Hansen Medical Reports Third Quarter and Nine-Month 2012

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 -- (Marketwire) -- 11/07/12 --  Hansen Medical,
Inc. (NASDAQ: HNSN), a global leader in intravascular robotics, today
reported recent business highlights and financial results for the
third quarter and nine months ended September 30, 2012.  
Third Quarter Summary and Recent Business Highlights  


 
--  Company recently announced an expanded agreement with Intuitive
    Surgical (NASDAQ: ISRG) whereby 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 wer
e 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 prestigious
centers only four months after receiving U.S. clearance is a
significant accomplishment for the Company," said Bruce Barclay,
Hansen Medical's President and Chief Executive Officer. "We believe
our recently initiated limited commercial evaluation program will
help accelerate the ramp of clinical cases, allowing us to close
system sales more efficiently, and further grow our pipeline of
potential transactions. Our improved procedure rate in the third
quarter, driven primarily by our base electrophysiology business, is
indicative of the significant value we believe physicians and
hospitals can derive from our systems."  
"Additionally, our recent agreement with Intuitive Surgical is a
significant validation of our technology from the global pioneer and
leader in medical robotics. Importantly, the capital received as part
of this agreement will further strengthen our balance sheet, with a
significant portion of the new capital being non-dilutive to our
current shareholders. In fact, in the last few years, we have brought
in more than $80 million of new, non-dilutive capital. Given our
strategic focus on intravascular robotics, a large and growing market
with a significant unmet clinical need, this capital will further
support our product development efforts and global launch of the
Magellan(TM) Robotic System."  
Mr. Barclay continued, "In recent weeks, both Dr. John Laird of the
UC Davis Medical Center and Professor Nick Cheshire of St Mary's
Hospital, of Imperial College London, presented their experiences
with the Magellan system at the VIVA conference, and Dr. Katzen
presented two live case demonstrations to attendees at TCT. These
were valuable opportunities to highlight the benefits of our Magellan
system by key opinion leaders at large conferences and we look
forward to further highlighting our technology with our significant
presence at the VEITHsymposium next week in New York City, and the
ISET 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 Magellan
system. This technology has the potential to significantly enhance
endovascular procedures. We view the Magellan system as an important
potential strategic investment that can help enhance and grow our
practice by improving procedure predictability and utilization, while
possibly lowering radiation exposure."  
Hansen Medical's new limited commercial evaluation program allows
certain strategic accounts to install and utilize its systems for a
trial period while the purchase contract is being evaluated by the
hospital. Hospitals participating in the commercial evaluation
program are not obligated to purchase the system upon completion of
the trial period, however, participating hospitals must purch
ase the
catheters used in the evaluation process. 
2012 Third Quarter Financial Results  
Total revenue for the third quarter ended September 30, 2012 was $5.1
million compared to revenue of $5.4 million in the same period in
2011. During the third quarter, the Company shipped five systems
(four Magellan systems and one Sensei system) and recognized revenue
on five systems (one Magellan system and four Sensei systems), as
well 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 in
the period, an increase of 9.3% compared to the same quarter of the
prior year, and up 3.5% sequentially. As of September 30, 2012, the
Company had a total deferred revenue balance of $2.9 million, all of
which 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 the
same period in 2011. The increase in gross profit in the current
quarter is primarily the result of improved productivity, which
lowered the cost of products sold.  
Research and development expenses for the third quarter were $3.8
million, compared to $3.5 million for the same period in 2011. The
2011 amount included $2.1 million of funded research and development
credits (recorded as a reduction of expense) from our now completed
work under our joint development agreement with Philips. Excluding
these research and development credits in the third quarter of 2011,
prior year research and development expenses were higher primarily
due to additional development costs associated with the Company's
Magellan System and higher employee related costs.  
Selling, general and administrative expenses for the third quarter
were $5.1 million, compared to $7.6 million for the same period of
2011. The net decrease in the current quarter is primarily due to a
$1.5 million insurance reimbursement received in the third quarter or
2012 related to prior litigation costs in addition to lower non-cash
stock compensation and employee-related expenses. 
Net loss for the third quarter was $8.4 million, or $0.14 loss per
share, based on average shares outstanding of 61.5 million. This
compares with a net loss for the third quarter of 2011 of $10.1
million or $0.18 per share, based on average shares outstanding of
55.1 million. Net loss for the third quarter of 2012 included total
non-cash stock compensation expenses of $1.0 million compared to $1.8
million in the third quarter of 2011. The reduction is primarily the
result of lower equity awards in the quarter compared to the prior
year.  
Cash burn in the quarter improved to $7.8 million compared to $9.1
million in the second quarter of 2012. The current quarter cash burn
was positively impacted by the receipt of a $1.5 million insurance
reimbursement. Cash, cash equivalents and short-term investments as
of September 30, 2012 were $21.6 million, compared to $29.4 million
as 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 full
2012 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 via
the 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 by
calling 888-846-5003 or 480-629-9856 (international callers). An
audio replay of the webcast will be available approximately one hour
after the completion of the conference call through November 14,
2012, by calling 877-870-5176 or 858-384-5517 (international
callers), and entering access code 4572018.  
About Hansen Medical, Inc.  
Hansen Medical, Inc., based in Mountain View, California, is the
global leader in intravascular robotics, developing products and
technology designed to enable the accurate positioning, manipulation
and control of catheters and catheter-based technologies. The
Company's Magellan(TM) Robotic System, NorthStar(TM) Robotic Catheter
and related accessories, which are intended to facilitate navigation
to anatomical targets in the peripheral vasculature and subsequently
provide a conduit for manual placement of therapeutic devices, have
undergone both CE marking and 510(k) clearance and are commercially
available in the European Union, and the U.S. In the European Union,
the Company's Sensei(R) X Robotic Catheter System and Artisan Control
Catheter are cleared for use during electrophysiology (EP)
procedures, such as guiding catheters in the treatment of atrial
fibrillation (AF), and the Lynx(R) Robotic Ablation Catheter is
cleared for the treatment of AF. This robotic catheter system is
compatible with fluoroscopy, ultrasound, 3D surface map and patient
electrocardiogram data. In the U.S. the Company's Sensei X Robotic
Catheter System and Artisan Control Catheter were cleared by the U.S.
Food and Drug Administration for manipulation and control of certain
mapping catheters in EP procedures. In the United States, the Sensei
System is not approved for use in guiding ablation procedures; this
use remains experimental. The U.S. product labeling therefore
provides that the safety and effectiveness of the Sensei X System and
Artisan Control Catheter for use with cardiac ablation catheters in
the treatment of cardiac arrhythmias, including AF, have not been
established. Additional information can be found at
www.hansenmedical.com. Additional information can be found at
www.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 statements
of historical fact, are statements that could be deemed
forward-looking statements, including statements containing the words
"plan," "expects," "potential," "believes," "goal," "estimate,"
"anticipates," and similar words. These statements are based on the
current estimates and assumptions of our management as of the date of
this press release and are subject to risks, uncertainties, changes
in circumstances and other factors that may cause actual results to
differ materially from the information expressed or implied by
forward-looking statements made in this press release. Examples of
such statements include statements about the potential benefits of
our Magellan Robotic System for hospitals, patients and physicians,
expectations of shipments of our Magellan Robotic System, the
potential benefits of our technology and the value of our
intellectual property portfolio and the sufficiency of the company's
cash resources for supporting the initial launch of the Magellan
Robotic System. Important factors that could cause actual results to
differ materially from those indicated by such forward-looking
statements include, among others: engineering, regulatory,
manufacturing, sales and customer service challenges in developing
new products and entering new markets; the commercial viability of
our products in the vascular markets; potential safety and regula
tory
issues that could slow or suspend our sales; the effect of credit,
financial and economic conditions on capital spending by our
potential customers; the uncertain timelines for the sales cycle for
newly introduced products; the rate of adoption of our systems and
the rate of use of our catheters; the scope and validity of
intellectual property rights applicable to our products; competition
from other companies; our ability to recruit and retain key
personnel; our ability to maintain our remedial actions over
previously reported material weaknesses in internal controls over
financial reporting; our ability to manage expenses and cash flow,
and obtain additional financing; and other risks more fully described
in the "Risk Factors" section of our Quarterly Report on Form 10-Q
for 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 the
forward-looking statements in this press release. We undertake no
obligation to revise or update information herein to reflect events
or circumstances in the future, even if new information becomes
available.  
Hansen Medical, Heart Design (Logo), Hansen Medical (with Heart
Design), Sensei and Lynx are registered trademarks, and Magellan and
NorthStar are trademarks of Hansen Medical, Inc. in the United States
and other countries. 


