… After months of negative news about poorly trained surgeons, class action suits claiming misleading communications with shareholders, an FDA review, a product recall, an article saying that procedure costs were too high, particularly for gynecological operations, and an NBC exposé, the news finally effected the company’s earnings and its stock. It dropped 16% on July 9th and another 7% yesterday.
… The FDA observed two problems and asked Intuitive to take additional steps to resolve those concerns. Intuitive is doing so.
… But the biggest driver of the stock drop is the article which said that gynecological uses of the da Vinci system cost $2,000 more per procedure than alternative methods. That got hospitals to stop and reevaluate their purchases and that is what is showing up in the earnings reports.
… Although quarterly net income rose 3% to $159.1 million, and revenue grew 8%, to $578.5 million, Wall Street had expected stronger results. The particularly bad news reflecting the gynecological uses of the systems hit sales: sales of the da Vinci system fell to 143 from 150 a year ago, and US sales declined to 90 from 124. This trend is expected to continue for the rest of 2013.
…UPDATE July 27: Two new political setbacks: (1) The FDA recalled 30 systems because they may have been tested improperly and (2) Another court case is looming: A small piece of a needle clip broke off during a recent surgery and remained lodged in internal tissue. “If they would have just taken an X-ray right after the surgery, or really examined all of the instruments, it could have been prevented,” the patient told a local news outlet.