Before you read on, please be aware that the analysis below is my opinion only and may include flawed assumptions and inaccuracy of logic; therefore, caveat emptor applies here.
The possibility of selling the Senhance Surgical Robotic system to a few more well-known medical facilities that may spark the incentive for other medical facilities to follow.
A few more? And why will other follow?
Yes, a few more after Florida Hospital Orlando. Despite the shorts’ position that Florida Hospital Orlando purchase is a non-event, I see it as a bona fide vote-of-confidence by a top rated hospital in the United States! Common sense logic dictates when new technology is made available to create efficiency and improve productivity without increasing overall cost, the resistance to the new technology is further eroded when it is adopted by reputable organizations. Currently, there are about 6 millions procedures that Senhance can take over with better efficiency, stability, and accuracy. Per my thesis I wrote last week, due to the expansion of the aging population, this six million procedures in EU & U.S. will soon explode to many times over while the number of surgeons will not grow fast enough to handle the high volume of patients.
How do you know reputable medical facilities will adopt it before others?
I don’t. But then, the reputable ones are usually the ones who plan ahead instead of waiting to follow. They have the incentive to buy new technology in order to save money and improve efficiency to deal with the coming shortage of surgeons. Hence, if there are more accelerated adoption (I defined this as any order that take less than four quarters for medical facilities to make a purchase decision) in 2018, the probability that they are from reputable medical facilities is better than 50/50 in my humble opinion.
It’s a win/win situation for both the hospitals and the surgeons. The more surgeries each laparoscopic surgeon can perform with the help of Senhance in comfort and ease, the more earnings for both the surgeons and the hospitals. Not to mention that efficiency can also reduce the stress for both hospitals and surgeons from increased demand for laparoscopic surgeries. That is why I believe once you have a few hospitals sign up, be it five or twenty-seven or even fifty, there will be eventual mass adoption to follow suit because there is nothing like seeing your fellow surgeons embracing robotic technology when you are not.
CEO Pope has been emphasizing that the Senhance is designed and tailored to the laparoscopic market and is not a direct competition to the Da Vinci system. While there are some overlap on certain surgeries that both Da Vinci and Senhance can do; there seem to be a whole lot more procedures in the laparoscopic universe. Thus, the obvious attention should be on what the laparoscopic community has to say about the Senhance surgical robotic system. Forget about what the Da Vinci surgeons had to say about the Senhance which the shorts tended to focus their attention on. I already mentioned from my past post (about 3 months ago) that asking Da Vinci surgeons about Senhance is like asking loyal Cadillac owners what they think of the Mercedes Benz. Both are good cars and well-built but they are built for different audience.
If they are both good in their own way, then why would Senhance be considered more a laparoscopic surgical robotic assistant than the Da Vinci?
This is probably the most common question anyone will ask when both robotic systems are involved with minimally invasive surgeries. I’ll start off with advantages that Senhance has over the Da Vinci:
- have haptic feedback
- have “3rd hand” via 3DHD vision controlled via eye-sensing
- have open view of operating room
- perform hybrid surgery with open source ports which allow robotic and traditional lap instruments work simultaneously
- use 5mm and 3mm instruments architecture
- have Trocar placement like standard laparoscopy
- have easy and quick docking time
- easy change of instruments without changing trocars
- easy and quick patient repositioning
- allow 22 reusable instruments (5-10mm) which contributed to responsible economics
- have lower per patient cost compared to the Da Vinci system
- be compatible with hospitals’ existing technological system
- accept other technologies to enhance surgical procedures
As you can see from the list above, these advantages are directly related to the laparoscopic market specifically. The three items above that I underlined separate Senhance as a “true” laparoscopic robotic assistant.
Now take a visual test of the two robotic surgical machines and tell me which one has more flexibility in:
- robotic arms positioning
- patient repositioning
- nurses/supporting surgical team standing position
Let’s look at the Da Vinci below:
Now, take a look at the Senhance below:
Now, can you honestly tell me which one of the machine above has the most flexibility to handle the three type of positioning mentioned above?
The Da Vinci seems to be shouting “Get out of my way! I’m surrounding the patient, not you!” and occasionally will balk at the idea of, “What? You want my arm to bend this low and at what angle? You do know all my arms have restricted movements based on where it attached to, right?”
Meanwhile, the Senhance seems to be saying, “Hey, move me around to suit your needs. I’m flexible because I’ve longer arms and separate legs. The human support team can stand between us anytime!”
Now, let me ask you a simple question. After looking at the pictures of the two robotic surgical systems above, which one do you prefer to work on you?