 
                                                                            
Condensed Consolidated Statements of Operations (unaudited)                 
(in thousands, except per share data)                                       
                                                                            
                                  Three months ended    Nine months ended   
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Revenues                         $   5,103  $   5,360  $  13,292  $  15,959 
Cost of goods sold                   3,846      4,278     10,550     12,685 
                                 ---------  ---------  ---------  --------- 
Gross profit                         1,257      1,082      2,742      3,274 
                                 ---------  ---------  ---------  --------- 
Operating expenses:                                                         
  Research and development           3,772      3,458     12,632     10,258 
  Selling, general and                                                      
   administrative                    5,058      7,621     19,186     22,816 
                                 ---------  ---------  ---------  --------- 
Total operating expenses             8,830     11,079     31,818     33,074 
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:    61,457     55,094     61,057     54,626 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
Condensed Consolidated Balance Sheets (unaudited)                           
(in thousands)                                                              
                                                                            
                                                 September 30,  December 31,
                                                      2012          2011    
                                                 ------------- -------------
                                   Assets                                   
  Cash, cash equivalents and short-term                                     
   investments                                   $      21,649 $      52,210
  Accounts receivable                                    4,579         5,493
  Inventories, net                                       8,387         6,617
  Deferred cost of revenues                                 73         1,573
  Prepaids and other current assets                      1,402         1,829
  Property and equipment, net                            6,616         8,300
  Other assets                                             632           737
                                                 ------------- -------------
                                                                            
Total assets                                     $      43,338 $      76,759
                                                 ============= =============
                                                                            
                    Liabilities and Stockholders' Equity                    
Liabilities                                                                 
  Accounts payable                               $       2,265 $       2,944
 
  Deferred revenues                                      2,858         6,438
  Debt                                                  29,347        29,147
  Other liabilities                                      3,952         4,749
                                                 ------------- -------------
                                                                            
Total liabilities                                       38,422        43,278
                                                 ------------- -------------
                                                                            
Stockholders' equity                                     4,916        33,481
                                                 ------------- -------------
                                                                            
Total Liabilities and Stockholders' Equity       $      43,338 $      76,759
                                                 ============= =============

  
Investor Contacts:
Peter J. Mariani
Chief Financial Officer
Hansen Medical, Inc.
650.404.5800 
FTI Consulting, Inc.
Brian Ritchie
212.850.5683
brian.ritchie@fticonsulting.com  
John Capodanno
212.850.5705
John.capodanno@fticonsulting.com 
 
 
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