Description
Intuitive Surgical, Inc. is an American corporation that develops, manufactures, and markets robotic products designed to improve clinical outcomes of patients through minimally invasive surgery, most notably with the da Vinci Surgical System. The company is part of the NASDAQ-100 and S&P 500. As of December 31, 2019, Intuitive Surgical had an installed base of 5,582 da Vinci Surgical Systems, including 3,531 in the U.S., 977 in Europe, 780 in Asia, and 294 in the rest of the world.
History
The research that eventually led to the development of the da Vinci Surgical System was performed in the late 1980s at a non-profit research institute SRI International. In 1990, SRI received funding from the National Institutes of Health. SRI developed a prototype robotic surgical system that caught the interest of the Defense Advanced Research Projects Agency (DARPA), which was interested in the system for its potential to allow surgeons to operate remotely on soldiers wounded on the battlefield.
In 1994, Dr. Frederic Moll became interested in the SRI System, as the device was known at the time. At the time, Moll was employed by Guidant. He tried to interest Guidant in backing it, to no avail. In 1995, Moll was introduced to John Freund, who had recently left Acuson Corporation. Freund negotiated an option to acquire SRI's intellectual property, and incorporated a new company that he named Intuitive Surgical Devices, Inc.
At that point Freund, Moll, and Robert Younge (also from Acuson) wrote the business plan for the company and raised its initial venture capital. Early investors included the Mayfield Fund, Sierra Ventures, and Morgan Stanley.
The company refined the SRI System into a prototype known originally as "Lenny" (after the young Leonardo da Vinci), which was ready for testing in 1997. As the company's prototypes became more advanced, they were named using da Vinci themes. One was named "Leonardo", and another was "Mona". The final version of the prototype was nicknamed the da Vinci Surgical System, and the name stuck when the system was eventually commercialized. After further testing, Intuitive Surgical began marketing this system in Europe in 1999, while awaiting FDA approval in the United States.
The company raised $46 million in an initial public offering in 2000. That same year, the FDA approved use of the da Vinci Surgical System for general laparoscopic surgery, which can be used to address gallbladder disease and gastroesophageal disease. In 2001, the FDA approved use of the system for prostate surgery. The FDA has subsequently approved the system for thoracoscopic surgery, cardiac procedures performed with adjunctive incisions, and gynecologic procedures.
Shortly before going public, Intuitive Surgical was sued for patent infringement by Computer Motion, Inc, its chief rival. Computer Motion had actually gotten into the robotic surgery field earlier than Intuitive Surgical, with its own system, the ZEUS Robotic Surgical System. Although the ZEUS system was approved in Europe, the U.S. Food and Drug Administration had not yet approved it for any procedure at the time that the FDA first approved the da Vinci system. The uncertainty created by the litigation between the companies was a drag on each company's growth. In 2003, Intuitive Surgical and Computer Motion agreed to merge, thus ending the litigation between them. The ZEUS system was ultimately phased out in favor of the da Vinci system. Computer Motion was led by Chairman Robert Duggan from 1990 until 2003, when the two companies merged.
Before the buyout of Computer Motion, the stock of Intuitive was selling at around $14 per share, adjusted for stock splits. After the merger, the stock price rose significantly (and by 2015 it was at about $500), primarily because of the growth in systems sold (60 in 2002 compared with 431 in 2014) and the number of surgical procedures performed (less than 1,000 in 2002 compared with 540,000 in 2014).
