Analyst Conference Summary

Hansen Medical

conference date: August 4, 2010 @ 2:00 PM Pacific Time
for quarter ending: June 30, 2010 (second quarter 2010)

(at the time this is being written)
Forward-looking statements

Overview: Revenue was up on increased recognition of systems shipped, but only 3 new systems shipped in the quarter. Hansen is still mainly a development-stage company, with new product development costs exceeding revenues.

Basic data (GAAP) :

Revenue was $7.0 million, up 159% sequentially from $2.7 million, and up 133% from $3.0 million in the year-earlier quarter.

Net income was negative $10.9 million, down sequentially from negative $3.8 million, but up from negative $14.6 million year-earlier.

EPS (earnings per share) were negative $0.22, down sequentially from negative $0.10, but up from negative $0.42 year-earlier.


Based on pipeline, system shipments in second half of 2010 will be higher than in first half. However, withdrawing previous higher guidance. Will provide new guidance after a complete review.

Conference Highlights:

Bruce Barclay is the new president and CEO. Stock price reflects delays, but not the upside from the technologies developed and under development. Will focus on execution. Three priorities: growing current EP business; development and commercialization of vascular platform; lowering cash burn by focus on areas of value creation. Does not believe poor past performance was entirely due to macroeconomics.

Seven Sensei Robotic Systems had recognized revenue, up sequentially from just 1, but shipped just 3 systems, down from 7 in Q1. Total systems sold since launch was 91, with revenue recognized so far on 77 systems. Deferred revenue balance ended at $10.3 million for 14 systems shipped but not recognized. 2 of shipped systems were to U.S., 1 to Europe. Sales cycle continues to be 6 to 18 months, but environment is improving. $658,000 average selling price, down from $690,000 sequentially do to sales through a distributor.

555 Artisan Control Catheters were recognized for revenue, down sequentially from 637 and also down from year earlier. $1600 average selling price, about flat.

60 customers now are on extended service agreements.

Electrophysiology procedures in the first half of 2010 were up 50% compared to the first half of 2009.

A pre-clinical in-vivo study of the new vascular robot was successfully completed in the quarter. This will open up a large new market. Philips agreement is on track; they are partially funding development. Completed second milestone and should receive payment in Q3. Expect to file this year for U.S. and European approval.

A joint development agreement with Siemens Healthcare was signed, for integrated products for cardiac procedures. The goal is to improve visualization for EP procedures.

Enrollment was begun in the conditional IDE clinical trial evaluating the system for Atrial Fibrillation (AF) therapy. There are some new, but minor, FDA questions that are being resolved, so enrollment will extend into 2011.

$29.8 million of new capital was raised early in the quarter. Cash and equivalents ended at $44.2 million. $8.1 million cash burn in quarter.

Cost of good sold was $4.5 million, leaving gross profit of $2.5 million. Operating expenses of $13.3 million included $6.1 million for Research and Development, with selling general and administrative of $7.2 million. Loss from operations was $10.8 million, loss from other was $0.1 million.

Reductions in SG&A expense will be offset by increased R&D expense in the second half.

The majority of systems with unrecognized revenues were sold through international distributors, so their actions determine when revenue can be recognized.


Philips milestone payment? Arrangement is confidential. Payments are in the single millions range, would appear in accounts receivable.

Catheter sales flat versus 50% increase in procedures? This is an inventory issue. In Q2 we had more procedures performed than catheters sold.

Artisan AF trial questions? This was a conditional FDA approval. First patient was in May. Questions were about the protocol for the mapping used. There is no question about enlarging or lengthening the trial.

A focus is learning from the best Sensei EP users and conveying that to other users and potential customers.

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Copyright 2010 William P. Meyers