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How Intuitive Surgical Is Expanding Its Da Vinci X Systems Worldwide

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Overview

Intuitive Surgical’s (ISRG) Da Vinci X received early FDA (US Food and Drug Administration) approval in May 2017 and was given a CE Mark in Europe in April 2017. The company has initiated an early launch of the system, which is a low-cost version of Da Vinci Xi, its flagship product. Thus, high demand is expected in cost-conscious markets and emerging nations, and the product is expected to expand the company’s presence in such low-cost markets.

Intuitive Surgical launched its Da Vinci X systems in 2Q17, but the full launch isn’t expected until the end of fiscal 2017. The limited launch of the system has already generated significant sales.

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ISRG’s expansion strategy for Da Vinci X

In 3Q17, Intuitive Surgical’s Da Vinci X system placements totaled 16, five of which were placed in the US, while 11 systems were placed outside the US. In 2Q17, a total of 11 Da Vinci X systems were placed.

In 3Q17, ~10% of new placements were contributed by the sale of Da Vinci X systems. Intuitive Surgical also launched the product in nine additional countries and expects to launch the system in four more countries in 4Q17.

According to Intuitive Surgical, the Da Vinci X system’s utilization was reported as strong in 3Q17. The system was used mainly in general surgery in the US for urology and gynecology procedures.

Notably, Intuitive Surgical stock makes up ~1.3% of the total holdings of the Health Care Select Sector SPDR Fund (XLV). XLV also holds ~3.4%, ~1.5%, and ~1.5% in peer medical device peer companies Medtronic (MDT), Becton, Dickinson, and Company (BDX), and Stryker (SYK), respectively.

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