For just over six years I was a competitor of Intuitive. I fought with every fibre of my body to bring an alternative to their da Vinci robot line up. Back then when we launched - it was incredibly hard to fight against them - win business. They have a series of moats around their business that just makes it so incredibly hard for a competitor to gain traction.
The first thing (and maybe the most important) is the product. The da Vinci Xi is a near perfect machine for what it needs to do. It is capable, reliable, and affordable. Yes that last one will surprise many and I will not go into the exact economics now - but with the move to leasing - anyone that can fit an Xi into their hospital can get access to one.
Their end effectors are second to none. The range, the quality, the precision are exquisite. But it is also their capability of end effectors. A choice of energy devices, and their formidable Sureform staplers. Going up against that range in any tender or contract is very very hard. It leaves you with a continuous attempt of justifying why you don't have them all.
Note: Intuitive now have over 1/3 of all stapling in the USA - they are already the market leader in surgical stapling volume by some source data on usage out of the USA. Let that sink in.
They then have they connected digital moat. A well thought out presentation of data to the users and the hospitals - to the payers. They can lock you into their ecosystem and it is hard to get out. They have taken a page straight from Apple's playbook on this. And I can tell you - that in itself (no matter how good the competing robot is) can be enough to prevent a switch.
The financial moat. Myself and Joe Mullings have talked and talked about the incredible war chest they have which enables them to be the best deal for the hospital - every time. I want to be clear - not the cheapest - but the best financial option. As a competitor starting up you need revenues and revenues fast. If all you can ever do now is place robots - then you have a gap for a few years to get to break even (just on that system). Every placement and the financial hole you dig gets bigger - it's a financial money pit. Intuitive can fund this off the balance sheet. Startups and startup divisions have to finance that - often at a high cost. This literally "Sucks the oxygen out of the room" for any competitor. Be that a small start up or a monster strategic. That 25 years of prior capital sales is a moat no other company will ever replicate.
Procedural clearances are the next big barrier. With FDA and MDR, as a new company you join the race piecemeal. That is very unattractive for a commercial sale. If you can only do hernia, or prostate or cholecystectomy out of the gate... for all but research institutions you are not a viable system for the hospital that wants to spread the robot across procedures and maximise return. The fact Intuitive on the DV5 got broad clearances became a major issue for the competitors.
Innovation. The company continues to innovate in a logical fashion - not for innovation's sake. Force feedback, insufflation, assistive work flow features are all logical and needed steps forwards. Innovations in a way - steady iterative progress in another. But they are not "inventing a robot" and then waiting to add all the extras on much later. Their R&D has things on that robot in 2025 that others will need another 5 years to reach. And then.. the puck will have moved again. This innovation march will constantly keep new entrants one step behind them.
There are other smaller moats but now I want to get to one of the most important. And it is one that I think other strategics are getting wrong and underestimating. The people. And the people falls into two bundles here. The first is the amount of people that are dedicated to the robot. That army is not also selling sutures, hand held staplers and haemostats etc.
This is a team of laser focused robotic ecosystem commercial experts. This is a vast team of service engineers, clinical support staff, data engineers and battle hardened managers that actually know what they are doing and what it takes. How to accelerate deals.
Few today know what it means to have to scale ahead of the game to get the numbers of people to support this business. It is not just the cost, the time and the effort to get everyone up to speed and become effective at deploying robotics programs. There just are not that many great people out there that know what they are actually doing. I will say this until I am blue in the face. There is nothing on earth like selling and implementing a full on soft tissue robot. It's not like an Ortho robot- or a CT scanner - or a vision system. It's not like a stapling contract or a suture catalogue. It's unique and carries all of those skills wrapped into one. It needs a deep deep understanding of procedures from head to toe - and how the robot impacts them. And Intuitive have an army of those capable people.
But - and I have talked about this before. It is about a leadership team that have a deep understanding of this space. From the CEO Gary Guthart all the way down through the ranks they live and breath this space. They are not distracted by an orthopaedic business, or a pharma business, or a cardiac business; and then left to "run this on the side." The management team is dedicated and experienced. Their recent shuffle at the top is a shuffle of veterans in the space. And any other company should read what that means.
So Intuitive are starting from a super solid base with an untouchable moat. Their sales are increasing and the DV5 launch was a display of hyper focused market dominance. But trust me - they are only in second gear and about to move out of that.
Watch as they move from second to third gear
All the signs are here that in 2025 they are about to go on a rampage. They are not stupid. They know that Medtronic is learning fast and on the cusp of upgrades to HUGO RAS. Energy - stapling. They know that 2025 they must get a clearance in the USA and that will cause a temporal distraction as some friendly sites want to give HUGO a Go. They also know that the second major strategic - Johnson & Johnson - has gained IDE approval to start clinical cases - which by my calendar estimate - the first systems will have been delivered in these weeks - and the preps for case number 1 with Ottava are underway. So they are coming. Intuitive like me will be watching the numerous job adverts out there for commercial folk - clinical folk - marketing folk. As JNJ gears up pre launch to start to prep the market for what they believe will be a 2027 launch. They may be late but they are JNJ so any company should have a weary eye on them.
