Medical Design Briefs - November 2023 - 13

which are relatively high. Once you
come off the drugs, you tend to put the
weight back on. Once the weight back
goes back on, you can imagine patients
still want to treat their obesity and come
back to surgery pipelines. "
For longer term impacts, Samath
said Intuitive has seen analysis that says
it could be complementary to bariatric
surgery. They've also seen hypotheses
that GLP-1s positively impact overall
surgery volumes.
" Lower BMI means you have more
candidates for surgery that wouldn't otherwise
have been. So, for us, this is an
area that we're going to watch carefully.
It's an important market for us obviously,
but it's too early to tell what the longerterm
impacts are going to be.
Based on the market data Intuitive has
seen and what they company sees in its
own numbers, he noted there are varied
analyses on what the impacts will be.
Capturing Economics
" We believe the ecosystem is the basis
of competition, and we think we have a
wide moat with respect to the comprehensiveness
and capability in our ecosystem, "
said Samath. " When we think
about adding to the ecosystem, first
question is: 'Can we be differentiated
relative to the alternative?' And if we
can, second question is, 'What return
generate by developing that ourselves?'
If we can be differentiated and generate
a return, then we would put it in our
R&D pipeline and stack it up in terms of
relative priority. If we can't be differentiated,
then we'd look to partner, " he said.
Margins. In 2022, Intuitive reported about
35 percent of margin, which remained
steady in Q2 2023. Intuitive has no management
objective to be above 40 percent.
" In the nearer term, we think our margin
is choppy. We have a set of accumulated
stresses from the pandemic that
are in our global operations impacting
gross margin, " he said. He noted that
they have " some work to do " with respect
to the product cost structure in
Ion, because gross margins there are diluted
to corporate averages.
" So that set of activities within gross
margin is impacting operating margin,
and that will take us some time to work
through. We do have significant CapEx
this year that will turn into depreciation
next year. Those are longer term investments,
particularly for facilities and
Medical Design Briefs, November 2023
www.medicaldesignbriefs.com
13
manufacturing capacity. So they have a
period of underutilization with respect
to their depreciation expense. "
Intuitive expects to leverage its enabling
functions next year. The company
has an expectation that it can get to
gross margins of 70 percent over time,
Samath said, and that will lead to operating
margins above 35 percent over
time. However, the robotics giant is not
ready to put a timeline on it, in part because
of the environment the company
finds itself in and the set of activities
and actions that must be executed.
This article was written by Sherrie
Trigg, Editor and Director of Medical
Content. She can be reached at sherrie.
trigg@saemediagroup.com.
http://sherrie.trigg@saemediagroup.com http://info.hotims.com/84485-750 http://www.medicaldesignbriefs.com
Medical Design Briefs - November 2023

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