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Controversy Over Surgical Robotics Heats Up

Herb Greenberg

Thirteen years ago Intuitive Surgical (ISRG)'s da Vinci robot was hailed as a revolution in the operating room, triggering a hot IPO and an even hotter stock. At its peak, the stock traded at nearly $600, versus around $500 now.

With earnings expected after the close Thursday, investors will be looking for any sign that the mounting controversy and legal issues over the injuries and deaths allegedly related to da Vinci procedures are affecting the company's growth.

Over the past two quarters, growth in sales and profits slowed considerably, but it is still robust by most standards, with sales in the fourth quarter leaping 23 percent. Driving gains has been growing use of the da Vinci for hysterectomies and other gynecological procedures.

Forecasts for this quarter are for earnings per share of 43 cents on revenue of $282 million. But as more reports of complications have come to light, the da Vinci debate is heating up.

(Related Article: Robotic Surgery: Growing Sales, but Growing Concerns )

In late February, the FDA launched a probe calling for voluntary information from hospitals and surgeons using the da Vinci, in an effort to determine "if the rise in reports may be a true reflection of problems." Speaking at an investor meeting in early March, the company said, "The relationship we have with the FDA has been a long and very strong relationship."

In mid-March the American Congress of Obstetricians and and Gynecologists issued a statement, warning that "studies show there is a learning curve with new surgical technologies, during which there is an increased complication rate."

And five days later, the Massachusetts Board of Registration in Medicine weighed in with an advisory citing an "increasing number of reports of patient complications associated with robot-assisted surgery."

In a statement to CNBC, Intuitive said: "In any definitive treatment for complex disease, such as surgery of the cancerous prostate, heart, or other major organs there are risks of complications. Robotic surgery has proven benefits in reducing the risk and complications associated with open surgical procedures thereby extending the benefits of minimally invasive surgery to a broader population of patients. Overall, adverse event rates are very low. Da Vinci surgery has been shown to be safer than the open surgery alternatives in numerous independent large scale, peer reviewed studies."

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