Intuitive won FDA 510(k) clearance for its next-generation surgical robotics system last week, nearly one decade after winning clearance for the da Vinci Xi system.
“We are planning for a limited launch starting in the U.S. as we optimize manufacturing and supply chains, and progressively expand our manufacturing capacity,” CFO Jamie Samath said. “We expect to be in this limited launch phase into 2025. During this period, we will be focused on customers that collaborated with us during the development period and those customers who have mature robotic programs and have a need to expand capacity.”
Others who want to save a spot in line for when da Vinci 5 is more broadly available will be able to secure upgrade rights with the acquisition of da Vinci Xi units, the da Vinci 5’s multiport predecessor.
“Purchase arrangements for Xi that includes these rights will result in a deferral of a portion of the purchase price,” Samath said.
Intuitive does not expect a significant number of surgical robotics system trade-ins during the launch period “given constrained supply,” Samath said.
The new daVinci 5 system will take the top position among Intuitive’s offerings, President Dave Rosa said, with DaVinci 5, da Vinci Xi and da Vinci X “at a variety of price points within that portfolio.”
Intuitive expects the gross system average selling price for Da Vinci 5 will be about 30% higher than da Vinci Xi, Samath said.
But he said that because da Vinci X can or will integrate products that customers usually purchase separately — including Table Motion, insufflation, Intuitive Hub, SimNow simulation, first access camera and the E-200 electrosurgical generator — the da Vinci 5 cost will only be about 15% higher than the da Vinci Xi with the full stack of products.
Rosa said it’s likely that Intuitive will make refurbished Xis available at some point.
“We think the Xi gives us an opportunity to rotate into other sites of care or into highly cost-sensitive markets with a really capable machine,” said Intuitive CEO Gary Guthart in a follow-up. “We think the Xi [refurbishment] base is going to be a nice asset for the company.”Samath explained why he doesn’t think the Da Vinci 5 rollout is analogous to Intuitive’s Xi launch.
“Our overall footprint is obviously much larger,” he said. “The dependency on Intuitive is significant relative to 2014 when we launched Xi. And as of the end of last year, we had just over 2,200 systems under operating lease arrangements that if you hold everything else equal, provides an easy upgrade path for some customers. … We’re in quite a different place relative to both our position in hospitals — the operating lease dynamics are quite different — and you have the price premium where customers have to absorb that compared to relative value.”
Don’t expect a price cut on the Xi system yet, or details on Xi refurbishment pricing or strategy, Samath said.
“But as Gary described, it gives us an opportunity from a segmentation perspective to address more cost-sensitive segments or geographies,” he said.
DaVinci 5 customers will get one free year of Intuitive’s Case Insights, a computational observer technology based on machine learning that lets surgeons review objective surgical performance indicators alongside video of that procedure’s critical steps, Samath said. After that first free year, customers will need to subscribe to Case Insights to maintain access.
That revenue is “not expected to be significant in the near term,” he said.
But in the longer run, it could create the base for an intuitive business model more oriented around software-as-a-service, analysts from Truist Securities said after the presentation.
“When the earlier clearance translates into a full launch (and a new placement cycle) remains an open question, but we continue to have high confidence that, when the new launch does kick into full gear, ISRG will experience [revenue and] EPS growth acceleration,” the analysts said in an email to subscribers. “We expect investors to readily look forward to this, even if the bigger impact is set to materialize/impact in [2025 and beyond,] our current expectation.”
For an inside look at what the Da Vinci 5 is capable of, register now to attend DeviceTalks Boston. Intuitive EVP and Chief Digital Officer Brian Miller will review some of the futuristic functionality of the new system in a closing keynote, “Intuitive: The Future is Now with da Vinci 5.”
This week, discover more from leaders at Intuitive and other surgical robotics leaders during our DeviceTalks Tuesdays webinar series Surgical Robotics Week.