TransEnterix now has regulatory clearance to bring its surgical robot to the market, but don’t expect to see surgeries performed with the technology in U.S. hospitals for at least a year, perhaps longer.
Hospitals need four to six quarters to work through purchasing decisions for new capital equipment, says CEO Todd Pope. In the meantime, Research Triangle Park, NC-based TransEnterix (NYSE MKT: TRXC) is gearing up for medical conferences, building its sales staff, and preparing a Florida site that will be used to train surgeons on the new system.
Pope’s comments came during a Tuesday morning conference call with analysts to discuss the FDA clearance announced last Friday for the Senhance Surgical Robotic System, TransEnterix’s system for minimally invasive surgery, also called laporoscopic surgery. The FDA decision marks the first robot cleared for laparoscopic surgery in the U.S. since the 2000-2002 period when Sunnyvale, CA-based Intuitive Surgical (NASDAQ: ISRG) and Computer Motion competed with their respective FDA-cleared robotic-assisted surgery device platforms. The two rivals merged in 2003.
Senhance is the robotic surgical system that TransEnterix acquired in 2015 from Italy-based SOFAR in a cash and stock deal valued at $99.8 million. SOFAR had already secured regulatory clearance in Europe for the robot. The Senhance system, which under SOFAR was called ALF-X, helps surgeons via robotic arms affixed with instruments. Surgeons sit at a console and move the arms using hand-held controls. The system incorporates haptic feedback that gives surgeons better sense of touch, and a vision system that tracks the surgeon’s eyes, which avoids the need for someone else to operate a camera.
TransEnterix planned for Senhance to complement SurgiBot, a robotic surgery system that TransEnterix had developed in-house. At the time of the deal with SOFAR, Pope said the SOFAR robot would give TransEnterix a foothold in the European market while SurgiBot anchored the company’s U.S. ambitions. But in April 2016, the FDA rejected SurgiBot, leaving soon-to-be renamed Senhance as TransEnterix’s only robotic system.
On Tuesday, Pope offered a little more detail about the Senhance clearance. The decision covers colorectal surgery and gynecologic surgery, encompassing a total of 23 procedures. That gives TransEnterix access to 1.3 million procedures performed in the U.S. each year, Pope said. TransEnterix chose colorectal and gynecologic surgeries because the company had data on those procedures. Pope said the company plans to seek clearance for additional procedures as hospitals in Europe produce more data that can be used in future submissions to the FDA. He expects the company will start receiving decisions on those submissions in the first half of next year.
Intuitive Surgical remains the juggernaut in robotic surgery: the company reported more than $2.7 billion in 2016 revenue, with 72 percent of those sales coming from the U.S. Like Senhance, Intuitive’s da Vinci Surgical System is cleared for colorectal and gynecologic procedures, among other types of surgery. But Pope has continued to insist that TransEnterix won’t compete head to head against Intuitive. He told analysts that the regulatory clearance for Senhance is a “big day for robotics in general,” part of a broadening of the field for many companies.
“As you look across the landscape, this is going to be one of the fastest growing segments of medtech,” Pope said. “We’re excited to be part of that.”
Other companies aiming to launch robotic surgical systems include Toronto startup Titan Medical (TSX: TMD), and medical device giant Medtronic (NYSE: MDT), which aims to enter the market via a partnership with Israel-based startup Mazor Robotics. Medtronic has said that it expects to start drawing revenue from its surgical robot in fiscal 2019. Startups continue to develop technologies for this growing market. In August, San Carlos, CA-based Auris Surgical Robots raised $280 million in financing to support development of a robot that could be used in lung cancer surgeries.
Photo of Senhance arms by TransEnterix.