Hansen Medical Reports Third Quarter and Nine-Month 2012 Results
Magellan(TM) Robotic Systems Installed at Three Leading U.S. Hospitals; Two Successful Live Magellan System Cases Presented by Dr. Barry Katzen at Transcatheter Cardiovascular Therapeutics (TCT) Conference; Received 30 Million From Expanded Agreement With Intuitive Surgical
MOUNTAIN VIEW, CA, Nov 07, 2012 (Menafn - MARKETWIRE via COMTEX) --Hansen Medical, Inc. HNSN, a global leader inintravascular robotics, today reported recent business highlights andfinancial results for the third quarter and nine months endedSeptember 30, 2012.
Third Quarter Summary and Recent Business Highlights
--Company recently announced an expanded agreement with Intuitive
Surgical
ISRGwhereby Hansen Medical received a total of 30
million through a 20 million fee for an expanded license agreement
and a 10 million private placement of approximately 5.3 million
shares of Hansen Medical common stock
--Shares purchased at a premium and subject to 18 month lock-up
--Intuitive Surgical becomes Hansen Medical's third largest
shareholder
--Shipped five systems during the quarter (four Magellan(TM) Robotic
Systems and one Sensei(R) X Robotic Catheter System)
--Magellan Systems installed and generating procedures at the
Methodist DeBakey Heart and Vascular Center at The Methodist
Hospital, Houston, TX; UC Davis Medical Center, Sacramento, CA;
and Baptist Hospital of Miami, Miami, FL
--Initiated a new limited commercial evaluation program to allow certain
strategic accounts to install and utilize Hansen systems for a trial
period while the purchase contract is being evaluated by the hospital
--Of the five systems shipped in the third quarter, three Magellan
systems were part of the commercial evaluation program
--Generated total revenue of 5.1 million in the third quarter
--Recognized revenue on five systems during the third quarter, including
one Magellan system and one Sensei system shipped in the quarter, and
three Sensei systems from deferred revenue which were shipped in
previous periods
--Physicians performed an estimated 659 Hansen robotic procedures in the
third quarter, up 3.5% sequentially and 9.3% year over year. This is
the fifth consecutive quarter of procedure growth.
--Sold 689 catheters in the third quarter, down 2.1% sequentially
and down 1.3% year over year
--Exhibited Magellan system at two recent conferences: the Vascular
InterVentional Advances (VIVA) Conference in Las Vegas, and the
Transcatheter Cardiovascular Therapeutics (TCT) Conference in Miami
--The Magellan system was featured in two successful live cases at
the TCT conference by Dr. Barry Katzen, founder and Medical
Director of Baptist Cardiac & Vascular Institute (Baptist
Hospital of Miami)
--Hansen will be further exhibiting its Magellan system at the 39th
Annual Symposium on Vascular and Endovascular Issues
(VEITHsymposium(TM)), which takes place from November 14-18, 2012 in
New York, NY, and the International Symposium on Endovascular Therapy
(ISET 25) from January 19-23, 2013 in Miami, FL
--The first clinical cases were performed in the U.S. with the recently
launched Artisan(R) Extend Control Catheter, which is designed to
work with the Sensei system. The Artisan Extend Catheter includes a
simplified flush design that can improve physician workflow during
complex electrophysiology procedures, and allows for lower
manufacturing costs.
