http://www.morningstar.com/earnings/47576566-intuitive-surgical-inc-isrg-q4-2012.aspx

Intuitive Surgical Inc ISRG
Q4 2012 Earnings Call Transcript

Transcript Call Date 01/22/2013

Positive surgical margins were 2.9% in the da Vinci cohort as compared to 5.9 for laparoscopy. The overall Trifecta rate was significantly higher in the da Vinci cohort at 58.7% as compared to 31.6% for the laparoscopic group. These findings let to the author's conclusion, and I quote, 'our large analysis shows that robotic partial nephrectomy offers a wider range of indications, better operative outcomes and lower perioperative morbidity compared to laparoscopic partial nephrectomy.' Overall, the quest for Trifecta seems to be better accomplished by robotic partial nephrectomy, thus likely to become the new standard technique for minimally invasive partial nephrectomy'.

Once again the activity is category of GYN contributed greater total procedure growth than any specialty we serve. da Vinci sacrocolpopexy volumes trails only da Vinci hysterectomy within this specialty and it continued its solid growth during the year. In a recent addition of female pelvic medicine and reconstructive surgery, physicians from the University of South Florida reported the results of their 164 patients study comparing da Vinci sacrocolpopexy to open sacrocolpopexy. This retrospective study focused on cost, operative time and the length of stay for each group. Within this study, both system cost and maintenance cost were considered and included. The authors report that the median operative time for open sacrocolpopexy and da Vinci Sacrocolpopexy was 166 minutes and 212 minutes respectively. Estimated blood loss averaged 150 milliliters in the open sacrocolpopexy as compared to just 50 milliliters within the da Vinci patient cohort.

Length of stay for the da Vinci group averaged two days as compared to three days for the open sacrocolpopexy group. However, 48% of the women treated within the da Vinci group experienced a length of stay of less than 24 hours as compared to just 1% for the women undergoing an open sacrocolpopexy. The median direct cost reported for the da Vinci group was $6,668 as compared to $7,804 for the open group. The overall cost reported for the robotics group was $9,725 as compared to $12,485 for the open sacrocolpopexy group, with similar readmission rates at 30 days post op. The authors stated that while da Vinci sacrocolpopexy took slightly longer to perform than in open sacrocolpopexy, both the direct and indirect cost for the da Vinci sacrocolpopexy was less than for open sacrocolpopexy.

This concludes my remarks, and I'll now turn the time over to Calvin.

Calvin Darling - Senior Director of Finance: Thank you, Aleks. I will be providing you with our financial forecast for 2013, including procedures, revenues, and other elements of the income statement on a GAAP basis. I will also provide estimates of significant non-cash expenses to provide you with visibility into our expected future cash flows.

Starting with procedures, in 2013 we expect procedure growth to be driven by U.S. gynecology, U.S. general surgery, and international dVP procedures. We expect our 2013 total procedures to grow approximately 20% to 23% from the base of approximately 450,000 procedures performed in 2012.

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