Before you answer, just remember that the ability to “reposition” you during surgery under the Da Vinci may be limited due to their restricted arm movements. Meanwhile, with the Senhance system, you can be moved around more easily by the surgical team if the repositioning is deemed more effective for the surgeon.
Another point to consider is that during a surgical emergency while using surgical robotic assistant, how easy is it for the surgeon to access the manual lap tools immediately? Senhance has the hybrid setup and the surgeon can choose the best effective position to stand by the operation table if required to do so.
Having said all the above and before I rest my case in support of the Senhance being the better laparoscopic surgical robotic assistant, let me bring up one practicality of the Senhance that will benefit hospitals who buy more than one Senhance system. At any point in time, either during surgery or getting the robot ready for surgery, discovery of a malfunction in one of the robotic arm will be problematic for the Da Vinci. The Da Vinci robot itself becomes unusable until a technician comes to fix or replace the defective arm. This mean lost time in setting up the operation room and necessitate the hassle of either moving the patient to another operation room (highly unlikely in busy hospitals with operation rooms pretty much booked) or moving another Da Vinci robot to the operation room which could be very time-consuming. Meanwhile, with the Senhance, if one arm is broken or become defective, it is easy to borrow another arm from another unused Senhance to continue on with the operation. Not much time is lost and it is quite easy to roll one of the robotic arm from one operation room to another.
Let’s go over what I considered to be “writing on the wall” that Senhance may become the next big thing in surgical robotic assistant for the laparoscopic market:
- Shortage of surgeons is imminent in the coming future
- There are more demand for laparoscopic procedures due to less pain from smaller incisions
- The first commercial unit of the Senhance System in the United States is installed in the Florida Hospital Orlando campus.
- Sales made outside U.S.
- Italy (Q3 2016)
- Germany (Q1 2017)
- Japan (Q2 2017)
- Taiwan (Q3 2017).
- Filed a FDA 510(k) submission to include laparoscopic inguinal hernia and laparoscopic cholecystectomy (gallbladder removal) surgery in the indicated list of covered procedures
- Senhance 3mm lap tools received European CE Mark
- 3mm incisions offered the least post-operative pain which will reduce the need for opiate drug afterward
- Coming to the U.S. once sufficient clinical data is available from Europe for FDA to review and approve.
- Entered into an agreement with Great Belief International Limited (GBIL), to advance the SurgiBot System towards global commercialization
One and two above, shortage of surgeons and preference of laparoscopic surgeries over open surgeries will eventually put the squeeze on the existing laparoscopic surgeons. Florida Hospital Orlando is a top rated hospital so it has to have some pull to generate interest DESPITE the fact that the shorts treated Florida Hospital Orlando purchase of the Senhance as a non-event. Sales to Italy, Germany, Japan, and Taiwan were definitely a start. Don’t forget that interest MUST exist before even ONE Senhance is purchased. With FDA clearance, interest should go up x-times! #5 and #6 created further interest due to more FDA approved procedures being made available to perform using Senhance. Finally, never write-off the SurgiBot in China because the smaller size and relatively lower cost of the SurgiBot, IMHO, is the PERFECT robotic surgical assistant for the country with the most population in the world. I truly believe CEO Pope made a good strategic move with the SurgiBot despite criticism. In a couple of years, SurgiBot may become a big revenue producer for $TRXC.
Remember when Netflix CEO decided to go into video streaming when internet speed was only average and content cost was prohibitively high, not only did he face widespread criticism by investors, stock went down severely as well. And look who is the hero now? Sometimes, you just have to give the CEO the benefit of the doubt that he knows what he is doing even though most of the investors may not see it at the time.
My 2 cents is that once the general awareness that the adoption is imminent simply because there is no other best choice between the two FDA approved Senhance and the Da Vinci, $TRXC price is not going to need the usual “show me the money” crowd to bid up the price, the forward-looking crowd will be the ones to drive the price up with the mass to follow when news of more Senhance sales keep rolling in. My bet is that price will immediately jump way ahead to reflect this massive market ahead. A market with many million more procedures than the Da Vinci can capture.
While some may think a couple of unit sold may not be a big deal to move price but I think this will be the spark that kick off the awareness that a general adoption by the laparoscopic medical community is imminent. A spark that may kick off the gigantic run on $TRXC for years to come.
Technically speaking, price bounced nicely off the three major supports (79MA, Fib 78.6%, and $1.30 LT price support):This week green bar, in my humble opinion, may as well be the second green bar to bounce from the recent correction and begin a long-term uptrend.
Good Luck and may fortune blesses all TRXC investors.
My 2 cents.
From my camera: