Research Firm Citron Predicts Stock Decline for Intuitive Surgical

Investment analysis firm Citron Research published their latest report on da Vinci robot manufacturer Intuitive Surgical, Inc. this January. The in-depth review examined several key factors that have negatively impacted the company’s earnings, including more than 4,600 reports of da Vinci surgery complications submitted to the FDA.

The firm outlined the financial consequences that Intuitive faces in light of mounting da Vinci robotic surgery injury lawsuits, claims of poor surgical training and insufficient evidence that da Vinci procedures offer any benefits over traditional surgery. According to Citron, Intuitive has hit a brick wall, and the firm’s analysts predict a continued decline in stock prices over the next 18 months. Company shares which were once $590 may plunge to $250 in the coming year, according to the firm’s analysts.

Deaths reported in da Vinci robotic surgery injury lawsuits

Among the statistics cited in the report are adverse events in the MAUDE database, the FDA’s Manufacturer and user Facility Device Experience log which tracks medical device malfunctions and adverse outcomes. According to Citron’s analysis of 4,600 adverse reports involving the da Vinci surgery system, a large proportion of complications arose in what should have been routine procedures. In addition, Intuitive Surgical was found to add their own narratives to the FDA database, implying that the da Vinci surgery complications had nothing to do with the malfunctioning of the robot, and were isolated incidents. Citron says that Intuitive’s comments were “attempts to exonerate the da Vinci by stating a complete denial of the obvious.”

In one of 89 deaths cataloged in the MAUDE system, the event reads: “It was reported that post a successful da Vinci hysterectomy procedure, the patient developed an infection and was not discharged as planned. Ten days post op, the patient was given a blood thinner and expired due to an arterial bleed. Reportedly, the patient’s demise was unrelated to the da vinci surgical system.”

Intuitive denies any liability for injuries and deaths

The Citron review points out that the FDA MAUDE database is entirely comprised of voluntary entries, and there is no real incentive for Intuitive Surgical or health care providers to submit adverse events to the system. As such, according to Citron’s argument, the database will never accurately reflect or contain all of the injuries, complications and fatalities associated with da Vinci robot surgery.

Citron cautioned, “After surveying patterns in these 4,600 MAUDE records, as we became deeply disturbed at abuses of the da Vinci machine, we also became disturbed by the abuses of the MAUDE database itself.”

The report continued by stating, “We see many cases in which, as soon as the risk of legal liability emerges in a case, the hospital stops providing further information about the patient outcome and post-failure inquiry findings.”

When the bulk of da Vinci surgeries such as prostate removal or hysterectomy are supposed to be routine, even one reported death is too many, Citron says. The most recent death of a patient was entered in December 2012, and records show at least 89 fatalities in total, though two appear to be duplicate entries.

The most commonly reported complications in the MAUDE database correspond with those alleged in da Vinci robotic surgery injury lawsuits filed throughout the nation. Organ perforations, lacerations, tears to blood vessels and arteries are followed in prevalence by electrocautery burns, or burns from electrical discharge.

Citron predicts Intuitive will face dire financial consequences

Citron’s January 2013 report was part two in their ongoing investigation of Intuitive. Their first review, which looked at the growing litigation against the company, was published in late December. Their latest analysis wrapped up by stating that Intuitive “will have increasing difficulty compensating for revenue growth shortfalls with new procedures. In at least one now-unspecified quarter in 2013, it is Citron’s opinion that a revenue disappointment will hit, and the company’s stock will immediately seek a new multiple – at least 1/3rd below today’s lofty price.”

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