March 3, 2015 by Brad Perriello
The U.S. Defense Dept. inks a deal worth up to $430 million for Intuitive Surgical’s da Vinci robot-assisted surgery device.
Intuitive Surgical (NSDQ:ISRG) yesterday won a contract worth as much as $430 million from the U.S. Defense Dept. for its flagship da Vinci robot-assisted surgery device.
The 5-year contract covers the da Vinci device plus instruments, accessories and upgrades, according to the Pentagon. Intuitive won out over 34 other bidders, according to the Defense Dept.
Leerink Partners analyst Richard Newitter said that, although the contract isn’t a guarantee of $430 million in business for Sunnyvale, Calif.-based Intuitive, it does make the purchasing process much simpler for participating military branches and government bureaus (the deal covers the Army, Navy, Air Force, Marine Corps and federal civilian agencies).
“We checked in with management, who noted that although this doesn’t represent a commitment from the government, it greatly simplifies the purchase process should DoD hospitals – where ISRG currently has a limited presence – go forward on buying a [da Vinci] system,” Newitter wrote today in a note to investors, positing that the deal could mean a 3% to 4% upside to 2015 sales.