--Held cash, cash equivalents and short-term investments of 21.6
million at September 30, 2012, representing a quarterly cash burn of
7.8 million and includes receipt of 1.5 million of insurance
reimbursement proceeds in the quarter
Nine Months 2012 Financial Summary
--Shipped 9 robotic systems (4 Sensei systems and 5 Magellan systems);
recognized revenue on 11 robotic systems (8 Sensei systems and 3
Magellan systems)
--Sold 1,967 catheters year to date, essentially flat year over year
--Physicians performed an estimated 1,932 Hansen robotic procedures year
to date, up 3.6% year over year
--Generated year to date total revenue of 13.3 million, down 16.7% year
over year
"To have our Magellan Robotic System installed in multiple prestigiouscenters only four months after receiving U.S. clearance is asignificant accomplishment for the Company," said Bruce Barclay,Hansen Medical's President and Chief Executive Officer. "We believeour recently initiated limited commercial evaluation program willhelp accelerate the ramp of clinical cases, allowing us to closesystem sales more efficiently, and further grow our pipeline ofpotential transactions. Our improved procedure rate in the thirdquarter, driven primarily by our base electrophysiology business, isindicative of the significant value we believe physicians andhospitals can derive from our systems."
"Additionally, our recent agreement with Intuitive Surgical is asignificant validation of our technology from the global pioneer andleader in medical robotics. Importantly, the capital received as partof this agreement will further strengthen our balance sheet, with asignificant portion of the new capital being non-dilutive to ourcurrent shareholders. In fact, in the last few years, we have broughtin more than 80 million of new, non-dilutive capital. Given ourstrategic focus on intravascular robotics, a large and growing marketwith a significant unmet clinical need, this capital will furthersupport our product development efforts and global launch of theMagellan(TM) Robotic System."
Mr. Barclay continued, "In recent weeks, both Dr. John Laird of theUC Davis Medical Center and Professor Nick Cheshire of St Mary'sHospital, of Imperial College London, presented their experienceswith the Magellan system at the VIVA conference, and Dr. Katzenpresented two live case demonstrations to attendees at TCT. Thesewere valuable opportunities to highlight the benefits of our Magellansystem by key opinion leaders at large conferences and we lookforward to further highlighting our technology with our significantpresence at the VEITHsymposium next week in New York City, and theISET 25 conference in January in Miami."
Commenting on his live case presentations at TCT, Dr. Katzen noted,"We were excited to present two live cases at TCT using the Magellansystem. This technology has the potential to significantly enhanceendovascular procedures. We view the Magellan system as an importantpotential strategic investment that can help enhance and grow ourpractice by improving procedure predictability and utilization, whilepossibly lowering radiation exposure."
Hansen Medical's new limited commercial evaluation program allowscertain strategic accounts to install and utilize its systems for atrial period while the purchase contract is being evaluated by thehospital. Hospitals participating in the commercial evaluationprogram are not obligated to purchase the system upon completion ofthe trial period, however, participating hospitals must purchase thecatheters used in the evaluation process.
2012 Third Quarter Financial Results
Total revenue for the third quarter ended September 30, 2012 was 5.1million compared to revenue of 5.4 million in the same period in2011. During the third quarter, the Company shipped five systems(four Magellan systems and one Sensei system) and recognized revenueon five systems (one Magellan system and four Sensei systems), aswell as shipment of 689 catheters. Catheter sales were down 1.3%compared to the third quarter of 2011 and down 2.1% sequentially.Further, an estimated 659 Hansen robotic procedures were performed inthe period, an increase of 9.3% compared to the same quarter of theprior year, and up 3.5% sequentially. As of September 30, 2012, theCompany had a total deferred revenue balance of 2.9 million, all ofwhich is related to deferred revenue on service contracts.
Cost of revenues for the third quarter was 3.8 million. As a result,gross profit for the quarter was 1.3 million, or 24.6% of revenue,compared to gross profit of 1.1 million, or 20.2% of revenue for thesame period in 2011. The increase in gross profit in the currentquarter is primarily the result of improved productivity, whichlowered the cost of products sold.
Research and development expenses for the third quarter were 3.8million, compared to 3.5 million for the same period in 2011. The2011 amount included 2.1 million of funded research and developmentcredits (recorded as a reduction of expense) from our now completedwork under our joint development agreement with Philips. Excludingthese research and development credits in the third quarter of 2011,prior year research and development expenses were higher primarilydue to additional development costs associated with the Company'sMagellan System and higher employee related costs.
