The global surgical robotics market was valued at over $75 billion last year. But it’s set to more than double in size – and reach almost $200 BILLION – by 2032. That represents a huge market opportunity for SS Innovations International (SSII) if it can grab share from the dominant player in the space, Intuitive Surgical (ISRG), writes John McCamant, special to MoneyShow.
Surgical robots are the future for many surgical procedures because they offer significant advantages in minimally invasive surgery. Specifically, they enable exceptionally accurate manipulation of surgical instruments within constrained operation spaces. Precisely operated robots surpass the ability of even the most highly trained surgeons to skillfully manipulate surgical tools.
Historically, ISRG has been the biggest player in the business with over 85% market share. But with the industry set to explode, new entrants like SSII can capitalize. Indeed, a $200 billion market – with potentially more than two million robotic surgeries performed annually – would represent a huge market opportunity for SSII.
Robotic surgery is a procedure which represents an evolution in practice across numerous disciplines. Surgical robotics technology is used across various medical procedures, including cardiac surgery, enabling surgeons to perform complex procedures through small incisions. That results in significantly less bleeding and reduced patient trauma, shorter recovery times, and ultimately significantly better patient outcomes.
The robotic surgery market currently features solid demand and procedure growth. But it has failed to penetrate the vast majority of the world. Most systems are deployed in the US, Western Europe, and Japan.
Thus, the industry remains at the early stages of growth and is poised to increase multi-fold over the next decade. The leading player in the robotic surgery sector is ISRG’s da Vinci system, which has 8,000 systems installed and currently has a near-monopoly.
However, they may be vulnerable in the next rapid stage of growth as they have basically sat unopposed for over 20 years. A sign of ISRG’s challenges came in a recent analyst report, which noted that Intuitive is having difficulty finding incremental robotic adopters/new hospitals. The trade-in cycle is nearly complete for the modestly improved Xi system.
Much of the expected growth in the coming decade for the robotic surgery market will almost surely come from the international market. There are huge untapped global economies, including Brazil, India, and China, that have been underpenetrated.
Moreover, hospital costs are reduced via robotic surgery because patients spend less time in surgery and recovery. Patient savings also occur thanks to lower costs using the robotic surgery systems per procedure compared to traditional medical teams led by surgeons.
As for demographics, Baby Boomers are continuing to age. That is swelling the global population of elderly to unprecedented levels as previous advances in healthcare have made them the longest living generation of humans in modern history. There is a growing need for more medical innovation and surgical interventions to address age-related health conditions, which will only boost market growth.
Another key point: Surgical robots were initially limited to specific procedures. But now, robotic technologies are being adapted for a broader spectrum of surgeries across various medical fields, including cardiac, neurology, urology, gynecology, and more. This versatility attracts hospitals and clinics aiming to offer more comprehensive robotic surgical services, which is expected to drive the market growth.
ISRG’s da Vinci: Primarily Used in Affluent Countries, Not “Forgotten” Ones
The high initial costs associated with acquiring and implementing robotic systems, including infrastructure and training, pose a financial challenge for many healthcare facilities in “Forgotten Countries” – the developing world. That has almost certainly impeded market growth. This is particularly true with the da Vinci systems, which are very expensive and take significant training to learn how to operate.
The other major barriers to entry are the regulatory complexities and concerns regarding patient safety. Robotic surgery is held to the very highest of medical standards for both medical adoption and patient acceptance. This requires regulatory agencies to demand rigorous clinical validation of robotic procedures, which of course slows down the approval process.
In addition, the complex and intricate nature of surgical robotics necessitates specialized training for surgeons, potentially leading to a shortage of skilled professionals. These factors collectively hinder the rapid expansion of the surgical robotics market.
But SSII has advantages on both fronts. Their lower costs and ability to train more surgeons faster position the company to potentially dominate the “Forgotten Countries” market.
Johns Hopkins Partnership Helps Showcase SSII Tech, Potentially Pave Way For FDA Approval
Additionally, SS Innovations recently had their first robotic surgery installation in the US at the Johns Hopkins Minimally Invasive Surgical Training and Innovation Center (MISTIC) in Baltimore. That is where the next generation of surgeons and health care providers are trained in the use of the latest technological and procedural medical advancements.
SS Innovations and the MISTIC team will share the benefits of these combined research activities. Dr. Sudhir Srivastava, Chairman of the Board and Chief Executive Officer of SS Innovations, said:
“We are pleased and proud to announce that SS Innovations’ flagship surgical robotic device, the first device of its kind to be made in India, has been installed at the Johns Hopkins University in Baltimore.
“This agreement marks the beginning of a co-development partnership pact to advance to broader procedural applications of medical robotics. Robotic surgery offers clear benefits to hospitals, surgeons, and patients, with its improved accuracy and reduced risk of pain and infection. Our mission is to use our SSi Mantra to bring this gold standard of medical care to the vast populations throughout the world who currently lack access to this type of precision surgery.”
