Hansen Medical, Inc., the global leader in flexible robotics and the developer of robotic technology for accurate 3D control of catheter movement, reported its business highlights and financial results for the fourth quarter and full-year ended December 31, 2008.
Catheter Sales: The company shipped and recognized revenue on 520 ArtisanTM Control Catheters in the fourth quarter, a record for a single quarter.
Revenue Growth: The company generated fourth quarter revenues of $7.3 million, a 74% year-over-year increase. Full-year 2008 revenues are $30.2 million.
CoHesion Adoption: Of the 10 systems sold in the fourth quarter, seven were configured with CoHesion modules, and two additional CoHesion modules were sold to the existing installed base.
Philips Partnership: The company recently announced joint development and cooperation agreements with Royal Philips Electronics to co-develop integrated products for the electrophysiology (EP) market targeting applications to enhance visualization capabilities.
"I am pleased with our progress and accomplishments during this past year," said Frederic Moll, M.D., co-founder and chief executive officer of Hansen Medical. "Adoption rates for our technology have been strong, with an installed base of 55 systems worldwide since we began commercial shipments in May 2007. In addition, we made important investments in our business and established partnerships that we believe put us in a position to significantly expand our technology in the years ahead. We are also encouraged by the progress we are making in markets outside EP and believe that this success provides evidence of the opportunity to leverage the Sensei platform into a variety of other interventional applications," concluded Dr. Moll.
2008 Fourth Quarter Financial Results
Total revenue for the three months ended December 31, 2008 was $7.3 million, a 74% increase compared to revenue of $4.2 million in the same period in 2007. The company recognized revenue on 10 Sensei Robotic Systems, including seven systems configured with the CoHesionTM module, as well as on shipments of 520 Artisan control catheters.
Cost of goods sold for the three months ended December 31, 2008 was $5.2 million and included non-cash stock compensation expense of $210,000. Gross profit for the quarter was $2.1 million, yielding a gross margin of 28.7%. This compares to gross profit of negative $23,000 and negative gross margin of 0.5% for the same period in 2007, which included non-cash stock compensation expense of $139,000. The company expects that cost of goods sold for 2009, both as a percentage of revenue and on a dollar basis, will continue to vary from quarter to quarter as manufacturing levels fluctuate and as revenues fluctuate due to changes in system sales volumes, product mix and average sales prices per system.
Research and development expenses for the three months ended December 31, 2008, including non-cash stock compensation expense of $741,000, were $6.8 million, compared to $5.1 million for the same period in 2007, which included non-cash stock compensation expense of $494,000. The increase in research and development expenses was primarily due to increased employee-related expenses due primarily to higher average headcount, increased outside services, materials and overhead expenses, along with higher non-cash stock compensation expenses. In 2009, the company expects research and development expenses to decline modestly from levels in 2008 as it carefully manages expenses related to development efforts for the EP market and other applications and realizes savings from the company's recently completed reduction in force.
Selling, general and administrative expenses for the three months ended December 31, 2008, including non-cash stock compensation expense of $2.7 million, were $10.1 million, compared to $7.9 million for the same period in 2007, which included non-cash stock compensation expense of $1.4 million. The increase in selling, general and administrative expenses was primarily due to increased employee-related expenses related to higher average headcount necessary to support continued growth, legal costs related to procuring and protecting the company's intellectual property, separation costs for two executives and increased non-cash stock compensation expenses. In 2009, the company expects selling, general and administrative expenses to decline slightly from 2008 levels as a result of careful expense management and savings realized from the recently completed reduction in force.
Other loss, net, for the three months ended December 31, 2008 was $102,000, compared to other income, net, of $545,000 for the same period in 2007. The change was primarily due to higher interest expense due to the company's borrowings under its new equipment line of credit, in addition to lower interest income related to lower balances of average cash, cash equivalents and short-term investments.
Net loss for the three months ended December 31, 2008, including total non-cash stock compensation expense of $3.6 million, was $14.9 million, or $(0.59) per basic and diluted share, based on average basic and diluted shares outstanding of 25.2 million shares. Net loss for the fourth quarter of 2007, including non-cash stock compensation expense of $2.0 million, was $23.9 million, or $(1.10) per basic and diluted share, based on average basic and diluted shares outstanding of 21.7 million shares.
Cash, cash equivalents and short-term investments as of December 31, 2008 were $35.2 million, compared to $48.6 million as of December 31, 2007. The lower cash balance is due to the company's operating expenses and $18.4 million in capital expenditures during 2008, primarily related to the build-out of the company's new facility, partially offset by capital raised from financing activities during the year.
About Hansen Medical, Inc.
Hansen Medical Inc., based in Mountain View, Calif., develops products and technology using robotics for the accurate positioning, manipulation and control of catheters and catheter-based technologies. Its first product, the Sensei(TM) Robotic Catheter system, is a robotic navigation system that enables clinicians to place mapping catheters in hard-to-reach anatomical locations within the heart easily, accurately and with stability during complex cardiac arrhythmia procedures. The Sensei system is compatible with fluoroscopy, ultrasound, 3D surface map and patient electrocardiogram data and was cleared by the U.S. Food and Drug Administration (FDA) in May 2007 for manipulation and control of certain mapping catheters in Electrophysiology (EP) procedures. The safety and effectiveness of the Sensei system for use with cardiac ablation catheters in the treatment of cardiac arrhythmias, including atrial fibrillation (AF), have not been established. In the European Union, the Sensei system is cleared for use during EP procedures, such as guiding catheters in the treatment of AF. Additional information can be found at www.hansenmedical.com.