Intuitive Surgical rises on lawsuit verdict
Intuitive Surgical rises as jury rules for robotic surgical device company in lawsuit
NEW YORK (AP) -- Shares of Intuitive Surgical Inc. rose Friday after a jury ruled the company did not owe damages to the family of a patient who suffered complications following a surgery performed with Intuitive's da Vinci robotic system.
THE SPARK: The Washington State jury found Intuitive was not negligent in its instruction or training of the surgeon who performed the operation. The plaintiffs sued Intuitive for $4.9 million, saying the company didn't provide adequate training. The patient had his prostate removed in 2008 during a procedure that lasted 14 hours. It was the surgeon's first solo procedure using the da Vinci system.
THE BIG PICTURE: The da Vinci system uses robotic arms, cameras and a remote control console to help doctors perform surgery with tiny incisions. The company's business is built around sales of the $1.5 million devices and disposable instruments that come with them. More than 450,000 surgical procedures were performed with the device in 2012, and Intuitive expects growth of about 20 percent in 2013.
The device is used a variety of surgeries including general surgeries and gynecology and urology procedures.
The Sunnyvale, Calif., company it was pleased with the verdict.
But in recent months, some experts have questioned the use of da Vinci systems in hysterectomy procedures, saying the procedures are more expensive but don't result in better outcomes for patients. In late February the Food and Drug Administration also announced a probe into the da Vinci system.
THE ANALYSIS: Analysts said Intuitive is facing other lawsuits. Janney Capital Markets analyst Spencer Nam said he thinks most of the current lawsuits against the company are similar to the Washington State case and said they will be dismissed or settled out of court for relatively small amounts, reducing the company's costs.
William Blair analyst Ben Andrew said the verdict is a vote of confidence in Intuitive's methods. He added that the da Vinci system compares favorably to other surgical tools in terms of safety.
"Yesterday's favorable jury verdict ... validates that the company's training and marketing efforts have been and are sufficient and proper," he wrote.
Both analysts rate Intuitive Surgical shares at the equivalent of "Buy."
SHARE ACTION: Shares of Intuitive Surgical gained $26.22, or 5.5 percent, to $504.68 in afternoon trading. The stock has fallen 16.4 percent since Feb. 28, when the FDA probe was disclosed.
