Hansen Medical to receive
up to $93M in equity financing

Hansen Medical, a medical robotics company focused on catheter-related technologies, reported today that it has entered into a securities purchase agreement for up to $93 million subject to closing conditions. The agreement is with Oracle Investment Management, medical device executive Jack W. Schuler, members of the company’s board of directors and other existing and new shareholders. Following the close of the transaction, Schuler will be granted a seat on the company’s board of directors.

The initial sale of common stock will generate $35 million with an additional $4 million from the sale two-year warrants. If the warrants are exercised, it could produce up to an additional $54 million for a total of $93 million before expenses. The company says proceeds will be used to support efforts to commercialize its Magellan Robotic System, drive further adoption of the Sensei Robotic System and strengthen overall operations. In the wake of the news, the company’s stock price was up close to 20 percent in early trading.

When the company shared preliminary second quarter results last week, it reported its eighth consecutive quarter of procedure growth but also said that revenues of $3.1 million to $3.4 million represent a decline of 4 percent to 12 percent year-over-year. The company also said it expected a net loss of $13.2 million to $13.7 million for the quarter. However, it noted that it will have commercialized three systems during the quarter, bringing its total for the year to four. Final results will be released Aug. 7.

Under the terms of the agreement, investors agree not to buy — except through exercise of the warrants — or sell any shares of common stock for a one year period following the closing date.

For a more detailed breakdown of the transaction from Hansen Medical, see below:

The agreement is structured to provide up to $93 million before expenses. Hansen Medical would receive $35 million upon the closing of the purchase of shares of common stock at a per share price of $1.23. Investors would also purchase warrants to purchase approximately 34 million shares of common stock. All warrants will have a two-year term and will not be transferable. The purchase price for the warrants will be $0.125 for each warrant, totaling an additional $4 million of proceeds. Total gross proceeds to the Company from the initial sale of common stock and warrants will be approximately $39 million.

The warrants will be allocated into three equal tranches of approximately 11.4 million, and, if exercised, could yield the Company additional proceeds of up to $54 million. The Series A Warrants will have an exercise price of $1.23 per share and will be subject to mandatory exercise subsequent to Hansen Medical’s receipt of regulatory approval for the new 6F Magellan catheter in the U.S. The additional proceeds provided to the Company under this Series A Warrant would be approximately $14 million.

The Series B and Series C Warrants will have an exercise price of $1.50 per share, and $2.00 per share, respectively, but will not be subject to mandatory exercise. These warrants, if fully exercised, would provide additional proceeds to the Company of $17 million and $23 million, respectively.

[ photo courtesy of Hansen Medical ]