intuitive surgical investor presentation 110515
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Investor Presentation Q4 2015
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Forward Looking Statement
These slides and any accompanying oral presentation by
Intuitive Surgical, Inc. contain estimates and forward-looking
statements. Actual results may differ materially from those
expressed or implied as a result of certain risks and
uncertainties. These risks and uncertainties are described in
detail in the Companys Securities and Exchange Commission
filings.
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Risks
Serious complications may occur in any surgery, including da
Vinci Surgery, up to and including death. Individual surgical
results may vary. Patients should talk to their doctor to
decide if da Vinci Surgery is right for them. Patients and
doctors should review all available information on non-
surgical and surgical options in order to make an informed
decision. Please also refer to
http://www.daVinciSurgery.com/Safety for Important Safety
Information.
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Contents Outline
Company Overview & Business Model
Business Review
Opportunities & Catalysts for Growth
Corporate Assets & 2015
Priorities
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Corporate Overview and Business Model
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Corporate Overview Founded in 1995, IPO 2000
Over 3 million da Vinci procedures performed to date
Approximately 570,000 da Vinci procedures performed in 2014
Q3 YTD 2015 da Vinci procedures up approximately 14%
Q3 YTD 2015 Revenue up 12%
3,477 da Vinci System installed base as of 9/30/15
2,344 United States, 586 Europe, 547 Rest of World
Numerous FDA and International Regulatory Clearances
Primary Markets - Urology, Gynecology, General Surgery, Cardiothoracic
.
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Annual Service Agreement $100K - $170K/Year 2014 Rev = $429M
da Vinci Surgical System
$0.6M - $2.5M
2014 Rev = $633M
Instruments &
Accessories
$700-$3,200
per procedure
2014 Rev $1,070M
Recurring Revenue Model
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Annual Service Rev Per System
da Vinci Surgical System ASP
Inst & Accy Rev Per Procedure
2014 Range of Pricing to Meet Multiple Segments
$0.6M
$170K $100K
$3,200 $700
$2.5M
da Vinci Si-e
Single-Site
Dual Console Xi Firefly
Endowrist Vessel Sealer Stapler
Typically Benign Typically Cancer
2014: $1.5M
2014: $1,880
2014: $140K Dual Console Xi da Vinci Si-e
Includes company estimates and approximate ranges
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Advanced Platforms Surgeon & Staff Training
Imaging Technical Support
Advanced Instruments
Clinical Support
Clinical Validation Data Analytics & Genesis
da Vinci Ecosystem
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Business Review
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Areas of Strength
Procedure growth U.S. general surgery, U.S. mature procedure patient trends, and international
Expanding da Vinci Xi market and platform
Japan Clearance End of Q1 15
Phase 2 instruments shipping Q2 15
Xi Table motion CE marked and FDA submission in Q2 15
Xi Single-Site FDA submissions Q3 15
Stapler
Increasing utilization in da Vinci procedures
30mm 510(k) submission Q3 15
Challenges
Gross margin pressure FX headwinds; new product costs
Q3 YTD 2015 Commentary
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Annual Worldwide Procedures
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2009 2010 2011 2012 2013 2014 2015
Urology Gynecology General Surgery Other
Company Estimates
2015 Guidance: 13-14% Growth
2014: 9% Growth
Company estimates
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U.S. Urology Procedures
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2006 2007 2008 2009 2010 2011 2012* 2013 2014
Prostate Kidney Other
Company estimates
* U.S. Preventive Services Task Force Recommends Against PSA testing 5/2012
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050,000
100,000
150,000
200,000
250,000
2009 2010 2011 2012 2013 2014
Benign Hysterectomy Malignant Hysterectomy Other
U.S. Gynecology Procedures
Company estimates
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U.S. General Surgery Procedures
0
20,000
40,000
60,000
80,000
100,000
120,000
2009 2010 2011 2012 2013 2014
Upper GI / HPB Lower GI / Colorectal Other
Company estimates
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Approximately 121,000 procedures performed in 2014, up 20% from 2013;
Q3 YTD 2015 up 26%
Strength in Asia procedures: China, Japan, Korea
Significant investments supporting long term growth
Japan: Buildout of direct sales structure, efforts to obtain additional reimbursements
Europe: Clinical data and analysis, sales coverage
International Performance
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OUS Annual Procedures
Company Estimates
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2009 2010 2011 2012 2013 2014
Europe Asia Rest of World
Company estimates
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da Vinci Xi
Designed for multi-quadrant surgical access
Narrower arms with greater reach
Lighter, slimmer endoscopes that can move between ports
Computer assisted, streamlined set up
Compatible surgical simulator
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Why Xi Matters
Despite my obvious interest in minimally invasive surgery I had resisted adopting previous da Vinci platforms because of what I felt were limitations. The da Vinci Xi platform is a game changer for me. I now feel that this technology will not just equal my standard laparoscopic abilities but actually will allow me to reach new levels in providing surgical care to my patients.