Selling, general and administrative expenses for the third quarterwere 5.1 million, compared to 7.6 million for the same period of2011. The net decrease in the current quarter is primarily due to a1.5 million insurance reimbursement received in the third quarter or2012 related to prior litigation costs in addition to lower non-cashstock compensation and employee-related expenses.
Net loss for the third quarter was 8.4 million, or 0.14 loss pershare, based on average shares outstanding of 61.5 million. Thiscompares with a net loss for the third quarter of 2011 of 10.1million or 0.18 per share, based on average shares outstanding of55.1 million. Net loss for the third quarter of 2012 included totalnon-cash stock compensation expenses of 1.0 million compared to 1.8million in the third quarter of 2011. The reduction is primarily theresult of lower equity awards in the quarter compared to the prioryear.
Cash burn in the quarter improved to 7.8 million compared to 9.1million in the second quarter of 2012. The current quarter cash burnwas positively impacted by the receipt of a 1.5 million insurancereimbursement. Cash, cash equivalents and short-term investments asof September 30, 2012 were 21.6 million, compared to 29.4 millionas of June 30, 2012, and 52.2 million as of December 31, 2011.
Hansen Medical Conference Call
Company management will hold a conference call to discuss its full2012 third quarter results today, November 7, 2012 at 5:00 p.m. ET(2:00 p.m. PT). Investors are invited to listen to the call live viathe Internet using the link available within the "Investor Relations"section of Hansen Medical's website at www.hansenmedical.com.Additionally, participants can dial into the live conference call bycalling 888-846-5003 or 480-629-9856 (international callers). Anaudio replay of the webcast will be available approximately one hourafter the completion of the conference call through November 14,2012, by calling 877-870-5176 or 858-384-5517 (internationalcallers), and entering access code 4572018.
About Hansen Medical, Inc.
Hansen Medical, Inc., based in Mountain View, California, is theglobal leader in intravascular robotics, developing products andtechnology designed to enable the accurate positioning, manipulationand control of catheters and catheter-based technologies. TheCompany's Magellan(TM) Robotic System, NorthStar(TM) Robotic Catheterand related accessories, which are intended to facilitate navigationto anatomical targets in the peripheral vasculature and subsequentlyprovide a conduit for manual placement of therapeutic devices, haveundergone both CE marking and 510(k) clearance and are commerciallyavailable in the European Union, and the U.S. In the European Union,the Company's Sensei(R) X Robotic Catheter System and Artisan ControlCatheter are cleared for use during electrophysiology (EP)procedures, such as guiding catheters in the treatment of atrialfibrillation (AF), and the Lynx(R) Robotic Ablation Catheter iscleared for the treatment of AF. This robotic catheter system iscompatible with fluoroscopy, ultrasound, 3D surface map and patientelectrocardiogram data. In the U.S. the Company's Sensei X RoboticCatheter System and Artisan Control Catheter were cleared by the U.S.Food and Drug Administration for manipulation and control of certainmapping catheters in EP procedures. In the United States, the SenseiSystem is not approved for use in guiding ablation procedures; thisuse remains experimental. The U.S. product labeling thereforeprovides that the safety and effectiveness of the Sensei X System andArtisan Control Catheter for use with cardiac ablation catheters inthe treatment of cardiac arrhythmias, including AF, have not beenestablished. Additional information can be found atwww.hansenmedical.com. Additional information can be found atwww.hansenmedical.com.
