Intuitive Surgical, Inc'

1
Intuitive Surgical, Inc.

• Ticker ISRG

April 22, 2008
2
The Company

• Intuitive Surgical is the global technology
  leader in the rapidly emerging field of
  robotic-assisted minimally invasive surgery
  (MIS). The Company's da Vinci Surgical System
  offers surgeons superior visualization, enhanced
  dexterity, greater precision and ergonomic
  comfort for the optimal performance of MIS. The
  da Vinci System enables surgeons to perform even
  complex procedures, such as open-heart surgery,
  through 1-2 cm incisions.

3
History

• 1995 Intuitive Surgical was founded
• Surgical robotics was little more than a medical
  curiosity until the 1999 introduction of the da
  Vinci Surgical System
• 2000 da Vinci became first robotic surgical
  system cleared by FDA for general laparoscopic
  surgery
• June 2000 Successful ISRG IPO
• 2003 Intuitive Surgical acquired its principal
  competitor Computer Motion, strengthening its
  intellectual property holdings and ensuring its
  position as the worlds sole provider of
  robotic-assisted surgical systems

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Now

• 795 da Vinci System base as of 12/31/07
• 595 United States, 136 Europe, 64 Rest of World
• Exclusive rights to over 400 U.S. and foreign
  patents
• Relationships with industry leaders including IBM
  Corporation, Massachusetts Institute of
  Technology, and Heartport, Inc. (Johnson
  Johnson)
• Industry collaborations with companies including
  Ethicon Endo-Surgery (Johnson Johnson),
  Medtronic, and Olympus Optical
• FDA clearances for laparoscopic, thoracoscopic,
  prostatectomy, cardiotomy, revascularization,
  urology, gynecology, and pediatric procedures
• da Vinci Prostatectomy procedure is currently the
  fastest-growing treatment for prostate cancer
  (the second leading cause of cancer-related death
  in men)

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Revenue Model
Source Intuitive Surgical IR Presentation
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Taking surgical precision and technique beyond
the limits of the human hand
Source Intuitive Surgical Corporate Overview
Brochure
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Hospital Benefits

• Market Share Growth
• Increased patient satisfaction
• New patients and increased referrals
• Recruitment and retention of top surgical talent
• Enhanced hospital reputation
• Maximizing Efficiencies
• Decreased length of stay
• Decreased complications
• Decreased blood transfusions
• Decreased nursing staff ratios
• Decreased post-operation pain management
• Broad Utilization Mix
• Application across multiple surgical specialties

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Cardiac

• In MVST (Multi-Vessel Small Thoracotomy) our
  patients avoid sternotomy, CPB and aortic
  manipulation. As a result they benefit from
  reduced morbidity, shortened hospital stay,
  faster recovery and improvement of postoperative
  quality of life.
• - Michael Argenziano, M.D.
• Assistant Professor of Surgery
• Columbia University College of Physicians and
  Surgeons, New York Presbyterian Hospital
• The da Vinci System makes it possible to offer
  a wider range of patients a minimally invasive
  open-heart procedure to repair the mitral valve.
  This will allow more patients to benefit from
  both shorter hospital stays and reduced recovery
  times.
• - W. Randolph Chitwood, Jr. M.D.
• Professor and Chairman Department of Surgery
• Chief of Cardiothoracic Surgery
• East Carolina University School of Medicine

Source Intuitive Surgical Corporate Overview
Brochure
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Urology

• As a trained surgical oncologist, da Vinci has
  allowed me to offer my patients a better cancer
  operation with improved clinical outcomes.
• - Thomas E. Ahlering, M.D.
• Associate Professor of Urology
• Director, Urological Oncology
• University of California Irvine Medical Center
• In my experience, robotics allows for greater
  surgical precision which leads to improvements in
  cancer control, potency, and urinary function.
• - Mani Menon, M.D.
• Director, Vattikuti Urology Institute
• Henry Ford Health System

Source Intuitive Surgical Corporate Overview
Brochure
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General Surgery

• I can achieve superb clinical results in
  technically demanding operations such as Heller
  myotomy and Esophagectomy with fewer
  complications.
• - Santiago Horgan, M.D.
• Director of Minimally Invasive Surgery
• University of Illinois, Chicago

Source Intuitive Surgical Corporate Overview
Brochure
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Source Intuitive Surgical IR Presentation
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Source Intuitive Surgical IR Presentation
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IncomeStatement(M)
Gross Margin 69.0 66.5 67.6 63.4 48.0
Operating Margin 34.4 28.8 30.2 15.3 (13.0)
Net Margin 24.1 19.3 41.4 16.9 (10.5)
Source Yahoo! Finance
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Balance Sheet(M)
Source Yahoo! Finance
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Statement of Cash Flows(M)
Source Yahoo! Finance
FCF/Revenue 30.2 21.8 17.5 5.7 (14.2)
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Growth Potential

• Over 6000 hospitals in the U.S. alone Intuitive
  has only tapped about 795 worldwide
• Intuitive Surgical estimates 55 total procedure
  growth in 2008
• Intuitive Surgical estimates 40 dVP procedure
  growth
• ACS estimates 186,295 new cases of prostate
  cancer in 2008
• Intuitive Surgical estimates 150 dVH procedure
  growth
• Over 600,000 women undergo hysterectomies every
  year

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Reference

• Intuitive Surgical, Inc. website
  (www.intuitivesurgical.com)