Hansen Medical's CEOs Discuss 1Q 2012 Financial Results - Earnings Call Transcript

Call start: 17:00

Call End: 18:00

Hansen Medical, Inc. (HNSN)

1Q 2012 Earnings Call

May 2, 2012 17:00 p.m. ET

Executives

Bruce J Barclay – President and Chief Executive Officer

Peter J. Mariani – Chief Financial Officer

Analysts

Bill Carlyle – Morgan Stanley

Brooks West – Piper Jaffray

Jeffrey Cohen – Ladenburg Thalmann & Co.

Presentation

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Hansen Medical 2012 First Quarter 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) This conference is being recorded today Wednesday, May 2, 2012.

I'd now like to turn the conference over to Mr. Pete Mariani, Chief Financial Officer. Please go ahead, sir.

Peter J. Mariani

Thank you, Operator, good afternoon everyone. Welcome to Hansen Medical's 2012 first quarter results conference call. With me today is Bruce Barclay, Hansen Medical's President and Chief Executive Officer.

As we begin today's call, 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. All statements other than statements of historical fact could be deemed forward-looking statements, including statements containing the words; plan, expects, potential, believe, goal, estimate, anticipate and similar words.

These statements are based on the current estimates and assumptions of our management as of the date of this call and are subject to risks, uncertainties, changes and circumstances and other factors that may cause actual results to differ materially from the information expressed or implied by such forward-looking statements.

Examples of such statements include statements about the potential timing of FDA clearance of our Magellan Robotic System in the U.S., the timing of future clinical cases to be performed with the System, the potential benefits of the System on vascular procedures, and the timing of commercialization our Magellan System; as well as statements about the anticipated increase in adoption of our Sensei platform for electrophysiology procedures.

Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, among others: engineering, regulatory and sales challenges in developing new products and entering new markets; potential safety and regulatory issues that could slow or suspend our sales; the uncertain timelines, costs and results of pre-clinical and clinical trials; 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 maintain our remedial actions over previously reported material weaknesses in internal controls over financial reporting; the effect of credit, financial and economic conditions on capital spending by our potential customers; our ability to manage expenses and obtain additional financing; and other risks more fully described in the Risk Factors section of our Quarterly Report on Form 10-K filed for the quarter ended December 31st with the FCC on March 15th, 2012, 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 included in our remarks and responses to questions. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future even if new information becomes available.

Bruce J. Barclay

Thank you, Pete. Good afternoon, everyone. Thank you all for joining us today for our first quarter 2012 conference call. In today's call I will provide an update on our strategic initiatives, discuss our achievements in the first quarter, and review our plans going forward. I'll then turn the call over to Pete who'll provide a review of our financial results. Finally, we'll open up the call to your questions.

As you've seen from today's press release, there is a growing level of interest and excitement for our Magellan Robotic System, as a result of positive growing and clinical experience in Europe and the progress we're making in the U.S. with our pending 5-PenK application.

In the first quarter revenues were $4.7 million which is down 12% from a year ago period. We shipped three systems, all in the U.S., two Sensei systems and one vascular research system and recognized revenue on four systems in total. As is the case for many companies doing business in Europe, the economic environment in that region has been challenging. Not surprisingly this is resulting in hospitals taking a more careful view of their capital investments.

We are experiencing longer sales cycles as hospitals consider the clinical and economic benefits for all capital outlays. Further, capital sales cycles have always been about 6 to 18 months even in the best of times. In spite of this we continue to see strong clinical interest in our Magellan system, and we are engaged with several hospitals to develop deal structures that address their economic needs and allow them to complete their internal approval process.

We continue to anticipate the completion of multiple deals over the coming quarters. Pete will provide more color on the first quarter financial results in a few minutes.

I'll start with a review of our vascular business. As we discussed in the past, flexible robotics in vascular applications is a key growth driver for the business. And we believe it will revolutionize the way endovascular procedures are performed. Our initial focus, the peripheral vasculature, presents a significant market opportunity one that we believe is anywhere from five to seven times larger than for electrophysiology. Peripheral vascular disease affects an estimated 27 million patients worldwide according to published industry studies.

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