California robot-assisted surgical systems maker Intuitive Surgical (NSDQ:ISRG) plans to buy back $1 billion worth of its common stock from Goldman Sachs under a new accelerated share repurchase program.
The company hopes the buyback will help reset the company’s valuation as its stock continues to slide. ISRG shares enjoyed a brief return to the mid $500s earlier this month, but have largely traded below $450 since last July. News of the repurchase sent shares up 1.2% today to $363.59 as of about 4 p.m. EST.
"Our decision to repurchase $1 billion in Intuitive Surgical stock on an accelerated basis reflects our long-term view of the value our company can bring to patients, surgeons and hospitals," president & CEO Gary Guthart said in prepared remarks.
Intuitive plans to retire the majority of newly repurchased shares within 2 weeks, with the remaining shares to be phased out by early November 2014.
The new mega-repurchasing program comes less than a year after Intuitive’s board OK’ed a $1.5 million share grab, including a $500 million accelerated buyback from Goldman Sachs.
Intuitive has for months been battling negative headlines about adverse events, recalls, FDA scrutiny, insurance group lawsuits, hospital marketing conflict-of-interest flaps and on. The downward spiral began last March when the American Congress of Obstetricians & Gynecologists released a statement questioning some of the marketed benefits of robot-assisted surgery. The study was accompanied by a letter from ACOG president Dr. James Breeden, who noted that the benefits of robot-assisted surgery may also be achieved through other minimally invasive methods that aren’t as costly as the high-tech procedure.
Intuitive has battled those notions with a slate of studies finding that robotic surgery reduces readmissions and costs associated with hysterectomy, bests open surgery for prostatectomy and more. Earlier this week the company highlighted a pair of studies touting robot-assisted lung surgery over either open or minimally invasive techniques. Nevertheless, sales have dwindled in recent quarters and shares have continued to slide.