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Hansen Medical Reports First Quarter 2013 Results

Hansen Medical Reports First Quarter 2013 Results 
Company Provides Updated Outlook for Full-Year 2013; Anticipating
Commercialization of 14 to 17 Robotic Systems and Total Estimated
Procedures of 3,100 to 3,400; Nine Clinical Magellan Systems
Installed and Performing Clinical Procedures; Company Reports Record
Procedures and Seventh Consecutive Quarter of Procedure Growth 
MOUNTAIN VIEW, CA -- (Marketwired) -- 05/08/13 --  Hansen Medical,
Inc. (NASDAQ: HNSN), a global leader in intravascular robotics, today
reported recent business highlights and financial results for the
first quarter ended March 31, 2013.  
Recent Business Highlights  


 
--  Shipped four systems (3 Magellan(TM) Systems and 1 Sensei(R)
    System) in the first quarter
    --  Of the four systems shipped, the Sensei System was sold, and the
        three Magellan Systems were shipped as part of the Company's
        commercial evaluation program; the commercial evaluation program
        allows certain strategic accounts to install and utilize Hansen
        Medical robotic systems for a trial period while the purchase
        opportunity is being evaluated by the hospital
        
        
--  Continuing to develop strong pipeline of potential system sales
    --  Anticipating the commercialization of 14 to 17 Magellan and Sensei
        Systems in 2013
    --  Agreed to convert one evaluation system to a monthly payment
        program effective April 1 through a potential purchase date in Q4
    --  In advanced discussions with multiple institutions in both the
        U.S. and Europe to become regional training and reference centers
        
        
--  Nine Magellan systems are installed and in clinical use at March 31.
    Approximately 150 vascular cases have now been performed to date using
    the Magellan System, demonstrating broad clinical applications in the
    peripheral vasculature
    
    
--  Physicians performed an estimated record 781 Hansen robotic procedures
    in the first quarter, up 23% year over year and 3% sequentially. This
    is the seventh consecutive quarter of procedure growth; providing
    outlook of total estimated procedures of between 3,100 and 3,400 in
    2013, which would represent growth of approximately 15% to 25%
    compared to 2012.
    
    
--  Exhibited the Magellan System at the 2013 Charing Cross Symposium in
    London, which included five separate presentations from industry
    leading physicians discussing the benefits of the System
    
    
--  Two live endovascular aortic aneurysm repair (EVAR) cases successfully
    performed by Dr. Barry Katzen at the 25th Annual International
    Symposium on Endovascular Therapy ISET25 in Miami, FL, in January;
    additional live cases are anticipated at the European Association for
    Percutaneous Cardiovascular Interventions (EuroPCR) congress to be
    held in Paris, France, on May 21 - 24
    
    
--  Filed 30 new patent applications relating to flexible medical robotics
    during the first quarter
    --  Hansen Medical owns or has exclusive rights to approximately 250
        issued patents and pending patent applications relating to medical
        robotics, in addition to hundreds of other patents and patent
        applications which the Company has shared rights to use under
        various third-party license agreements
        
        
--  Strengthened Leadership Team: In newly created positions, hired Will
    Sutton as Chief Operating Officer, and Bob Cathcart as Senior Vice
    President, Global Sales, to build further operational and commercial
    expertise
    --  Continued building the Company's sales organization through hiring
        of sales representatives with significant capital equipment
        experience
    --  Filling important positions in clinical support and management,
        marketing and sales operations
        
        
--  First Quarter 2013 Financial Summary
    --  Generated revenue of $2.9 million in the first quarter, down 37%
        year-over-year
        --  Recognized revenue on 1 Sensei system during the first quarter
        --  Sold 592 catheters in the first quarter, up 3% year-over-year
            and down 30% sequentially. Consistent with the prior year,
            hospitals reduced the level of catheter inventory held in the
            first quarter compared to year-end, resulting in a sequential
            decrease in catheter sales.
        --  Held cash, cash equivalents and short-term investments of
            $31.3 million at March 31, 2013, representing a quarterly cash
            burn of $9.9 million
            --  The Company has not sold any shares of its common stock
                under its recently executed 'at-the-market' agreement

