Lonnie M. Smith - Intuitive Surgical

Training Class Intuitive Surgical & ab medica 10 th Anniversary of Robotic Surgery in Italy

Disruptive Innovation “ Breakthrough” Technologies are Born Ugly

The Goal Enable surgeons to perform complex surgery through tiny incisions with greater precision than is possible with their natural hands. Wristed instruments the size of a small pencil Natural “intuitive” instrument movement Scaled hand motion Tremor elimination Magnified 3-D Vision

Evolution of the da Vinci System Traditional Laparoscopy Introduction of 4 th arm Simple instruments Eliminates lap compromises da Vinci Standard Dual Console Enhanced HD Vision (1080i) Superior Ergonomics Increased Surgeon Control Scalable architecture Advanced instruments da Vinci Si 3D HD Vision (720p) Visual Inputs – TilePro Multi-quadrant access Streamlined set-up Procedure-specific and energy instruments da Vinci S

New Technology Adoption Curve Innovators Early Adopters Early Majority Late Majority Laggards

Adoption is Driven by a Significant Shift in the Value to the Customer That Value Equation for Surgery is Efficacy Patient Value = Invasiveness

Adoption is Driven by a Significant Shift in the Value to the Customer That Value Equation for Surgery is 2 Efficacy Patient Value = Invasiveness

Procedure Value Matrix Invasiveness Efficacy High Low High Most Attractive High

Procedure Value Matrix Prostate Cancer Invasiveness Efficacy High Low High Most Attractive Open Radical Prostatectomy Hormonal Treatment Radioactive Seeds Watchful Waiting Radiation

Prostrate Cancer: Patient Preferences Dr. Menon - Henry Ford Hospital All patients seen over a 1 month period polled preoperatively: Cancer removal Continence Potency Safety Recuperation Transfusion

Grading of Operation from the Patients Perspective Dr. Menon - Henry Ford Hospital (524) 87% (373) 62% 600 SCORE 100% 89% No transfusion Blood loss 3 7 Score* Pain 98% 85% No comps Safety 66% 33% Sexual Intcourse Potency (6 mths) 96% 60% No pads Continence (6 mths) 94% 76% Neg Margins Cancer removal Menon VIP HFHS RRP Test

Procedure Value Matrix Invasiveness Efficacy High Low High Open Radical Prostatectomy dVP Radioactive Seeds

daVinci Prostatectomy U.S. Adoption Curve Regression Analysis Quarterly Data 2002-Q4, 2007 dVP / Total Prostatectomies Y = .2611-5.4011 2 R = 0.9833

U.S. Prostatectomy Adoption Curve Quarterly Procedures 100,000 Annually

Robotic Surgery adoption will occur procedure by procedure Robotic Surgery Adoption Curve dVPostatectomy

dVH Adoption Curve Quarterly Procedures 250,000 Annually

Robotic Surgery adoption will occur procedure by procedure Robotic Surgery Adoption Curve dVPostatectomy dVHysterectomy

Clinical Benefits of da Vinci ® Surgery Coronary Artery Bypass Surgery Avoids a Sternotomy Findings were as follows : The daVinci “mini-CABG”hybrid patients had 99% patency at one year vs. 80% with open surgery 3 to 7 fewer days in the hospital 85% reduction in MACCE (major adverse cardiac or cerebrovascular event) one year post surgery 83% reduction in intubation time No net increase in cost and a cost savings for patients with major co-morbidities University of Maryland Coronary Artery Bypass Study 100 off-pump consecutive daVinci “mini-CABG” hybrid patients compared to matched group of 100 sternotomy CABG patients

Clinical Benefits of da Vinci ® Surgery - ENT Mayo Clinic: Transoral Robotic Surgery Is Safe and Effective in Treating Some Throat Cancer The average hospital stay was 2.3 days, as compared with 7 to 10 days for traditional surgery The removal of feeding tubes in patients undergoing transoral robotic surgery occurred an average of 7 to 10 days after surgery, compared with 2 to 3 months for traditional surgery “ The results of this research were even more positive than we expected. We found great advantages to using transoral robotic surgery for tonsil and base of tongue cancers .” - Eric Moore M.D . “ There were no major complications, no tumor recurrence and, when compared to traditional surgeries, patients began swallowing on their own sooner and left the hospital sooner.”

Robotic Surgery adoption will occur procedure by procedure

da Vinci ® Surgical System U.S. Installed Base 1999 – 2009 Alaska Hawaii 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009-through Q3

da Vinci ® European Installed Base 1999 – 2009 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009-through Q3

da Vinci ® Asian Installed Base 1999 – 2009 2002 2003 2004 2005 2006 2007 2008 2009-through Q3

Net Sales Trend - ($MM) 67% CAGR

Dual Console - Fully Integrated OR

da Vinci OnSite System health Remote Diagnostics Increase system up-time Procedure metrics Time in following Duration of instrument changes Trends over time Objective measurements of performance Intuitive Surgical Internet

Advanced Instrumentation Future Instruments Laser Linear Cutters Seal and Cut Drills/Burrs Suction/Irrigation Integrated Energy Instruments Monopolar Energy Bipolar Energy Advanced Bipolar Harmonic Advanced Graspers

Single Port Surgery da Vinci Single Port Surgery 3D Vision Improved Ergonomics Stable Endoscope Tremor Filtering Intuitive Control

Surgeon Control da Vinci allows assignment of each “Master” to a specific instrument arm to maintain intuitiveness Left Master – Right Instrument Right Master – Left Instrument

Single Port & Natural Body Orifice Surgery

Image Guidance - Fluorescence ICG Central venous Interstitial Specific antibodies plus fluorescing markers Vasculature Lymph Node Mapping

In-Vivo Microscopy Sub-micron in-vivo histology Real-time functional and molecular imaging and diagnosis Tissue information (cancer, endometriosis, etc)

The Journey “ Taking surgery beyond the limits of the human hand. ™ ”

Lonnie M. Smith - Intuitive Surgical