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November 15, 2006

Hansen Medical - Name the Revenues of This Company

posted by MR WAVETHEORY at 11/15/2006 06:53:00 PM


Take a moment to review this income statement from Hansen Medical Inc. (Nasdaq HNSN). Tell me what are the revenues of this company.



Nine Months Ended

Period from


Years Ended December 31,

September 30,

September 23, 2002








(date of inception) to


2003

2004

2005

2005

2006

September 30, 2006



























(Unaudited)




(In thousands, except per share data)
Statements of Operations Data:
























Operating expenses:

























Research and development

$ 2,369

$ 5,199

$ 17,282

$ 14,319

$ 12,120

$ 37,305

Selling, general and administrative


1,615


2,095


4,382


2,885


6,445


14,769



















Total operating expenses


3,984


7,294


21,664


17,204


18,565


52,074



















Loss from operations


(3,984 )

(7,294 )

(21,664 )

(17,204 )

(18,565 )

(52,074 )
Interest income


32


205


427


189


989


1,654
Other expense








(36 )

(2 )

(222 )

(258 )
Interest expense








(130 )

(9 )

(498 )

(628 )



















Net loss

$ (3,952 )
$ (7,089 )
$ (21,403 )
$ (17,026 )
$ (18,296 )
$ (51,306 )



















Net loss per common share:

























Basic and diluted(1)

$ (8.13 )
$ (9.15 )
$ (19.14 )
$ (15.75 )
$ (12.12 )






















Weighted average number of shares used in per share calculations:

























Basic and diluted(1)


486


775


1,118


1,081


1,510























Pro forma net loss per common share (unaudited):

























Basic and diluted(1)









$ (2.44 )




$ (1.30 )






















Weighted-average number of shares used in pro forma per share calculations (unaudited):

























Basic and diluted(1)










8,754






13,865

(Hansen Medical S-1)
The first time I read it, I thought it was $12 million. Wrong. My mind played a nasty trick on me when I read this income statement the first time! You see, I had expected the top line to be the top line, so I had gone right ahead to read the right hand columns of the income statement, ignoring the caption on the left hand side. After all, the top line of the income statement is always revenues. Right? Not. In fact, there is no top line. This income statement starts with the operating expenses! I didn't catch this until I read in the MD&A, "To date, we have not generated any revenue. We do not expect to generate revenue until at least the first quarter of 2007 and only if we receive a CE mark for European clearance of our Artisan control catheters. Any revenue from initial sales of a new product is difficult to predict and in any event will only modestly reduce our continued and increasing losses resulting from our research and development and other activities."

In case you're wondering what Hansen Medical actually does, they are development stage company developing a robotic catheter system called Sensei.

The extensive know-how of surgeons is often limited by their primary tool – namely, their hands. Similarly, robots are capable of a precision and dexterity that is significantly beyond that of the human hand. Robots, however, cannot carry out surgery – they need to be controlled by surgeons.

By controlling the surgical tools (mounted on a robot) via an OMEGA Haptic Device, surgeons get the best of both worlds. They are fully in control of the surgical procedures, but they benefit from the precision and scaling ability of the robotic tools. As an added benefit, the computer controlling the robot can add haptic guidance information to prevent unwanted tool behavior, or to locally enhance the tool precision.

The Sensei™ Robotic Catheter System uses computed catheter technology to provide stable and predictable control of catheter movement. This innovative technology is designed to provide fine guide catheter control in three dimensions, to enhance the physician's ability to access hard to reach anatomy, repeat procedure steps, and maintain stability during interventional procedures.


The deal priced at $12 which is at the midpoint of the $11-$13 range. Hansen is raising $75 million by selling 6.25 million shares in the company to the public, a 30% stake in the company.

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