Forward-Looking Statements
This press release contains forward-looking statements regarding,among other things, statements relating to goals, plans, objectives,milestones and future events. All statements, other than statementsof historical fact, are statements that could be deemedforward-looking statements, including statements containing the words"plan," "expects," "potential," "believes," "goal," "estimate,""anticipates," and similar words. These statements are based on thecurrent estimates and assumptions of our management as of the date ofthis press release and are subject to risks, uncertainties, changesin circumstances and other factors that may cause actual results todiffer materially from the information expressed or implied byforward-looking statements made in this press release. Examples ofsuch statements include statements about the potential benefits ofour Magellan Robotic System for hospitals, patients and physicians,expectations of shipments of our Magellan Robotic System, thepotential benefits of our technology and the value of ourintellectual property portfolio and the sufficiency of the company'scash resources for supporting the initial launch of the MagellanRobotic System. Important factors that could cause actual results todiffer materially from those indicated by such forward-lookingstatements include, among others: engineering, regulatory,manufacturing, sales and customer service challenges in developingnew products and entering new markets; the commercial viability ofour products in the vascular markets; potential safety and regulatoryissues that could slow or suspend our sales; the effect of credit,financial and economic conditions on capital spending by ourpotential customers; the uncertain timelines for the sales cycle fornewly introduced products; the rate of adoption of our systems andthe rate of use of our catheters; the scope and validity ofintellectual property rights applicable to our products; competitionfrom other companies; our ability to recruit and retain keypersonnel; our ability to maintain our remedial actions overpreviously reported material weaknesses in internal controls overfinancial reporting; our ability to manage expenses and cash flow,and obtain additional financing; and other risks more fully describedin the "Risk Factors" section of our Quarterly Report on Form 10-Qfor the quarter ended June 30, 2012 filed with the SEC on August 9,2012 and the risks discussed in our other reports filed with the SEC.Given these uncertainties, you should not place undue reliance on theforward-looking statements in this press release. We undertake noobligation to revise or update information herein to reflect eventsor circumstances in the future, even if new information becomesavailable.
Hansen Medical, Heart Design (Logo), Hansen Medical (with HeartDesign), Sensei and Lynx are registered trademarks, and Magellan andNorthStar are trademarks of Hansen Medical, Inc. in the United Statesand other countries.
Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three months endedNine months ended
September 30,September 30,
----------------------------------------
2012201120122011
------------------------------------
Revenues5,1035,36013,29215,959
Cost of goods sold3,8464,27810,55012,685
------------------------------------
Gross profit1,2571,0822,7423,274
------------------------------------
Operating expenses:
Research and development3,7723,45812,63210,258
Selling, general and
administrative5,0587,62119,18622,816
------------------------------------
Total operating expenses8,83011,07931,81833,074
Gain on sale of intellectual
property------23,000
------------------------------------
Loss from operations(7,573)(9,997)(29,076)(6,800)
Other income, net(858)(148)(2,642)(426)
------------------------------------
Net loss(8,431) (10,145) (23,269) (7,226)
====================================
Basic and diluted net loss per
share:(0.14) (0.18) (0.52) (0.13)
====================================
Shares used to computed basic
and diluted net loss per share:61,45755,09461,05754,626
====================================
Condensed Consolidated Balance Sheets (unaudited)
(in thousands)
September 30,December 31,
20122011
------------- -------------
Assets
Cash, cash equivalents and short-term
investments21,649 52,210
Accounts receivable4,5795,493
Inventories, net8,3876,617
Deferred cost of revenues731,573
Prepaids and other current assets1,4021,829
Property and equipment, net6,6168,300
Other assets632737
------------- -------------
Total assets43,338 76,759
============= =============
Liabilities and Stockholders' Equity
Liabilities
Accounts payable2,265 2,944
Deferred revenues2,8586,438
Debt29,34729,147
Other liabilities3,9524,749
------------- -------------
Total liabilities38,42243,278
------------- -------------
Stockholders' equity4,91633,481
------------- -------------
Total Liabilities and Stockholders' Equity43,338 76,759
============= =============
Investor Contacts:
Peter J. Mariani
Chief Financial Officer
Hansen Medical, Inc.
650.404.5800
FTI Consulting, Inc.
Brian Ritchie
212.850.5683
Email Contact
John Capodanno
212.850.5705
Email Contact
SOURCE: Hansen Medical, Inc.
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