Exploring the robotic surgery market: specialists expect growth on 17,6% in year

Изучаем рынок роботохирургии: специалисты ждут рост на 17,6% в год

People seek to replace the concept of "human factor" with the introduction of artificial intelligence. This is mainly done to save time., This is mainly done to save time..

Some sectors are in the experimental stage, e.g. automotive, where so far they are only trying to introduce unmanned vehicles. But the medical industry has long jumped into the future., and s 1985 For the year, companies have been actively producing devices for robotic surgery.

The introduction of such devices for operations is no less important., than the development of unmanned vehicles: surgeons, as well as drivers, prone to fatigue, and the price of a mistake is often the patient's life.. Robotic surgeons eliminate the human factor, their hands don't shake, they don't worry, and at the end of the shift will not fall off their feet.

In addition to social benefits, this sector is also of interest to private investors., as they see in it great prospects for the development of artificial intelligence. Let's assess the opportunities and risks of the robotic surgery market, to understand, where to invest money and is it worth doing in principle.

How the market for robotic surgery is developing

The main reason for the active development of this sector is the possibility of surgical intervention at a distance. First, who evaluated this efficiency, was the US Army. Then, on her order, a system was developed, which made it possible to deliver a wounded soldier to the nearest vehicle with robotic equipment. It was controlled at a distance by a surgeon from a mobile hospital., therefore operations are faster, and the chances of survival of the wounded have increased markedly..

As a result, this type of surgery has become rapidly used in hospitals in the United States and Europe to reduce the risk of injury during standard operations.. Robots are mainly used for gynecological, urological, orthopedic and neurosurgical types. That is, there, where surgeries involve minimally invasive interventions through tiny incisions in the skin. This procedure requires special control and concentration., what a person is sometimes incapable of.

In practice, the picture usually looks like this. Robot surgeon makes small incisions on the skin and operates on the patient, using tongs and three-dimensional camera. Through the camera at this time, the surgeon sees the entire area of action and using a computer console., as in a video game, controls the robot. And himself robot converts the surgeon's movements into his own. With the help of such a robot, all major types of operations can be performed, and the recovery period will take a minimum time of up to two days.

The pandemic has negatively affected the entire medical industry. Many hospitals and clinics have been instructed to stop routine patient visits and surgeries., to avoid infection. As a result, the number of all operations, including robotic, fell all over the world.

IN 2021 the surgical robot market has begun to recover and is now being valued at 6,1 billion US dollars, and its average annual growth rate, according to forecasts, amount to 17,6% to 2026 of the year. North America holds the largest share in this segment — 52%, but Asia and the Pacific is expected to have the highest growth rate — 18,5% in year.

which ultimately helps save money

chronic diseases.
Worldwide, about one in three adults suffer from multiple chronic diseases.. Among all types of ailments, heart disease is the most common., stomach and respiratory tract. These operations provide for the possibility of minimally invasive intervention, which means, and Robotic Surgery.

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Growing Number of Ambulatory Surgery Centers – ASC.
Ambulatory Surgery, or, what is it called, "one day surgery", allows you to operate on a person and send him home on the same day. It's convenient for everyone: and the patient, and clinic.

A study in the Us showed, that thanks to the ASC, the state's costs to cover operations decreased by 2,6 billion dollars a year compared to surgeries in a regular hospital unit. The cost of treatment in such centers is lower due to the lack of hospitalization. Thanks to this ASC, especially in the USA, actively purchase advanced robotics for operations.

Active penetration of artificial intelligence.
Volume of the global software market, where artificial intelligence algorithms are used, in 2021 year will reach 51,5 billion, increasing by 21,3% compared to 2020 year. This data in November 2021 year published in the research company Gartner. In the course of a survey conducted by analysts 48% heads of organizations said, that they are already introducing artificial intelligence and machine learning technologies or plan to do so in the near future 12 Months.

Implementation of 5G networks.
Because of the coronavirus situation, it became clear, that the health care system is very dependent on the Internet. A key requirement for remote surgery is high throughput with fast data transfer without delays.

5G networks transmit data to 20 times faster than previous generation networks. Expected, Remote surgery will be able to be used more often in everyday medical care thanks to the extremely high bandwidth of 5G, ultra-short delay, high mobility, availability and reliability.

How the market for robotic surgery is developing

Operations using robots are more expensive, than usual.
Many hospitals simply cannot afford the introduction of such technologies.. Da Vinci System, one of the most popular, stands from 1,5 million to 2,5 US$ million. Besides, the annual cost of maintenance of the robot is approaching 125 thousands of U.S. dollars, which further increases the cost.

The cost of one robotic operation is 3-6 thousand. This, As expected, will hold back the growth of the market, until cheaper analogues appear on it. Probably, it will happen after 2022 of the year, when most patents expire from the market leader Intuitive Surgical.

Lack of qualified personnel and costly education.
Minimally invasive intervention is a very complex procedure. Surgeons compare such operations to assembling a ship in a bottle with chopsticks..

The fact, that instruments are inserted into the body through a hole not larger than a centimeter in diameter, and the distance between the working end and the handle is 30 cm, which increases tip jitter.

Besides, fulcrum effect occurs: when the tool handle is moved down, the tip rises and vice versa. As a result, the surgeon performs all his actions as if in a mirror image.. This is very tiring for the surgeon and complicates his training.. Sometimes you need to spend from 150 to 250 Training Operations, to master new technology. At the same time, at the training stage, robotic surgical operations will take twice as much time., than usual.

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Another difficulty is that, that the robot does not transmit tactile sensations. During conventional open surgery, the surgeon relies on his own touch., to distinguish one type of fabric from another or to gently tighten the seam.

