Intuitive Surgical's shares plunge after earnings miss, FDA warning

The slide of Intuitive Surgical, maker of the da Vinci robotic systems, continues. Its shares are tanking today after the Sunnyvale company on Thursday reported second-quarter results that failed to meet expectations, and cut its revenue outlook for the year. Its CEO disclosed that the company has received a warning letter from the FDA over product-safety notifications. Reports of surgical injuries are piling up. Earlier this month, the company recalled 30 devices.

CEO Gary Guthart reportedly cited a potential defect in the robot’s surgical scissors, resistance in approval of hysterectomies and bad press as reasons for the company’s slowing growth. In March, we wrote about the rise of lawsuits against the company, and the skepticism of the American Congress of Obstetricians and Gynecologists about Intuitive’s systems.

The Food and Drug Administration records show that injuries involving surgeries with the company’s robots doubled in the first six months of the year, according to Bloomberg.

The company’s shares are off 11 percent to under $376 as of this post. They have fallen about 26 percent in the past couple of weeks, and are down about 36 percent since this year’s closing high of $583.67, reached in February. Erik Gordon, a business professor quoted in the Bloomberg report, said the decline in the company’s market value “is fresh bait for activist investors like Carl Icahn and for strategic acquirers.”

Photo: Rosa Gonzales tests instruments on a completed da Vinci Surgical System at the headquarters and manufacturing plant of Intuitive Surgical in Sunnyvale on Friday, Aug.10, 2012. (Gary Reyes/Mercury News)

Levi Sumagaysay Levi Sumagaysay (3813 Posts)

Levi Sumagaysay is editor of the combined SiliconBeat and Good Morning Silicon Valley. She also helps take care of SiliconValley.com, the Mercury News tech website. Email: lsumagaysay (at) bayareanewsgroup (dot-com).