Monday, May 9, 2011

Hansen Medical Ships Just 2 Sensei Systems in Q1

Hansen Medical, maker of robotic controlled catheters for surgery, showed one-time GAAP net income for its first quarter of 2011, reporting results to the analyst conference call on May 4th.

A $23 million sale of intellectual property to Philips medical division was the cause of the profit. Hansen (HNSN) is still essentially in start up mode, losing money each quarter while further developing its Sensei systems for catheter based surgery.

In the quarter Hansen shipped only two new Sensei systems, but it recognized revenue on five systems. Hansen only recognizes revenues on a system when it has been installed, surgeons have been trained, and the system is in actual use. At the end of the quarter there wree 13 systems that had been shipped but not booked for revenue.

Two systems is a slow pace, but shipments have been slow lately. Since each procedure requires a new catheter, it is notable that 693 catheters were shipped in the quarter, up 4% from Q4 and 9% from year-earlier. Most catheters are used for electrophysiology (EP) measurements, until recently the only use approved by the FDA and EMA. However, sale of Lynx catheters for ablation (purposeful destruction of neurons to correct irregular heartbeats) have begun in Europe. I would expect more Sensei systems to sell this year than in 2010 now that ablation can be performed as well as EP.

Management mentioned that one system had already been shipped to a U.S. destination in Q2, and the U.S. sales force has been restructured.

The Philips payment left Hansen with $45 million in cash at the end of the quarter. With the new vascular surgery robots likely (but not certain) to be approved by the FDA and EMA this year, this is plenty of cash to keep the company running until unit sales ramp up, which should lower costs on a per robot basis and allow for sustained profitability.

See my Hansen Medical Q1 2011 analyst conference call summary for a greater level of detail.

I own Hansen Medical stock.

Keep diversified.

See also: Hansen Medical home page

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