Intuitive Surgical lowered its growth projections for the year amid declining sales and increasing federal scrutiny of its da Vinci surgical robot systems.
The da Vinci robot—which typically costs about $1.5 million and is used in more than 1,300 hospitals nationwide—allows surgeons to perform procedures using hand controls at a computer system several feet away from the patient. Those procedures tend to include cancer surgery, hysterectomies, and gallbladder removals.
However, a potential defect in the robot's surgical scissors and a surge in negative press has derailed growth in the use of the robots for certain procedures, Intuitive CEO Gary Guthart said in a Thursday conference call with analysts. Over the last five months, the company has lost about $6 billion in value, Bloomberg reports.
Intuitive received FDA warning letter, lowered sales projections
During the conference call, Guthart said that the company has received a warning letter from FDA criticizing the company's safety-notification process. Agency inspections in April and May uncovered a number of deficiencies, including a failure to adequately report device corrections, according to a report dated May 30.
Additionally, FDA alleged that the company did not document the need for surgeons to clean the robotic instruments during procedures. Some surgeons tried to clean the instruments by scraping them together during surgery, the agency said, adding that their actions "led to tears or holes in protective tip covers that led to arcing that in turn led to injuries to patients."
FDA's warning letter could keep Intuitive from receiving federal approval for new products, the Journal notes. As such, the company readjusted its annual sales growth forecast to between 0% and 7%, down from its previous guidance of 16% to 19% growth. It also anticipated procedures this year will grow between 15% and 18%, down from its initial estimate of 20% to 23%.
The company has requested guidance on how to resolve two of the observations in the inspection report. "We believe these issues are addressable and will continue to work with the FDA to ensure this is resolved to their satisfaction," according to company spokesperson Angela Wonson (Langreth, Bloomberg, 7/19; Walker/Kell, Wall Street Journal, 7/19).
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Daily roundup: July 22, 2013