Growth in Global Surgical Robotics Market

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1:32Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Hey, we got a few developments from the world of robotic surgery. After more than a decade of research and years of delays, J &J now has a robot on the market for soft tissue surgery. That news came out yesterday. Meantime, Intuitive Surgical Shares, we saw them under pressure again last week, as growth in the use of its DaVinci surgical robots slowed to the weakest pace in four years, and its guidance for procedure growth was unchanged due to softer U.S.

2:12growth in procedures reflected because of changes to Affordable Care Act subsidies. Company also said, I thought this was interesting. This is so cool. I mean, so interesting, right? Yeah, that U.S. Da Vinci bariatric cases in particular experience pressure from patient usage of GLP-1 weight loss drugs. So fewer people are getting bariatric surgery because they're using GLPs instead. That's the read-through. Okay. Yeah. Curious if any of this at this point is affecting our next guest. Back with us, Dr. Sudhir Shrivastava, chairman, CEO, and founder of the U.S.-based SS Innovations International.

2:47It makes medical equipment. It develops surgical robotic technologies. It's a$683 million market cap with U.S. shares down about 40 % this year. He joins us from Fort Lauderdale. Good to have you on the program. I think a lot of people, when they think surgical robotics, they think about the DaVinci machine from Intuitive Surgical. How does your product at SS Innovations International differ from the DaVinci surgical robot? Yes, a great starting question. First of all, thank you very much for having me. so our SSI mantra system is different than the VG almost at every level other than fundamentally it is still a surgical robot so you know we can go through some big comparison on the technology open fish console as opposed to the immersive and tour up to five arm control from the console large open 3D-inch, 32-inch, 4K monitor.

3:47Table-side team also has the same 3D view, which is safer and more efficient. And then a modular design of the robotic arms, 3, 4, or up to 5 arms. And moreover, our system is equipped right from the beginning, both for teleproctoring and tele-surgery. What about from the perspective of the doctor actually using the technology and how difficult it is to train? All these doctors are used to using certain products right now. How do you train the doctors to do this? Yeah, so we have gone through, of course, you know, in India, we have sold 224 systems. Almost 13 ,000 cases now have been done, including cardiac.

4:22So essentially what we have observed, the people who are DaVinci users, it almost takes them anything five to ten minutes literally because it's a different, like driving a different car. So once they understand the controls, same principle essentially, the hand controls, foot controls operating watching the video. So people who are non-robotic surgeons, it can take them from 20 to 30 minutes to learn the machine. Then, of course, they have to go through certain practice to get used to things. Just like with DaVinci, there is a learning curve, and so there is a learning curve with our system for the novices.

4:58And you don't sell in the U.S. yet, correct? Yeah, so we are actually in the process with U.S. FDA. and again our anticipation is by hopefully first quarter of next year we will achieve some approval from usfda right i know this is some of what we we talked about last year i am curious what you hear from the investment community because as tim mentioned i mean you think of intuitive surgical right they're 117 billion dollar market cap company a very known name and you did talk about the distinctions. Do you anticipate that the U.S. market is really your growth opportunity? Because I understand your mission is about making robotic surgery more accessible to more people and also making it more affordable.

5:46Yeah, so we have actually achieved that, you know, in terms of the pricing, consumer goods and service agreements, etc. And outside of India, we are currently in 14 countries. So I think when you think about the growth opportunity in USA, absolutely. Because our system does every single thing that DaVinci does and more in terms of the capabilities, US brandliness, features, and specialties, including cardiac surgery. And it will be, by the time you come to US, it will be somewhat less than half the price that of the DV5 with, again, better opportunity. So I think we feel that there's a great opportunity in the U.S.

6:26as well once you get past FDA and also the whole ambulatory surgery center market. You know, our system being modular, a three-armed system, which is a full robot with all bells and whistles, is a great opportunity for ASC. And again, at an affordable price. So I think if only we are targeting hospitals and I've been approached by literally every major hospital in the country, the big names that you can imagine. and also... In the U.S., you're saying? You're saying in the U.S.? Yeah, that's correct. Yes, yes, yes. I mean, Cleveland Clinic, Mayo, University of Chicago, I mean, all the big names, you know, not only they are friends of mine at different levels, but they're very interested because the technology now has been commercialized, at least in India, clinically validated, and safety has been proven.

7:14Dr. Srivastava, one thing I want to ask you, though, investors don't seem to have conviction behind you When we talked with you in last November, you guys were over a billion-dollar market cap company. I know it's just one metric, but you're now about$683 million in terms of market cap. The stock's down 40 % year to date. What do you hear from your investor base? Because if you guys are just about a year away or so from being in the U.S. market, and it sounds like there's support, why aren't investors agreeing with you? Yeah, I think first of all, as I'm sure you know more than anybody else, you know, the stock markets fluctuate.

7:53I mean, if you look at Intuitive, you know, a year ago, you know, about$200 billion worth is now. And huge value, they've lost actually. And these things happen, I think, for a variety of reasons. Moreover, I think the biggest thing that we hear from investors, they are waiting for us to get the U.S. approval. And they want to see U.S. revenues. And that is, I think, the primary. And moreover, we were like a submarine. We finally have surfaced. And now more and more analysts actually are, in fact, I am here. There are several interviews scheduled with that, you know, known analyst actually. I think once the coverage becomes available to the American community, I think things will gradually change.

8:34And I think the key bottom line is this really, I think they want to see U.S. revenues. And that's how I think it fluctuates. Well, you know, to add on to that, I mean, Intuitive Surgical, it's a market cap of about close to$120 billion. You guys are selling a billion dollars. Dr. Fred Maul, who was a founder, is a founder of Intuitive Surgical, is your vice chair now. He believes in your product. That's it. I would think a lot of people would look at that as a huge feather in your cap. Very briefly, why don't you sell it? Why would you sell yourself to a company like Intuitive Surgical? You know that I cannot answer that on this talk.

9:12I'm sorry, I'll have to reprint that. But with a caveat, let's say if they made a proposal that absolutely we cannot refuse, we are a public company, it will have to be brought up to people, board, and decisions will be made there. I'll leave it at that. All right, so we can assume that there was no, there's been no proposal yet put before you? Well, there have been people with strategies that looked at us, and again, under the NDA and all that thing, And I'm sure you can appreciate I cannot get into some of those details. We do. Stay in touch and let us know as you move closer in expectations in terms of the U.S.

9:50market. Dr. Shivastava, he's chairman, CEO and founder of SS Innovations International.

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