Hansen Medical CEO Discusses Q4 2010 - Earnings Call Transcript

Hansen Medical, Inc. ( HNSN)

Q4 2010 Earnings Call

February 23, 2011 05:00 pm ET

Executives

Matt Clawson – Investor Relations, Allen & Caron Inc.

Bruce Barclay – President and Chief Executive Officer

Peter Osborne – Interim Chief Financial Officer

Analysts

Tim Lee – Piper Jaffray Roche

David Lewis -- Morgan Stanley

Presentation

Operator

Good afternoon, ladies and gentlemen, thank you for standing by. Welcome to the Hansen Medical fourth quarter and year end conference call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator instructions)

I would now like to turn the conference over to our host Mr. Matt Clawson, with Allen & Caron. Please go ahead sir.

Matt Clawson

Thank you, Jeremy. Good afternoon, everyone. Welcome to Hansen Medical’s 2010 fourth quarter and yearend results conference call. With us today are Hansen Medical’s President and CEO, Bruce Barclay; and the Company’s Interim Chief Financial Officer, Peter Osborne.

Before I turn the call over to management, please remember that our prepared remarks and responses to questions will contain forward-looking statements that are subject to a number of risks and uncertainties, the examples of such statements include statements about the expectations for commercializing our vascular roboting system, and the fossil technology, expectations regarding procedure and shipment trends, expectations round operating expense levels and the sufficiency of cash to support the launch of the next generation flexible catheter robotic flexible technology, important factors that could cause actual results may differ materially from those indicated by forward looking statements include, among others, that the development of new products and applications of technology are subject to design, engineering, manufacture challenges that could delays and uncertain timelines, costs, and results of clinical studies and of development.

Clinical studies, regulatory filings, and commercialization. Potential regulatory issues that could delay, suspend, or terminate clinical studies, regulatory approvals for sales, uncertain timeline costs, and the results of trials and the development of new products; our ability to plan, and manage cost reduction or operational efficiency initiatives; the scope and validity of intellectual property rights applicable to products being developed, additional cost or resources necessary to address these existing or potential claims, the procedures related to the safety and regulatory issues that could slow or suspend sales.

The rate of adoption of our systems and the rate of use of our catheters at customers that have purchased our systems; our ability to successfully manage our manufacturing and operating expenses; the scope and validity of intellectual property rights applicable to our products; competition from other companies; the effect of credit, financial and general economic conditions on capital spending by potential purchasers of our systems; additional cost and resources necessary to address existing and potential claims and proceedings related to the restatement of our financial statements; our ability to remediate material weakness in internal controls over financial reporting and other risks detailed in the Risk Factors section of our periodic SEC filings, including our quarterly report on Form 10-Q for the three months ended September 30, 2010 as filed with the SEC on November 9, 2010 of this year.

Given these uncertainties, you should not place undue reliance on the forward looking statements made during this call. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future even if new information becomes available.

With that, it’s now my pleasure to turn the call over to Hansen Medical’s President and CEO, Bruce Barclay. Good afternoon, Bruce.

Bruce Barclay

Thank you Matt. Good afternoon everyone. Thank you all for joining us for our fourth quarter and full year 2010 results conference call. As you saw from the press release this afternoon, Q4 2010 and the first two months of 2011 have been very productive at Hansen. The pace of change is accelerating and the progress we are making implementing our strategic initiatives is very encouraging. Some of the recent business highlights include closing a major deal with Phillips by monetizing a portion of our intellectual property for non-core applications outside of robotics. This transaction generated a $29 million upfront payment, and Hansen has the potential to receive up to $78 million in future payments, if the technology is commercialized successfully.

Second, generating record catheter sales and product utilization in the EP market, third fully launching our new Lynx ™, an irrigated ablation catheter in Europe, fourth, gaining unconditional IDE approval from FDA for the artisan clinical trials, fifth, unveiling the new flexible catheter vascular system, at an important endovascular symposium. Sixth, hiring key senior leadership for US commercial sales, engineering, and training in clinical affairs, and seventh, opening our new European headquarters and clinical education center, to start the base to grow our international business in 2011 and beyond.

In achieving these milestones, I’ve been impressed with the ability of the entire organization, including both new and longtime employees, to adopt a new commercial focus and culture of execution that will be critical to our success. And many highlights in the period reflect that commitment and energy. Operating and financial results for Q4 showed encouraging momentum as well. As noted, we posted strong increases in EP utilization, as we delivered record catheter sales and procedures and impressive growth in both, increasing 24% and 34% over Q4 2009 respectively. In addition, we reduced OpEx by $3 million versus Q4 2009, and cut cash used in operations by $5 million versus Q4 2009; a significant achievement considering the high level of development and other non-selling activities undertaken in the period.

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