ISRG already has a sweetheart deal with our company. Imho, the real threat is a major company like Johnson & Johnson or G.E. medical devices. I refer to it as a threat because in 2014 this company will begin to really break out.
The consolidation in the surgical robot sector may be great for NVDQ. ISRG should have them in their sights and it would be a nice add-on for DaVInci and ISRG as a whole.
Why this news is so important. At the Stiffel conference recently, Arum was asked how Pinpoint sales were going. He responded pretty good so far. He then went on to say that the salability of the equipment to hospitals would continue to be enhanced as more applications were approved thereby increasing the number of surgeons at the hospital who would use it and therefore support its acquisition. This FDA approval is another solid step in that direction.
ISRG's Press Release about FDA Approval just came out today. Check out the headlines section for ISRG for a link
Looking forward to Novadaq's 2nd " investor day" Nov 18, in NYC. Attended the first one last Sept 24. It was a very interesting and valuable day long experience. Very good presentations by several SPY surgeons such as Dr. Danny Sherwinter of Maimoides Hospital in Brooklyn NY. Subsequently Maimonides became the 1st hospital in the nation to purchase SPY for a wide range of uses. Soon after, I piled into nvdq with no regrets! I strongly advise anyone in the NYC area to attend. this year's meeting...Let's meet and greet!
Sentiment: Strong Buy
Amazing that Arun can, at the same time, exude both extreme cautiousness in his statements and barely contained enthusiasm about the path his company and their technology are traveling.
Two points in the talk that illustrate that Novadaq has a well mapped out game plan:
They coordinate their sales presentations, gathering hospital representatives and doctors from multiple disciplines together to show the advantages of the technology, first conceptually and then how it adds value to each of their fields. This encourages purchase of not just one machine for one area, but a buy-in of the whole suite of applications.
As first mover in the field, they continue to develop and patent new pieces of the technology. Novel problems encountered, solved and patented ensure barriers of entry to others. One example presented was that of a new patent application for a method of taking SPY beyond just visualization of perfusion. This method allows for quantifying perfusion, making measurements that apply not just to that machine and that patient, but from patient to patient. This greatly enhances development of standards of care and the ability to recognize a individual patient's situation.
You're correct - ISRG announced in their 4th Quarter CC back on January 22 that they had submitted an application for using Firefly to image the biliary system.
From the ISRG Q4 transcript: "In imaging, we submitted a 510(k) application to expand indications for our Firefly Fluorescence imaging system to use in biliary imaging. We believe this will have application for use in imaging in the common bile duct during Cholecystectomy, and will complement the use of Single-Site."
Another great presentation by Arun. The Pilar study is complete. The results will be in a major publication within the next several months. Endometriosis (spelling?) is moving along rapidly and could be in the market in 2014. Salesforce will be at 50 by year end. Two types of salesmen. One goes in to sell the unit. The other goes in once the unit is sold and helps the hospital expand utilization. Arun sees no head winds other then those facing Intuitive. They are already in initial discussions with the FDA on Lymph nodes. He remains very comfortable with 40% annual growth rates. This presentation is only half an hour and very well worth the listen. A good deal of the time is spent dealing with the future.
Novadaq's CEO, Dr. Arun Menawat, is scheduled to present at the Stifel Healthcare Conference 2013 today (September 12th) at 2:40 p.m. ET. Live webcast available on company's website.
Still too many uncertainties to NVDQ to give good estimates. I'm working on secondary even tertiary indications to estimate revenues/costs/earnings. It takes reliable data and calibration before a model can be honed enough to make "accurate" forecasts. With ISRG they put hard sales of new hospitals and listing of new surgeons in the early days and with this hard data I could build a model. NVDQ is more complex with multiple license and joint venture agreements as well as the budding new internal PinPoint and Luna products. Eventually these will become dominant in the model but for now they have been immaterial for revenue though their costs were significant. The hiring of marketing resources and the focus on economic and clinical papers to stimulate the adoption curve is the current most important tactical stage---They are doing a good job of managing the process. When will it take traction for revenues/earnings? Ah the million dollar question.
A belated thank you for sharing a synopsis of your methodology with us -- it sounds like a 9-5 to keep up with the data!
I've been keen on NVDQ for 1 year and I don't think it's beat in earnings and revenue both yet (pls correct if this is wrong)... With a revenue that sounds from your estimates like it could top 15mil Q3, gross inc at well over 10m in that case, and positive eps.... the market will surely reward us, but in what range would you estimate given your findings?
Anders, that is nice rsch work at the hospital level. Wondering: have you attempted to do the same for LUNA - i.e. reaching out to wound care centers to get early reads on LUNA acceptance/interest/orders. My understanding is that a few wound care roll-ups control a huge chunk of this mkt nationally - with Healogics being among the largest. Still early days here...
It is my recollection that earlier this year Intuitive Surgery indicated that they had submitted to the FDA the use of SPY technology for additional surgeries.