SS Innovations’ SSi Mantra surgical robotic system will be managed onsite at the Johns Hopkins Hospital and will be operated by the university’s lab teams. The two organizations will also launch a knowledge forum showcasing demonstrations and discussions for the benefit of the global medical robotics community.
It would be difficult to imagine a more perfect fit for SSII, an up-and-coming robotic surgery company which prides itself on providing first-class medical care for underserved populations of the world, than Johns Hopkins teaching hospital and biomedical research facility. Founded in 1889, Johns Hopkins Hospital is considered to be one of the founding institutions of modern American medicine.
Several medical specialties were founded at the hospital, including neurosurgery by Harvey Williams Cushing and Walter Dandy, cardiac surgery by Alfred Blalock, and child psychiatry by Leo Kanner. Johns Hopkins also has a network of affiliated hospitals worldwide that will assist in both training and adoption of SSII’s Mantra robotic surgical systems over time.
What’s Next on the Regulatory Front For SSII’s Mantra System?
The SSi Mantra system has already been cleared by India’s Central Drugs Standard Control Organization (CDSCO), India’s equivalent of the US FDA, and is already clinically validated in India in more than 40 different surgical procedures. Importantly, CDSCO clearance is viewed as a proxy for acceptance by up to 50 other countries worldwide.
An additional 79 countries would require registration for clinical use, while 16 countries have their own regulatory process independent of both US FDA and European CE Mark clearance. This means that when the Mantra system has received regulatory clearance in many global jurisdictions, including India, all surgical uses are authorized.
That avoids the need for approval by completing clinical trial process which adds significant time and costs to approvals. However, specific individual procedures may need to be approved for specific indications by the FDA.
This could be beneficial for SSII as the FDA approval for specific procedures such as cardiac would be a huge sales point and marketing advantage, particularly when compared to industry standard da Vinci, which does not do cardiac procedures. SSII’s management team is working hard on the regulatory approval process and believes it could have both the key approvals in 2024 and 2025.
Moreover, the company announced in August 2023 that it retained the services of leading compliance firm Elexes to assist in the regulatory processes for these key regions. Elexes has a great reputation when it comes to navigating both the FDA and European CE Mark regulatory systems and has worked with many medical technology leaders including Stryker.
The partnership with Johns Hopkins will not have a formal role in the FDA approval process. But there will still be many advantages to the relationship, with it being beneficial for surgeon training and, ultimately, marketing.
The Mantra robotic surgical system offers significantly more favorably pricing when compared with the da Vinci top model Xi system. Currently, Mantra’s list price in India and surrounding countries is $600,000, compared with $1.5 million to $2 million, depending on import costs in various jurisdictions. That is a cost price advantage of up to 70%. The company expects that the operating and maintenance costs would be approximately one-third of those related to da Vinci, too.
In our view, the high price tag for both the system and its consumables has limited wide-spread use of the da Vinci machines in the “Forgotten Countries.” This cost advantage positions Mantra favorably for robust global uptake.
We could easily see the surgical robotic market expand significantly to include more of India, Asia, Central and South America, Eastern Europe, and Africa. Hospitals and healthcare systems there could not previously afford either the expensive tools or the training required to run the highly sophisticated robotic systems.
Lower Costs are Great. But Technological Advantages are Even Better!
SSII may be the “new kid on the block” in the robotic surgery market. But in our view, its Mantra system could be a technology leader for the foreseeable future. The SSi Mantra system has innovative flexibility already built into its software and technology capabilities, which represents an additional competitive advantage over da Vinci and other peer systems.
The ability to incorporate cutting-edge technologies, including AI, hold the promise to improve system performance over time as more and more data is collected. That could potentially reduce human error to improve outcomes. SS Innovations is also developing the capacity to decentralize the delivery of surgical care, which should eventually enable remote usage over 5G networks for applications such as tele-proctoring and tele-mentoring.
Looking ahead, enabling tele-surgery provides smaller and more remote hospitals with state-of-the-art care capabilities for their patients without requiring surgeons to be on-site. Previously, the costs associated with the need for on-site staffing contributed to the prohibitive and inconsistent use of robotic systems in far-flung facilities.
SSII is positioned to bring significant change today by selling the least expensive robotic surgical system, combined with better surgeon training. That will enable the company to offer significantly better surgical outcomes to almost any hospital in the world regardless of size or location.
Finally, it may be nearly impossible for anyone to compete with SSII on pricing OR quality due to India’s unparalleled lower hiring costs and pool of extremely high-end engineers and other talent. SSII has been and should be able to continue hiring best-in-class Indian engineers for a fraction of the cost in the US, Europe, or Japan.
Disclosure: SSII is a paid advertiser of MoneyShow.
