SURGICAL PRECISION: UNDETERRED BY STARTUP LOSSES TOPPING $380 MILLION, TRANSENTERIX'S PLEDGE TO REDUCE OPERATING-ROOM COSTS AWAITS A BIG PAYOFF.

• Author: Ayers, Rebecca
• Position: NC TREND: Tracking tech

With mounting pressure to rein in medical costs, one response is gaining clear momentum: Bring on the robots. Fewer than 10% of surgeries involve robotic equipment, a number that appears certain to jump. Revenue from abdominal robotics surgery alone could quintuple to nearly $16 billion by 2023, Lexington, Mass.-based WinterGreen Research Inc. projects. TransEnterix Inc., a medical-device company headquartered in Morrisville, is poised to benefit from the trend. While the upfront cost of its Surgical Senhance System is about $1.5 million to $2 million, the robotic device can reduce costs of medical operations by about two-thirds, says Chief Executive Officer Todd Pope, who was named among the nation's 50 most influential health-care executives by Time magazine in October.

"We're able to offer a cost per procedure to the hospital that is much more economical, and we all know the pressure we face in health care today on costs," he says. "We really wanted to offer a product that fit well into this value-based health care environment."

No wonder, then, that some investors see a big future for Trans-Enterix, particularly after the U.S. Food and Drug Administration approved the company's product for abdominal surgeries and 23 minimally invasive gynecological and colorectal procedures. While fewer than 20 systems have been sold globally, the company has received considerable publicity for its early successes. Orlando-based Florida Hospital performed the first Senhance surgery in the U.S., removing part of an intestine in July. Siegen, Germany's St. Marien Hospital is using the equipment for some of its most common surgeries, Time reported in October.

Those achievements helped push the company's market value past $1.2 billion in September before sliding by more than 40% in October after reporting it sold only four systems in the most recent quarter. As of mid-November, the company's shares retained a market value of more than $630 million.

TransEnterix is widely viewed as the David to the surgical-robotics industry's Goliath--Sunnyvale, Calif.-based Intuitive Surgical. Mostly due to its da Vinci robotic equipment, Intuitive had a market cap of more than $60 billion in early November.

TransEnterix has a long way to catch up. Intuitive has more than 4,400 da Vinci Surgical System devices on the market that have been used in more than 5 million surgeries since earning FDA approval in 2000. Still, the upstart reports some advantages: Senhance's...