Hansen Medical Reports Third Quarter and Nine-Month 2013 Results

Hansen Medical Reports Third Quarter and Nine-Month 2013 Results 
Third Quarter Revenue of $5.1 Million; Shipped Five Robotic Systems
in the Quarter; Commercialized Four Robotic Systems in the Quarter,
and One Additional System in October, Bringing the Year-to-Date Total
to Nine; Growth in Estimated Procedures Performed of 14% Quarterly,
and 24% Year Over Year 
MOUNTAIN VIEW, CA -- (Marketwired) -- 11/06/13 --  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, 2013. 
Third Quarter Financial Summary and Recent Business Highlights 


 
--  Recorded revenue of $5.1 million in the third quarter, up 52%
    sequentially and flat compared to prior year.
    
    
    --  Recognized revenue on four of the five systems shipped in the
        quarter (2 Magellan and 2 Sensei systems).
    --  The fifth system shipped in the quarter was a Magellan system that
        was placed under the Company's evaluation program.
    --  Sold 790 catheters in the third quarter, up 15% year-over-year and
        down 10% sequentially.
        
        
--  Commercialized four of the five systems shipped in the quarter, and
    commercialized one additional system in October, through the
    conversion of a Magellan evaluation unit, bringing the total number of
    systems commercialized year to date to nine. The Company uses the term
    "commercialize" to refer to revenue-generating transactions, including
    the conversion of evaluation units.
    
    
--  Physicians performed an estimated 750 Hansen robotic procedures in the
    third quarter, up 14% year-over-year and down 13% sequentially.
    
    
--  Closed a private placement of common stock and warrants that yielded
    $39 million in total gross proceeds less placement fees and estimated
    offering costs of approximately $2.1 million. As part of this
    transaction, the Company also issued warrants exercisable for
    approximately 34 million shares of common stock, which, if exercised,
    could potentially yield additional proceeds of up to $54 million,
    bringing the total potential gross proceeds to approximately $93
    million.
    
    
--  Executed an amended $33 million long-term interest-only secured term
    loan agreement. The new agreement requires interest-only payments
    through December 30, 2017, at which time the accrued principal balance
    will become due.
    
    
--  Held cash, cash equivalents, short-term investments and restricted
    cash of approximately $47.1 million at September 30, 2013, compared to
    $21.1 million at June 30, 2013. Cash received in the quarter from
    equity and debt financing activities, net of related fees and charges,
    was approximately $36.5 million. Excluding this net amount, cash burn
    in the quarter would have been approximately $10.5 million.
    
    
--  Continued to showcase the benefits and broad clinical utility of the
    Magellan system at the Vascular Interventional Advances (VIVA)
    Conference in Las Vegas in October, and through a live case
    demonstration by Dr. Barry Katzen at the Transcatheter Cardiovascular
    Therapeutics (TCT) conference in San Francisco, California.

  
Nine Months 2013 Financial Summary  


 
--  Generated year to date total revenue of $11.4 million, down 15% year
    over year.
    
    
    --  Shipped 11 robotic systems (7 Magellan systems and 4 Sensei
        systems); recognized revenue on 4 Sensei systems and 2 Magellan
        systems, as well as monthly rental income from the conversion of a
        Magellan evaluation system earlier this year.
        
    --  Sold 2,257 catheters year to date, up 15% year over year.
        
        
--  Physicians performed an estimated 2,395 procedures year to date, up
    24% year over year.

