Signal: Intuitive Surgical’s stock plummets despite Q3 sales growth

Intuitive Surgical, the producer of the Da Vinci surgical robotic, introduced its Q3 earnings in a name yesterday (19 October) and the market was not pleased with the outcomes. The corporate’s share value dropped by 8% throughout pre-market buying and selling on the Nasdaq as the corporate’s $1.74bn income fell short of analyst predictions of $1.77bn.

The outcomes had been nonetheless extraordinarily stable in a vacuum, with a 12% increase in revenue from Q3 2022 and comparable revenues to Q2 of 2023 regardless of a decrease post-tax revenue. This year-on-year (YoY) income development was led by a 19% development in Da Vinci procedures. Da Vinci is the world’s hottest surgical robotics suite, utilized in a variety of disciplines to make keyhole surgical procedure easier and fewer strenuous for surgeons.

One issue which may be key in understanding the share value drop regardless of the one delicate underperformance is the influence of the seemingly unconnected drug Semaglutide. The energetic ingredient in Wegovy and Ozempic has apparently limitless knock-on results, from altering food brands’ production strategies to reshaping the Danish economy, and the medical gadget sector is not any completely different.

One of many main makes use of for Da Vinci is bariatric surgical procedure, which allows weight reduction via a variety of potential mechanisms. It has long been considered the most effective treatment for long-term weight reduction, however the brand new class of medicine to which Semaglutide belongs are threatening to take that crown.

Intuitive raised the danger of these drugs to its business earlier this year, inflicting one other share rout, although solely of 4.5%. Wegovy is accessible to anybody with a BMI of 30 or over, and it reveals no indicators of reducing in recognition, elevating questions on longer-term gross sales of Da Vinci machines.

The corporate additionally faces competitors from different robotics methods, resembling CMR Surgical’s Versius. CMR recently raised $165m in funding, bringing its complete valuation to over $1bn. Although the corporate is much less established than Intuitive, it’s rising as a serious challenger to the enormous.

Surgical robotics stays an space of curiosity within the Medical Units subject extra broadly, with a reasonably constant variety of patents filed over the previous three years.

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