Monday, April 11, 2011

Hansen Medical Readies Robotic Vascular Catheters

Recently I was asked for an update on Hansen Medical (HNSN), which I last wrote about on February 9, in Hansen Medical: Upgrade Due. Since then the stock rose from $2.07 to a high of $3.00, then retreated a bit to end at $2.76 today. During this period there was no substantial news, just investors digesting the $30 million royalty payment from Philips and the possible commercialization of Hansen's vascular catheter system.

Today some investors sold on the news that Hansen submitted a 510(k) application to the FDA for the vacular robotic system, which is a pre-market notification [See Hansen Medical Submits Vascular 501(k)]. The 501(k) is a good thing, it has to be done, but the real news will be when (or if) the new system gets FDA approval. In Europe it will need EMA approval. The submission of the application was expected; it does not change any equation.

In theory the flexible robotic catheter system (Sensei) developed by Hansen should have many medical applications, but since each one needs regulatory agency approval, and R&D for modifications to the system, it can seem like slow going. The only approved U.S. application for Sensei is with an electrophysiology mapping Artisan catheter. These systems have received some praise, but have not been on the front burner for hospitals with restricted capital equipment budgets. Sales actually slowed in 2009 and 2010.

The natural growth in this area should also be accelerated by the approval of the Lynx Robotic Ablation catheter in Europe last December. Ablation is the purposeful destruction of selected nerves in the heart, used to correct erratic heartbeats. This should make the system more attractive than when it only is capable of doing measurements.

With Sensei system sales at just 2 or 3 per quarter lately, the only thing I see that could cause a serious upward stock movement before the approval of the vascular surgery system is an uptick in system sales for the current electrophysiology/ablation robots.

Those with patience will see a good long term opportunity here. The electrophysiology system is getting increased usage where they are already installed. The vascular system has been demonstrated to work well, with 20 procedures performed under clinical test conditions. Once approved, surgeon will still need to be trained to use it. The hope would be that some time in 2012 a critical mass of doctors skilled in the use of robotic catheter systems will emerge. Then hospitals will find it easier to approve system purchases. Selling more robots per quarter should allow Hansen Medical to generate better margins and cash. Then other applications can be developed. If that happens (and things could go wrong, or be delayed) then Hansen could start rewarding investors the way Intuitive Surgical did during its ramping period.

I own Hansen Medical stock. Keep the risks as well as the opportunities in mind ... and keep diversified!


  1. You appear to know a lot about Hansen Medical and I am just starting to research the company. I have a couple of big-picture questions:

    1) Why did Hansen enter the EP market first, and not the vascular market, since, according to Barclay, the vascular opportunity is "more than 10 times the size of [Hansen's] current addressable market"?

    2) Hansen's February agreement with Philips resulted in Hansen receiving $29 million from Philips in consideration for the FOSSL technology, AND an amendment to their previous JDA to allow for Philips to potentially extend and increase certain fees to be paid by Hansen on future sales (if any) of the vascular robot. Do you have any idea how much Hansen had to give up in future payments to get this $29 million? It would appear to me that at least part of the $29 million is effectively a loan from Philips to Hansen.


  2. I read that catheters are measured in Fr’s and one Fr is approximately the size of a human hair. The standard catheter is 18 Fr, so that would mean it’s about the size of 18 hairs in a bundle? That doesn’t seem like much, but I believe that was only for urethra catheters, are they different sizes for a vascular catheter? I would imagine they are slightly larger, but would not be as painful, but I really do not know, I am just trying to get a little more info. Thanks in advance.