  
"We continue to see growing momentum in our business, as reflected by
the commercialization of four robotic systems in the third quarter,
an additional system in the month of October, and year-to-date
procedure growth of 24%," said Bruce Barclay, Hansen Medical's
President and Chief Executive Officer. "Hospitals continue to be
challenged to manage costs and to make capital spending decisions
carefully, given the uncertainties stemming from the implementation
of the Affordable Care Act and headwinds recently reported in the
capital equipment sector. However, the Magellan and Sensei systems
offer hospitals the opportunity to attract more patients and improve
utilization in this cost constrained environment and we are
encouraged by the progress being made with our pipeline of potential
deals."  
Mr. Barclay continued, "Our strategy to expand the clinical
applications of the Magellan Robotic System is progressing, as the
number of clinical cases performed by physicians in a broad set of
anatomical targets continues to grow, and the breadth of experience
gained with our current 9Fr catheter continues to expand.
Additionally, development of our smaller 6Fr catheter continues
toward anticipated regulatory clearance in the U.S. in the first
quarter of 2014. This lower profile catheter is responsive to certain
physician operators who prefer a smaller femoral puncture site, and
allows access to smaller vessels potentially expanding the clinical
utility to multiple new clinical targets."  
"We are pleased to have received $39 million of the up to $93 million
private placement transaction completed in the quarter with certain
of our largest shareholders and board members and other investors,"
noted Peter J. Mariani, Hansen Medical's Chief Financial Officer.
"This transaction, together with the amended $33 million long-term,
interest-only debt facility, provides the Company with the long-term
capital foundation to expand the commercial launch of our Magellan
family of products, drive further adoption of our Sensei system and
continue to strengthen and scale operations across the Company." 
2013 Third Quarter Financial Results  
Total revenue for the third quarter ended September 30, 2013 was
approximately flat at $5.1 million compared to the same period in
2012. During the third quarter, the Company recognized product
revenue on the shipment of four robotic systems shipped in the
quarter, as well as on the shipment of 790 catheters. In the prior
year, revenue was recognized on five robotic systems, two of which
were shipped in the quarter, and three were shipped prior to 2012.
Third quarter 2013 catheter sales were up 15% compared to the third
quarter of 2012 and down 10% sequentially. Further, an estimated 750
Hansen robotic procedures were performed in the quarter, an increase
of 14% compared to the same quarter of the prior year, and down 13%
sequentially. The sequential decline in catheter sales and procedures
was due primarily to seasonal weakness experienced in Europe, which
was partially offset by continued sequential growth in the U.S.  
Cost of revenues for the third quarter was $3.7 million. As a result,
gross profit for the quarter was $1.3 million or 26% of revenue,
compared to gross profit of $1.3 million or 25% of revenue, for the
same period in 2012.  
Research and development expenses for the third quarter were
approximately flat at $3.8 million, compared to the same period in
2012. Current quarter research and development expenses included
costs associated with the development of the Company's 6Fr Magellan
catheter product and additional clinical pr
ograms.  
Selling, general and administrative expenses for the third quarter
were $7.7 million, compared to $5.1 million for the same period of
2012. The net increase in the current quarter is primarily due to a
$1.5 million insurance reimbursement received in the third quarter of
2012 related to prior litigation costs, as well as $1.0 million of
additional litigation and financing costs incurred in the current
period.  
Net loss for the third quarter was $13.2 million, or $0.16 per share,
based on average shares outstanding of 84.1 million. This compares
with a net loss in the previous quarter of $13.4 million, or $0.20
per share, based on average shares outstanding of 67.6 million, and a
net loss for the third quarter of 2012 of $8.4 million, or $0.14 per
share, based on average shares outstanding of 61.5 million. Net loss
for the third quarter of 2013 included total non-cash stock
compensation expenses of $1.2 million compared to $1.3 million in the
previous quarter and $1.0 million in the third quarter of 2012. Net
loss and net loss per share for the third quarter of 2013 was
negatively impacted by the $1.0 million of litigation and financing
costs noted above, as well as the $1.9 million charge recorded as a
loss on the termination of the previous debt agreement. These items
total $2.9 million or $0.03 per share. Further, the private placement
of common stock completed in the third quarter increased the number
of weighted average shares outstanding by 16.4 million shares which
positively impacted net loss per share by $0.04 compared to the
previous quarter. 
Cash, cash equivalents, short-term investments and restricted cash as
of September 30, 2013 were $47.1 million, compared to $21.1 million
as of June 30, 2013, and $41.2 million as of December 31, 2012. Cash
received in the quarter from financing transactions, net of related
fees and charges, was approximately $36.5 million. Excluding this net
amount, cash burn in the quarter would have been approximately $10.5
million, compared to $10.2 million in the second quarter of 2013.  
Full-Year 2013 Outlook  
Hansen Medical continues to expect the commercialization of 14 to 17
robotic systems in 2013, and total estimated procedures of between
3,200 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 continues to expect that
operating expenses in the second half of 2013 will be less than
operating expenses in the first half of 2013, excluding the $4.5
million litigation settlement charge recorded in the first quarter,
despite the Company's intention to continue adding 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 now expects FDA
clearance of its 6Fr Magellan catheter for use in smaller vessel,
peripheral applications in the first quarter of 2014. 
Hansen Medical Earnings Release and Conference Call  
Hansen Medical is scheduled to report the final third quarter 2013
results and host a conference call on November 6, 2013, at 5:00 p.m.
ET (2:00 p.m. PT) at which point the Company will discuss in more
detail the results of the quarter and other recent business
highlights. 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 877-941-2068 (480-629-9712 for international callers). An
audio replay of the webcast will be available approximately one hour
after the completion of the conference call through November 13,
2013, by calling 877-870-5176 (858-384-5517 for international
callers) and entering the access code 4644719.  
About Hansen Medical, Inc.  
Hansen Medical, Inc., based in Mountain View, California, is a 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, 9Fr Magellan(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(R) and
Artisan Extend(R) Control Catheters 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 and Artisan
Extend Control Catheters are cleared by the U.S. Food and Drug
Administration for manipulation and control of certain mapping
catheters in EP procedures. In the U.S., the Sensei X Robotic
Catheter 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
Robotic Catheter System and Artisan and Artisan Extend 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," 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 regarding anticipated ranges of
the commercialization of the Company's robotic systems and of robotic
procedures in 2013, expectations for the Company's gross margins and
operating expenses in 2013, the anticipated timing of the FDA
clearance of a 6Fr vascular catheter, and statements about the
anticipated growth in Hansen Medical intravascular robotics
technology for EP and vascular applications. Important factors that
could cause actual results to differ materially from those indicated
by such forward-looking statements include, among others: factors
relating to engineering, regulatory, manufacturing, sales and
customer service challenges in developing new products and entering
new markets; potential safety and regulatory 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, 2013
filed with the SEC on August 9, 2013 and the risks discussed in our
other reports filed with the SEC. Given these uncertainties, you
should not place undue relia
nce 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. 


