets initiates coverage at "buy," sets $2 price target.
- Endo Pharmaceuticals Holdings (NSDQ:ENDP): Goldman Sachs reiterates "neutral" rating, lowers price target from $36 to $35.
- Endologix (NSDQ:ELGX): Piper Jaffray upgrades from "neutral" to “overweight," reiterates $16 price target.
- Edwards Lifesciences (NYSE:EW): Goldman Sachs reiterates "buy" rating, sets $118 price target.
- Edwards Lifesciences (NYSE:EW): Wunderlich Securities reiterates "hold" rating, raises price target from $80 to $96; Wedbush maintains "outperform" rating, increase price target from $98 to $101; Raymond James raises price target to $100 from $92, sets "outperform" rating; Piper Jaffray reiterates "neutral" rating, raises price target from $88 to $93; Leerink Swann maintains "outperform" rating, raises price target to $100 from $95; Canaccord Genuity reiterates "buy" rating, raises price target from $101 to $110.
- Hologic (NSDQ:HOLX): Dougherty & Co. upgrades from "neutral" to "buy" rating, sets $21 price target; Cantor Fitzgerald reiterates "hold" rating, raises price target from $20 to $21.
- Hospira (NYSE:HSP): JP Morgan reduces rating from “overweight” to "neutral," lowers price target from $40 to $38.
- Insulet (NSDQ:PODD): Canaccord Genuity reiterates "buy" rating.
- Intuitive Surgical (NSDQ:ISRG): Zacks Investment Research maintains "neutral" rating.
- Nuance Communications (NSDQ:NUAN): Deutsche Bank reiterates "buy" rating, cuts price target from $32 to $31.
- NxStage Medical (NSDQ:NXTM): Leerink Swann reiterates "outperform" rating, lowers price target to $16-$18 from $25.
- Sirona Dental Systems (NSDQ:SIRO): Jefferies & Co. reiterates "buy" rating, raises price target from $56 to $57.
- Stryker (NYSE:SYK): Zacks Investment Research reaffirms "neutral" rating.
- Tornier (NSDQ:TRNX): Bank of America Merrill Lynch reiterates "buy" rating, lowers price target from $28 to $23.
