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Robotic Surgeries Positioned to Surge Over Next Five Years

October 27, 2015

U.S. surgeons predict a big increase in robot-assisted surgeries over the next five years, especially for colorectal and hernia procedures, according to a survey by RBC Capital Markets.

About 15% of surgeries today involve the use of robots, and the figure could hit 35% in five years and 41% in 10 years, the survey indicates.

Most surgeons are quite satisfied with the market-leading da Vinci robots from Intuitive Surgical (NASDAQ:ISRG), making it difficult for upstarts in the market such as TransEnterix (AMEX:TRXC), RBC analyst Brandon Henry said in a report Monday.

“Given the existing money/time investments made in ISRG’s da Vinci platform, we believe new robotics platforms will have to be differentiated in order to drive meaningful switching,” Henry said. “Surgeons want lower system/instrument costs, a robot with faster setup/docking time, less onerous footprint, a smaller trocar size, haptic feedback, the ability for the surgeon to be scrubbed in and at the patient’s bedside, and better single-port technology. This is exactly what new players like TRXC are bringing to market.

“Over the next five years, surgeons expect the penetration of robotics in colon/rectal, gastric, hernia, hepatobiliary (gallbladder, bile ducts, liver), and pancreas procedures will increase the most, Henry said.

About 15% of colorectal procedures are done using robots today, and surgeons predict it will hit 39% in 2020, RBC reported.About 9% of hernia procedures are currently conducted with robots, and surgeons forecast it reaching 31% in 2020, RBC said.

Surgeons estimate that the current da Vinci capacity utilization rate at their hospital or practice is 58%, saying it is somewhat easy to get regular access to a da Vinci robot. Da Vinci capacity utilization is forecast to reach 65% in 12 months, RBC said.

RBC is bullish on the future of robotics in general surgery. It rates Intuitive Surgical stock as sector perform and TransEnterix stock as outperform.

“Longer-term, our survey indicates that the growth of the U.S. robotics market should support multiple players, including TransEnterix, Medtronic (NYSE:MDT), and Johnson & Johnson (NYSE:JNJ),” Henry said. “We expect TRXC’s SurgiBot to be the next robot to enter the U.S. market.”

The TransEnterix SurgiBot robot is likely to get FDA approval in the first quarter of 2016, Henry said.

RBC interviewed about 50 surgeons for its report. Of those, 40% were general surgeons, 40% colorectal specialists and 20% thoracic specialists.

See More – Source: Robotic Surgery Poised For Fast Growth, Survey Shows – Investors.com

BY PATRICK SEITZ, INVESTOR’S BUSINESS DAILY

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