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Intuitive Surgical

Intuitive Surgical. $ by Darrin Scilley. Sector Components. Managed Care Facilities Biotechnology Pharmaceuticals Healthcare Products and Supplies. Sector Analysis. Facilities  eliminated Decreasing revenues + Increasing costs Pharmaceuticals  eliminated Slowing growth

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Intuitive Surgical

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  1. Intuitive Surgical $ by Darrin Scilley

  2. Sector Components • Managed Care • Facilities • Biotechnology • Pharmaceuticals • Healthcare Products and Supplies

  3. Sector Analysis • Facilities  eliminated • Decreasing revenues + Increasing costs • Pharmaceuticals  eliminated • Slowing growth • Biotech  possible • High growth, but FDA/legal hurdles • Managed Care  possible • Rising GDP = rising costs • Possible Medicare/Medicaid penetration • Medical Products and Supplies  likely • High growth, recession resistant

  4. Selection Process • Debt Maturity • Leverage • Multiples • Historical Growth

  5. Multiples  Forward Mutliples

  6. Expected Return

  7. Who is ISRG?

  8. Who is ISRG? • 205,000 procedures in 2009 • Up 51% from 2008 • Revenue $1,050M, up 20% from 2008 • Operating Profit $377M, up 21% from 2008 • 71% Gross Margin, 36% Operating Margin • $1,171M Cash • 25% Mkt Cap  9% Mkt Cap

  9. ISRG’s Fit in Healthcare • Healthcare Keys to Success • New/existing product innovation • International expansion • Form strategic alliances • Lower managed care costs • Improve patients’ lives • How ISRG fits • Pioneers of RAS/MIS • See international map • Numerous acquisitions/partnerships • ROI 20%-30%+ • 3-4 year payback period • Inpatient  Outpatient conversion • Decreased length of stay • Decreased nursing/staffing • Decreased blood loss/complications • Improved patient satisfaction

  10. Risk Factors • Competition • Economic/political environment • Continued market acceptance • Malfunctions • Single Source Suppliers

  11. Valuation Key 1: Revenue

  12. Procedures

  13. Adoption Curve

  14. International Adoption

  15. Revenue Split

  16. Key Driver 2: Market Share

  17. Scenario Analysis

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