How solid are your numbers on "cost for the Firefly equipment" and consumables? I haven't been able to find them anywhere. Also the "10-year" deal started when and is there any covenant to renegotiate shared compensation at its close? You are the first one who seems to have access to this information. Thanks for posting it and I look forward to any further revelations/discussions on the details.
OEM and consummable terms of ISRG deal are avail from analyst reports and from the co. They are 2+ yrs into a 10-yr agreement with ISRG. Dont believe terms are renegotiable, but not 100% on that. Deal is certainly profitable but not hugely so on OEM side and $200-250 on kits. But the benefit of the tech being validated by ISRG, widely distributed and gaining familiarity with surgeons/hospitals is incalculable, plus ISRG will eventually have to re-up given how integral Firefly is becoming to DaVinci.
As I know you are well aware, the real income for NVDQ will hopefully come from the sale of razor blades and not the sale of the razors. There is probably a significant gross profit margin associated with the sale of those $250 kits.
regards endo and thanks for the input
farfignugen21. my thanks to you also for the good info.
I have been holding ISRG for 7 years and started a much smaller position in NVDQ about 6 weeks ago (cost basis $8.90/share). My interest was triggered by what ISRG is doing with Firefly, and after studying NVDQ for a while I pulled the trigger on a starter position. So far I am more than encouraged by how the ISRG/NVDQ joint venture appears to be panning out. The recent Corporate Presentation on the NVDQ website is certainly encouraging as well. I believe the future looks bright for this company.
As for the ISRG joint venture: while it's fair to say that the sales to ISRG are not "hugely profitable", they allow NVDQ to leverage the ever-growing ISRG sales/marketing organization. They are providing increasing volume to NVDQ manufacturing and so I surmise help to achieve economies of scale for NVDQ. Also, ISRG is bearing (or sharing?) the cost of conducting a clinical trial and filing the 510k with the FDA for the Biliary indication on Firefly, which can only help NVDQ. And as you said, Firefly's ever-increasing penetration of Robotic procedures provides invaluable exposure and credibility for the technology in all surgical platforms, which hopefully will provide a very profitable "multiplier effect".