Security and Permissions.
A single failure in the work of a robot surgeon can cost a patient his life. Therefore, companies rarely resort to unproven technologies and each time they hedge their bets., through countless trials. However, the FDA — the primary medical licensing authority in the U.S. — is not easy to convince., and the approval process could drag on for years to come.

This makes the development very expensive and time-consuming.. And if you need to conduct an operation in another country, then you need to get permission again. That's why, for example, Intuitive Surgical has more 70% revenue comes from the U.S..

And licensing authorities are constantly demanding to prove the usefulness of robots for patients.. Understandably, that it can make life easier for surgeons, but will this type of operation be so useful for patients or is it still more convenient to use conventional surgical instruments?

Where can you invest

List of main beneficiaries of this market, available to unqualified investors, is presented in the table below. Undisputed market leader, which dominates it already 20 years, — Intuitive Surgical Company. As well as companies, which are just beginning to expand their expansion, — Stryker and Medtronic.

Such giants are gradually entering this market., like Johnson & Johnson: the company acquired the manufacturer of medical robots Auris Health. Besides, Johnson joint venture was established in this area & Johnson and Alphabet called Verb Surgical.

Main beneficiaries of the market

P / E P / E Forecast P / B Average profit growth rate as a percentage per 5 years Profit Margin
Intuitive Surgical 70 59 11 11,23% 31,14%
Stryker 53 26 7 7,61% 11,4%
Medtronic 30 17 2,66 0,82% 14,88%

Intuitive Surgical

Intuitive Surgical is originally from California. She designs, manufactures and sells the Da Vinci surgical system and related instruments and accessories.

This system was one of the first to be approved by the FDA.. To date, "Da Vinci" is used by surgeons in all 50 U.S. states and 67 countries of the world to perform more 8,5 million transactions.

The company's activities are divided into three segments:

  1. Devices and accessories — 56,4% of net proceeds.
  2. Systems — 27%.
  3. Services - 16,6%.

In the U.S., the company receives 71%, the rest is outside of America.

Perspectives.
The company is successfully developing its ecosystem. To improve the convenience of surgeons, My Intuitive was developed - a mobile application, allowing surgeons to monitor the operation of the Da Vinci system from anywhere.

The company held split 1 to 3, and as a result, its shares became more accessible to private investors. Sales in China and Japan are actively developing.

The company is very expensive in terms of multipliers, forward P / E = 59 vs. sector average 31. It has the highest growth rate among competitors due to the large number of customers, approved patents and sources of income.

Stryker

The company is founded in 1941 headquartered in Michigan. Stryker serves customers across three segments:

  1. Orthopedic products — 37% of total revenue. The products consist mainly of implants, used in hip and knee replacements.
  2. MedSurg — 42%. Includes surgical equipment and surgical navigation systems.
  3. Neurosurgical products – 21%.
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In the US, the company makes 73%, the rest is abroad.

Perspectives.
Company with 2013 Of the Year Applies Mako Robotic Equipment Technology to Perform Joint Replacement Surgeries. And in 2021 Year Stryker Acquires Verasense Intraoperative Sensor Technology, to improve the work of robots. The Mako system allows surgeons to flexibly adjust and customize implants, and then operate with high precision.

As a result, with 2019 in May 2021 the number of operations with Mako has increased since 300 thousand to 500 thousand. Expected, what to 2030 Year, the total number of knee replacements in the U.S. will increase by 673%, in this case approximately 30% of patients dissatisfied with traditional surgery. This opens up great opportunities for Stryker technology..

In October 2021 The company announced the establishment of a research laboratory in Australia – in Queensland. Stryker receives multimillion-dollar grant from government to advance disease science and robotics.

Medtronic

European company headquartered in Dublin. One of the largest manufacturers of medical equipment worldwide. Serves customers in four segments:

  1. Cardiovascular diseases — 36%. The company designs and manufactures pacemakers for patients.
  2. Medical-surgical sector — 29%. The company offers treatment services to clients, including minimally invasive method, respiratory and gastrointestinal organs.
  3. Neurology — 27%. The company supplies surgical equipment for use in neurosurgery and spinal surgery.
  4. Diabetes – 8%. For people with diabetes, Medtronic launches the Paradigm series of insulin pumps, as well as consumables for them and the Guardian continuous glucose monitoring system.

Geographically, revenue is very diversified: 51% belongs to the USA, the rest is for other countries.

Perspectives.
Technology for diabetic patients is also a growing sector, insofar as, according to WHO, in the world the number of cases is 422 million people. This 5% of the world's population. Forty years, the incidence has quadrupled, diagnosed every ten years 10 million people. If the rate of increase in the incidence remains the same, the flow 2030 the year the sick will be more than 500 million people.

IN 2019 the year the company bought the Israeli manufacturer of surgical robots Mazor Robotics and introduced its own robot assistant for operations on the spine.

IN 2021 the company has received approval from European licensing authorities for the use of its Hugo operating system. To date, in Europe only 2% procedures performed with the help of robotic surgeons, therefore, the company can significantly increase its presence in this region. This product has not yet been approved in the U.S..

The company increases investments in the development of new products. R costs&By the end of the last reporting period, D had reached its highest level in five years — 2,7 billion dollars.

conclusions

It is possible to note favorable forecasts for the growth rate of the sector as a whole and great interest in it from large companies.. As long as these predictions come true, companies will make major acquisitions, introduce new technologies and develop new markets.

The industry will become more competitive, than now, therefore, it is necessary to closely monitor the growth rate of individual companies, in which you decide to invest. In the reports, be sure to pay attention to the dynamics of sales, proceeds, profit and development of new products.

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