Plus Stryker. There is always the risk that Stryker will finally make a move to this space and buy in a technology - a Moon Surgical, a DistalMotion, a CMR Surgical. And they do have a formidable ability to deploy technology and have a dominance in places like the ASC.
And then there's China - where a few companies could cause some issues - like Microport with Toumai which - if they can work out how to fund the business and not collapse in under their own weight at Microbot - it's a pretty competent system with some 5G differentiation.
I've predicted that none of these will have more than a 15% impact on marketshare, and that the market is about to ramp up and every hospital on the planet (now capital is not a barrier) will buy into robotic procedures. And Intuitive is at the front and have clearly decided they will stay at the front.
Da Vinci 5 is a "shell" a "frame" that allows infinite upgrades of hardware and software. I've described this in many posts, but I think you will now start to see the first upgrades in 2025. But there are signals this week that something more is happening at Intuitive. Today they are heavily biased in the USA and (although no where near saturated) the rapid growth phase is gone. But not outside the USA. Signals are coming that Intuitive is about to go on a global romp. Their leasing models and extended life instruments alongside pushing out once owned Xis is going to open up a lot of markets to them. They have a great history of using once owned systems to get into the lower tier hospitals.
Europe is still underperforming in relation to what it can do - but has vast volumes and skills and does have money if it can be directed right. I see in 2025 a push to work at the country health system level to start to show how MIS through robotic enablement can be transformative for healthcare in Europe. As MDR throws up more and more hurdles for companies wanting to get in... As KRINKO and sterilisation makes a barrier for instruments. I predict that the Xi will be fundamental to push combined with the digital ecosystem to play upon Europe's desire for data to convert more and more to robotics. I predict DV5 will come mid year (My prediction) but the workhorse in Europe will be placed and Ppc systems with the Xi to breach the critical mass in country after country. I think they will work on "filling the shelves" in Europe to again starve the oxygen from Medtronic and JNJ. The number of robots per hospital in Europe will be less - there is less space in terms of capacity - funding. So the company that gets in first wins.
I see this also as a massive expansion across Latin America - there is growing appetite south of the equator and Intuitive is set to commercially dominate this region.
And then India. It was declared just the other day that they want to go harder and bigger in India as a growth market. SSi and Mantra are a real threat there - so watch Intuitive up their game in India and then China.
China will be critical - if Intuitive can show that they can hold their own or even win against the raft of homegrown alternatives (it's a tough one) then that would be a global statement and keep these Chinese companies hemmed in for survival in China. That is a judo move right there I am watching for.
Don't discount Japan as they move to counter Medicaroid.
Intuitive has dominated the USA ,and as the OUS scene starts to heat up they will want to be absolutely prime to take advantage. That will come with focus, data and of course regulatory approvals. Their SP has been an addition, ION and DV5 will gain clearance after clearance. New products will get cleared, add ons to the system, digital additions and it will all be fuelled by a business model that will allow easier access to convert laparoscopic cases to robotic cases. We may even see backwards compatibility between the Xi and the DV5 tower?
Intuitive to strengthen the USA
They know that the USA is the prize for other strategics and many market entrants. They also know that many of those companies will try a parallel path to get in via the ASCs and OPDs. I guess that they will continue their strong march of the DV5 across the USA and amplify the strategy of placing towers for lap - ready to covert to DV5.
I have a suspicion that part of their push will also be to move down the acuity chain and look to get more established in the sites of care like ASCs and OPDs as case loads get shifted there. They will need to focus on proving that the DV is economically viable even in those settings. I think they are ready for it - and will deploy resources to strengthen that case. I think their third gear ambition in the USA is to go for major procedure volume expansion and make that razor - razorblade model work even harder and wider. So this will be a dual prong attack - USA go for procedure expansion and take more and more market from lap. OUS they will go for allowing easier access to the robot and go for site expansion and bring more and more countries and health systems into the robotic fold. At the same time in established countries getting them to hit the tipping point of critical mass where robotics becomes the primary choice of health systems on a health economic basis.
I think 1st gear for them was the establishment of robotic surgery. The second gear was to go beyond the base of robots - expand with Xi and make robotics mainstream. I think the third gear is OUS expansion and USA consolidation but with one extra. I think 2025 sees them really start to move on systems like ION. They want minimally invasive therapies enabled by robotics to be more than the Xi / DV5. I think the next gear is to amp up ION and then start the gradual expansion on endolumenal robotics to start to top n tail healthcare systems by offering multiple Minimal Access systems that drive their quintuple aim. I think 3rd gear sees their core business strengthen but their expanding business become a more important part of their business model. I am not sure they have an endolumenal surgery solution ready to drop just yet - but I do feel that the march from Bronchus to Urological to Endo GI is absolutely inevitable - and this will be a key part of third gear.
In all - I am doubling down that for the next decade this is an unstoppable machine. Well executed plans - focused plans - by seasoned experts that know exactly what they are doing.
These are just opinions of the author for educational purposes only
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