Intuitive Surgical Inc. saw its stock plunge the most in almost five years as sales slowed for its da Vinci surgical robot system.
Intuitive stock fell 18 percent to $411.89 on Monday, after declining to $410 in the biggest intra-day drop since October 2008. The Sunnyvale, California-based company’s shares had decreased 9.3 percent in the 12 months through yesterday, Bloomberg News reports.
In the second quarter, the company sold 143 da Vinci Surgical Systems, generating about $215 million, compared with $229 million from 150 systems a year earlier, the company said yesterday in a statement. The reduced demand results from pressure to cut hospital costs and slower growth in gynecologic procedures using robotic surgery, the company said, according to Bloomberg News. Prostatectomies, hysterectomies, and gall bladder removals are among the most common procedures conducted with the robots, which cost about $1.5 million each.
The da Vinci system, used in more than 1,300 U.S. hospitals, is the company’s primary product and has been the subject of negligence lawsuits alleging that patients were injured during surgeries with the device. Bloomberg News reported in February that the U.S. Food and Drug Administration (FDA) is surveying surgeons about the robots following a rise in adverse event reports that include as many as 70 deaths since 2009. The reports don’t necessarily mean the robots caused the deaths, only that they were involved in procedures in which deaths occured.
Some of the lawsuits brought against Intuitive question the adequacy of the training surgeons receive before attempting robot-assisted procedures unsupervised. After 2006 Intuitive simplified the training process from the stricter requirements in its 2000 application to the FDA for device approval. Surgeons have also been debating whether the benefits of robotic surgery justify the increased costs. The Journal of the American Medical Association reported in February that hysterectomies performed robotically cost hospitals about $2,189 more than hysterectomy surgery performed without the robot, without reducing complications.