 
                                                                            
                            HANSEN MEDICAL, INC.                            
               Condensed Consolidated Statements of Operations              
                   (In thousands, except per share data)                    
                                 (Unaudited)                                
                                                                            
                                    Three Months Ended   Nine Months Ended  
                                       September 30,       September 30,    
                                    ------------------  ------------------  
                                      2013      2012      2013      2012    
                                    --------  --------  --------  --------  
Revenues:                                                                   
  Product                           $  3,834  $  3,868  $  7,494  $  9,376  
  Service                              1,234     1,235     3,868     3,916  
                                    --------  --------  --------  --------  
    Total revenues                     5,068     5,103    11,362    13,292  
Cost of revenues:                                                           
  Product                              3,226     3,358     7,193     9,068  
  Service                                502       488     1,784     1,482  
                                    --------  --------  --------  --------  
    Total cost of revenues             3,728     3,846     8,977    10,550  
                                    --------  --------  --------  --------  
Gross profit                           1,340     1,257     2,385     2,742  
                                    --------  --------  --------  --------  
Operating expenses:                                                         
  Research and development             3,827     3,772    12,417    12,632  
  Selling, general and                                                      
   administrative                      7,703     5,058    23,718    19,186  
  Loss on settlement of litigation        --        --     4,500        --  
                                    --------  --------  --------  --------  
Total operating expenses              11,530     8,830    40,635    31,818  
                                    --------  --------  --------  --------  
Loss from operations                 (10,190)   (7,573)  (38,250)  (29,076) 
Loss on extinguishment of debt        (1,935)       --    (1,935)       --  
Other expense, net                    (1,036)     (858)   (3,556)   (2,642) 
                                    --------  --------  --------  --------  
Loss before income taxes             (13,161)   (8,431)  (43,741)  (31,718) 
Income tax expense                       (40)       --       (93)       --  
Net loss                            $(13,201) $ (8,431) $(43,834) $(31,718) 
                                    ========  ========  ========  ========  
Basic and diluted net loss per                                              
 share                              $  (0.16) $  (0.14) $  (0.60) $  (0.52) 
                                    ========  ========  ========  ========  
Shares used to compute basic and                                            
 diluted net loss per share           84,145    61,457    73,081    61,057  
                                                                            
                                                                            
                                                                            
                            HANSEN MEDICAL, INC.                            
                    Condensed Consolidated Balance Sheets                   
                    (In thousands, except per share data)                   
                                 (Unaudited)                                
                                                                            
                                                September 30,  December 31, 
                                                     2013           2012    
                                               -------------- --------------
ASSETS                                                                      
  Cash, cash equivalents and short-term                                     
   investments                                 $       42,030 $       41,173
  Accounts receivable, net                              4,294          5,235
  Inventories                                          11,800          9,134
  Deferred cost of revenues                               574            167
  Prepaids and other current assets                     2,104          1,765
  Property and equipment, net                           4,160          6,040
  Restricted cash                                       5,065             --
  Other assets                                          1,723            578
                                               -------------- --------------
    Total assets                               $       71,750 $       64,092
                                               ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
  Accounts payable                             $        3,378 $        3,056
  Deferred revenue                                      3,396          2,770
  Debt                                                 33,105         29,417
  Other liabilities                                     9,000          4,110
                                               -------------- --------------
    Total liabilities                                  48,879         39,353
                                               -------------- --------------
    Total stockholders' equity                         22,871         24,739
                                               -------------- --------------
    Total liabilities and stockholders' equity $       71,750 $       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