The idea is tempting: remote-controlled robots that operate with clinical precision to minimize trauma. But human doctors perform best on their own during cardiac procedures such as stent implants, according to Siemens Healthineers.
The German medical equipment maker is shutting down a business it acquired in 2019 through a $1.1 billion acquisition by the US group Corindus.
The decision resulted in a 329 million euro writedown to Wednesday’s second-quarter results. Siemens Healthineers is not ending its foray into robotic assisted surgery. But now he’s under added pressure to prove the technology works well for neurological procedures. Investors will have to wait several years for this.
Time has not been on the side of cardiac surgery robots. Covid has made it difficult for Siemens Healthineers staff to enter hospitals for training. Once restrictions were eased, the medical benefits of using remote-controlled robots proved too modest to build a sizable business.
The impairment added to weak second-quarter results of the group, which was spun off from industrial conglomerate Siemens in 2018. Adjusted earnings fell 30% to 681 million euros. The diagnostics division was impacted by the contraction in the demand for Covid-19 tests.
Revenue decreased by 2.5% on a comparable basis to 5.3 billion euros. Excluding Covid Rapid Antigen Tests, revenues increased 11%, aided by an imaging division and the U.S. Varian oncology company purchased in 2021.
Retirement from cardiac robotics will bolster margins in Advanced Therapies division, the smallest unit by revenue.
Siemens Healthineers’ higher margins give it a premium valuation over Philips. The Dutch group is struggling to recover from the 2021 recall of defective respiratory devices for sleep apnea. Siemens Healthineer shares are trading at 26 forward gains against Philips over 16 times.
Closure is a disappointment but not a catastrophe. The broader conclusion is that automation has its limits.
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