  
"In a little over two quarters, the Company has gone from having just
one installed clinical Magellan Robotic System to nine total clinical
installations that are involved in treating patients and generating
data, as of March 31," said Bruce Barclay, Hansen Medical's President
and Chief Executive Officer. "I am encouraged by the breadth of
clinical applications in the peripheral vasculature and the positive
experiences that are being generated at these hospitals. These varied
applications are demonstrating the real-world medical utility of
Hansen Medical's systems, and helping to drive further interest and
adoption of our technology. Today, we are reporting another quarter
of record procedures, marking the seventh consecutive quarter of
procedure growth. This is further evidence of the value we believe
physicians and hospitals can, and are, experiencing with our
intravascular robotic systems. We are particularly encouraged by
recent in vitro data and clinical experiences regarding the potential
benefits of endovascular robotics in the treatment of carotid artery
disease."  
Mr. Barclay continued, "As noted above, we have a strong and growing
pipeline of potential commercial transactions and are in advanced
discussions with several accounts regarding the potential purchase of
systems. Additionally, we are in advanced discussions with multiple
institutions in both the U.S. and Europe to become regional training
and reference centers for the Magellan System. Given the number of
positive indicators we are seeing, including the status of our
discussions with various accounts, we can now update our 2013 outlook
to anticipate the commercialization of 14 to 17 robotic systems in
2013. While there is no guarantee that these hospitals will
ultimately purchase a system this year, we are excited about the
direction of these ongoing discussions and remain optimistic about
the potential of these sales opportunities." 
2013 First Quarter Financial Results  
Total revenue for the first quarter ended March 31, 2013 was $2.9
million compared to revenue of $4.7 million in the same period in
2012. During the first quarter, the Company recognized revenue on one
Sensei system, as well as the shipment of 592 catheters. Catheter
sales were up 3% compared to the first quarter of 2012 and down 30%
sequentially. Further, an estimated record 781 Hansen robotic
procedures were performed in the quarter, an increase of 23% compared
to the same quarter of the prior year, and up 3% sequentially.  
Cost of revenues for the first quarter was $2.5 million. As a result,
gross profit for the quarter was $469,000 or 16% of revenue, compared
to gross profit of $732,000 or 16% of revenue, for the same period in
2012.  
Research and development expenses for the
 first quarter were $4.1
million, compared to $4.3 million for the same period in 2012. Prior
year research and development expenses were higher primarily due to
additional costs associated with the Company's Magellan System and
other product development initiatives, partially offset by an
increase in non-cash stock compensation.  
Selling, general and administrative expenses for the first quarter
were $7.4 million, flat with $7.4 million for the same period of
2012. Decreases in commissions due to lower sales volume and other
employee-related costs were offset by increases in professional fees,
primarily legal fees due to increased patent applications activities,
and an increase in non-cash stock compensation.  
The Company has reached an agreement in principle to settle all
claims related to the class action suit regarding the restatement of
Hansen Medical's financial statements that was first reported in
October 2009. The settlement is subject to execution of final
documents and to final court approval, which the Company expects to
receive within approximately six months. As a result, the Company
recorded a loss on settlement of litigation of $4.5 million in the
first quarter. The loss represents the Company's portion of the total
$8.5 million settlement amount, whereby the Company's insurance
provider and another third party will fund $4.0 million of the
settlement in cash, and the Company will fund the remaining portion
by issuing $4.25 million worth of shares of common stock, the number
of shares to be determined based on the average closing price of the
Company's stock for the 10 trading days preceding final court
approval of the settlement of the Class Action, and paying $250,000
in cash.  
Net loss for the first quarter was $17.2 million, or $0.26 per share,
based on average shares outstanding of 67.3 million. This compares
with a net loss for the first quarter of 2012 of $11.8 million, or
$0.20 per share, based on average shares outstanding of 60.5 million.
Net loss for the first quarter of 2013 included total non-cash stock
compensation expenses of $1.1 million compared to $279,000 in the
first quarter of 2012. The first quarter of 2012 included a one-time
adjustment of $740,000 related to previously recorded expenses for
the Company's employee stock purchase program affecting all expense
categories. 
Cash, cash equivalents and short-term investments as of March 31,
2013 were $31.3 million, compared to $41.2 million as of December 31,
2012. Cash burn in the quarter was $9.9 million compared to a cash
gain of $19.5 million in the fourth quarter of 2012.  
Updated Full-Year 2013 Outlook  
Hansen Medical anticipates the commercialization of 14 to 17 total
robotic catheter systems in 2013, as well as total estimated
procedures of between 3,100 and 3,400 during the year. The Company
continues to expect improvement in gross margins over 2012 levels
based on current volume assumptions of product sales and increased
efficiency from cost savings initiatives. Hansen Medical also
continues to anticipate that operating expenses will increase
moderately, as the Company expects to add resources to support the
commercial launch of the Magellan System and the continuing adoption
of the Sensei System. Hansen Medical will continue to invest in new
products in 2013, and the Company anticipates the commercial launch
of its 6F vascular catheter for use in smaller vessel, peripheral
applications by the end of 2013. For purposes of the Company's 2013
outlook, the term "commercialize" refers to revenue-generating
transactions, including the conversion of evaluation units.  
Hansen Medical Conference Call  
Company management will hold a conference call to discuss its first
quarter 2013 results today, May 8, 2013 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 877-941-1428 (480-629-9665 for international callers). An
audio replay of the webcast will be available approximately one hour
after the completion of the conference call through May 15, 2013, by
calling 877-870-5176 (858-384-5517 for international callers) and
entering the access code 4617017.  
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.  
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," "outlook," and similar words. These statements are
based on the current estimates and assumptions of 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 the Magellan Robotic System for hospitals,
patients and physicians, the anticipated range of the
commercialization of the Company's robotic systems and the range of
estimated procedure for 2013, expectations of gross margins and
operating expenses for 2013, and the anticipated timing of
commercially launching a 6F vascular catheter. Important factor
s 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 the Company's products in the vascular
markets; potential safety and regulatory issues that could slow or
suspend sales; the effect of economic conditions on capital spending
by potential customers; the uncertain timelines for the sales cycle
for newly introduced products and the resulting difficulties in
forecasting the timing of sales; failures to close system sales with
interested prospects; the rate of adoption of systems and the rate of
use of systems by hospitals and physicians; the scope and validity of
intellectual property rights applicable to our products; competition
from other companies; the ability to recruit and retain key
personnel; the ability to maintain adequate internal controls over
fin
ancial reporting; the ability to manage expenses and cash flow,
and obtain additional financing; possible failure of the parties to
execute final settlement documents relating to the class action
lawsuit, or to obtain court approval of the settlement, or delays in
final court approval of the proposed settlement ; and other risks
more fully described in the "Risk Factors" section of our Annual
Report on Form 10-K for the year ended December 31, 2012 filed with
the SEC on March 18, 2013 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. The Company undertakes 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. 