B. Harkins, MD, FACS General Surgeon, Texas
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System Placement Trend
0
20
40
60
80
100
120
140
160
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2014 2015
U.S. Europe Japan Rest-of-World
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System Mix Trend
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q114 Q214 Q314 Q414 Q115 Q215 Q315
S / Sie Si Xi
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Europe
586
USA
2,344
Australia/
New Zealand
37
Japan 215
South Korea 53
China 46
India 35
Taiwan 27
Singapore 7
Thailand 6
Other 9
Installs by Country and Region
Saudi Arabia 14
Israel 7
Qatar 6
Other 9
Brazil 16
Mexico 7
Argentina 6
Chile 5
Venezuela 5
Other 8
Latin
America
47
Denmark 18
Norway 11
Czech Republic 7
Austria 7
Finland 5
Ireland 3
Other 3
Distribution
Italy 84
Turkey 34
Spain 31
Russia 25
Greece 9
Romania 7
Other 11
Direct
France 90
Germany 77
UK 55
Belgium 34
Switzerland 28
Sweden 26
Netherlands 21
Asia
398
Canada
25
Intuitive sells directly to customers in the US, Korea, Japan, and the European countries indicated above. Sales are through distributor partners in all other areas of the world including, Canada, Latin America, the Middle East, Asia and Australia.
South Africa 4
da Vinci System Installed Base
Middle
East
36
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Trended da Vinci System Installed Base
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q310 Q311 Q312 Q313 Q314 Q315
United States
International
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Opportunities and Catalysts for Growth
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Open Surgery Remains Common U.S.
Source: ISI data as well as estimates
Yr: 2004
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prostate MalignantHyst
Benign Hyst
Robotic Other MIS Open
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Open Surgery Remains Common U.S.
Source: ISI Data as well as Estimates
Yr: 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prostate MalignantHyst
Benign Hyst
Robotic Other MIS Open
-
Open Surgery Remains Common U.S.
Source: ISI data as well as estimates
Yr: 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prostate MalignantHyst
Benign Hyst Colorectal VentralHernia
Thoracic
Robotic Other MIS Open
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Open Surgery Remains Common OUS
Source: ISI data as well as estimates. OUS defined as Western Europe, Canada, Australia, South Korea and Japan
Yr: 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prostate MalignantHyst
Colorectal Gastrectomy Thoracic
Other MIS Robotic Open
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Total Procedure Markets
We estimate 2 4 million procedures available for products on the market today in countries for which we have clearances
Over time, opportunity OUS will be greater than U.S.
Roughly half of opportunity based on underlying cancer as cause
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Clinical and Economic Validation Overview of the Database
To date, there are approximately 9,500 peer-reviewed clinical publications studying da Vinci use
Approximately 99% of these studies are independent of ISI
Of these, approximately 1,400 are comparative studies
In 2014, 1,600 new studies were published, of which ~400 were comparative
There are now approximately 25 government sponsored assessments of da Vinci surgery spanning ~14 countries
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Which is the right comparison?
Populations Matter (e.g., Rectal Resection)
Laparoscopy
Open Surgery
da Vinci LAR
Mar
ket
Shar
e %
MIS Surgeon Perspective dV vs Lap }
Patient Perspective Open vs MIS }
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Areas of Investment in Clinical and Economic Analyses
U.S. Hernia registry, Gynecologic Oncology registry
Japan Urology and General Surgery
Germany Urology and General Surgery
U.K. Colorectal registry
France Colorectal registry
Numerous economic studies
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ISI Investments to Improve Surgery
Advanced imaging (e.g., Firefly Fluorescence Imaging)
Computer-enhanced precision at tissue (e.g., Smart-clamp for stapling)
Less invasive access (e.g., single-port and natural orifice surgery)
Training technologies (e.g., simulation, dual-console, setup assist)
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Product Milestones Continue da Vinci Xi Launch:
Xi Vessel Sealer launched Q2 14
Xi Firefly launched Q3 14
Clearance in Korea Q4 14
45mm Xi Stapler launched Q1 15
Clearance in Japan end of Q1 15
Xi Table motion CE Marked and 510(k) submitted in Q2 15
Xi Single-Site 510(k) submitted Q3 15
30mm Xi Stapler 510(k) submitted Q3 15
Single-Site wristed needle driver for Si launched Q4 14
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Integration of da Vinci Sp Current Xi Configuration
Deliver technical milestones in 2015 10 Prototypes built Clinical evaluations Transoral and Transabdominal emphasis
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Integration of da Vinci Sp Xi with Sp Patient Cart and Instruments
Deliver technical milestones in 2015 10 Prototypes built Clinical evaluations Transoral and Transabdominal emphasis
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2015 Priorities and
Corporate Assets
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2015 Priorities
Expanding the application of da Vinci in general surgery, particularly colorectal surgery and hernia repair
Filling out our product line for da Vinci Xi and launching in key markets globally
Developing our organizational capabilities and markets in Europe and Asia
Advancing our technologies to improve surgery
Lowering our direct product costs
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Extraordinary people
3,477 da Vinci System installed base 9/30/15
Numerous FDA and international regulatory clearances
Extensive instrument and accessory product line
Intuitive Surgical training centers worldwide
Ownership of or exclusive rights to over 1,900 U.S. and foreign patents and more than 1,500 US and foreign
patent applications
da Vinci patient awareness
Corporate Assets
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