This JAMA article's study concerned colectomies (colon removal) done between October 2008 and December 2010, of which 51.7% were done open, 47.6% were done lap, and 0.7% were done robotically. Novadaq's Firefly for da Vinci, incredibly relevant to this type of surgery, was FDA approved February 2011. Maybe this "recent" study is already ancient history.
I have been hesitant to post this sentiment myself but since you have I'll go ahead. There are reasons for Intuitive to buy Cardica beyond bypass surgery.
Right now Intuitive is in a battle with some medical organizations and some of the press to prove robotic surgery is not just "as good as" lap but superior. Otherwise, why use a more expensive method that is sometimes slower to perform? I believe Cardica's innovations will improve surgical quality and also speed. Good reasons for Intuitive gaining access to them. However, Intuitive's mode in the past has been to avoid owning new technology, just license it.
Now here's where the Machiavellian devil on my shoulder whispers in my ear, "They should buy it all, and thus have use of it not only for themselves but control its use in lap surgery". They could either deny its use in lap to advantage robotics or merely demand a premium over current lap stapling products. In this case, total control would be better than partial control.
According to Seeking Alpha's article dated January 7th, the visualization capabilities of Novadaq's newer systems eclipse those of the Firefly systems provided to Intuitive for da Vinci. The author indicates the enhanced screen resolution and color of the Pinpoint system along with improved MIS tools might make da Vinci less competitive.
My question is does this open the door for renegotiation of the Novadaq/Inutitive licensing and equipment sales agreement (ten year, signed 2009), one more favorable to Novadaq?
You may be right, but it all depends on the details like duration and exclusiveness of contract, price of equipment and kits, the amount of competition ISRG is likely to have in the robotic area going forward, etc. Novadaq may be willing to accept a large premium from Intuitive now, as opposed to a potentially larger one from another company 5 years out. Regardless, Novadaq's management seems savvy enough to figure it out.
Looking forward to earnings (on 2/6 before market, I believe).
It's noteworthy that TEI's products are mainly surgical items for tissue repair and reinforcement and are not diagnostic in nature. At first glance, TEI is not an obvious acquisition choice for a company to aid in selling equipment in Novadaq's area of expertise, medical imaging.
However, there are some things beyond a ready sales force that may make the deal attractive. TEI has intimate connection with doctors in both the wound care and reconstructive surgery areas, places where Novadaq is expanding swiftly. TEI sells a variety of products that serve as scaffolding for tissue regrowth and revascularization, a good complement for a company that images perfusion. Tissue engineering is heavily dependent on an expert knowledge of biomolecules and this, too, may make TEI a good fit. Novadaq is always on the lookout for new and useful biomolecules to use as imaging markers.
A deal like this might provide better synergy than I first thought.
Yeah, they should cut out all extra fat. For example, they doubled their number of engineers in 2013, axe them. R&D is a waste. Why all the new sales people? Most don't bring in the bacon for months! They could go earnings positive NOW if they'd get rid of all that dead weight.
What, you want me to wait for more than a quarter to harvest my investment? How crazy is that?
On Intuitive's latest conference call (1-24-14) a figure of 80% was given for da Vinci Si-e systems sold with Firefly. A nod was given to Firefly for helping increase the number of general surgery procedures. For da Vinci, general surgery increased 93% in 2013 and has overtaken urology as the second most performed procedure category.
I think this trend also bodes well for Pinpoint adoption.
Indeed the 80% figure was for the US machines. My point was really about the percentage and the desirability of SPY technology as evidenced by the steep ramp in general procedures, where Firefly shines, not the absolute numbers of Firefly systems sold. With capacity overhang and ACA issues still playing out with da Vinci system sales, the numbers might not jibe with procedure growth for a couple of quarters.
The key to isrg not being taken out was that isrg's price was always just ahead of an acquiring company's comfort zone. It was easier for a buyer to take a pass on potential future profits than be second guessed by current shareholders and analysts due to a perceived overpayment.
I'm hoping the same thing will happen with nvdq. Nvdq's management knows what they have, I don't think they will sell cheaply.
Also, shorter hospital stays, less blood loss.
Comments, Herb Greenberg?
No link, see yahoo company news for ISRG (2-5-2014).
You are correct that the Exchange 30 was only approved for appendix and intestinal procedures. But, like any other FDA approved device, once approved there is nothing to prevent a surgeon from using it "off-label"(other than liability issues, perhaps). Doctors do this with drugs all the time.
However, Cardica cannot advertize or promote any off-label use.
And the results of the Pillar II trial will be published within 60 days, before the SAGES (The Society of American Gastrointestinal and Endoscopic Surgeons) meeting, April 2-5.