 
                               HANSEN MEDICAL                               
                                                                            
              Condensed Consolidated Statements of Operations               
                                (unaudited)                                 
                    (in thousands, except per share data)                   
                                                                            
                                                      Three months ended    
                                                           March 31,        
                                                   ------------------------ 
                                                       2013         2012    
                                                   -----------  ----------- 
Revenues:                                          $     2,951  $     4,654 
Cost of revenues                                         2,482        3,922 
                                                   -----------  ----------- 
Gross profit                                               469          732 
                                                   -----------  ----------- 
Operating expenses:                                                         
  Research and development                               4,112        4,298 
  Selling, general and administrative                    7,418        7,359 
  Loss on settlement of litigation                       4,500           -- 
                                                   -----------  ----------- 
Total operating expenses                                16,030       11,657 
Loss from operations                                   (15,561)     (10,925)
Other expense, net                                      (1,588)        (886)
                                                   -----------  ----------- 
Loss before income taxes                               (17,149)     (11,811)
Income tax expense                                         (38)          -- 
                                                   -----------  ----------- 
Net loss                                           $   (17,187) $   (11,811)
                                                   ===========  =========== 
                                                                            
Basic and diluted net loss per share               $     (0.26) $     (0.20)
                                                   ===========  =========== 
Shares used to compute basic and diluted net loss                           
 per share                                              67,296       60,497 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            
                               HANSEN MEDICAL                               
                                                                            
                    Condensed Consolidated Balance Sheets                   
                                (unaudited)                                 
                               (in thousands)                               
                                                                            
                                                               December 31, 
                                               March 31, 2013      2012     
                                               -------------- --------------
                                   Assets                                   
                                                                            
  Cash, cash equivalents and short-term                                     
   investments                                 $       31,320 $       41,173
  Accounts receivable                                   3,377          5,235
  Inventories, net                                     10,740          9,134
  Deferred cost of revenues                               238            167
  Prepaids and other current assets                     1,704          1,765
  Property and equipment, net                           5,299          6,040
  Other assets                                            542            578
                                               -------------- --------------
                                                                            
Total assets                                   $       53,220 $       64,092
                                               ============== ==============
                                                                            
                                                                            
                    Liabilities and Stockholders' Equity                    
                                                                            
Liabilities                                                                 
  Accounts payable                             $        3,022 $        3,056
  Deferred revenues                                     2,446          2,770
  Debt                                                 29,491         29,417
  Other liabilities                                     8,818          4,110
                                               -------------- --------------
                                                                            
Total liabilities                                      43,777         39,353
                                               -------------- --------------
                                                                            
Stockholders' equity                                    9,443         24,739
                                               -------------- --------------
                                                                            
Total liabilities and stockholders' equity     $       53,220 $       64,092
                                               ============== ==============

  
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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