Track topics on Twitter Track topics that are important to you
TransEnterix, Inc. (NYSE MKT:TRXC), a medical device company that is pioneering the use of robotics to improve minimally invasive surgery, today announced its operating and financial results for the second quarter of 2017.
“We are very pleased with the progress we made during the quarter on our key strategic priorities, including the steps taken towards achieving 510(k) clearance for the Senhance by the end of 2017,” said Todd M. Pope, President and Chief Executive Officer of TransEnterix. “We are also encouraged by the continued momentum in clinical utilization in Europe, and now globally with our sale in Japan. In addition, we have been able to leverage the open architecture of the Senhance to incorporate cutting edge technologies into the platform, setting a new standard for minimally invasive robotic surgery.”
Commercial and Clinical Update
In the second quarter, the Company sold a Senhance Robotic Surgery System to the Saitama Medical University International Medical Center located in the Saitama Prefecture in the Greater Tokyo region. The Senhance System was purchased in Japan under a physician import license, which allows cutting-edge medical devices to be directly purchased by Japanese physicians. Japan is the second largest market for medical devices as well as robotic assisted surgery devices. The Senhance does not have broader market approval for sale in Japan.
As of June 30, 2017, the Company had eight Senhance systems installed in France, Germany, Italy, the United Kingdom, and Japan. Within these eight hospitals, 21 surgeons performed surgery in the second quarter across gynecology, colorectal, general surgery, urology, and thoracic specialties.
In July, the Senhance platform was used in the first-ever robotic micro-laparoscopic surgeries utilizing 3mm instruments. Cases were performed at multiple clinical sites and included ovarian cystectomies, endometrial excisions, total laparoscopic hysterectomies, bilateral salpingo-oophorectomies and cholecystectomies. The Company expects to fully launch its 3mm instruments in the fourth quarter in CE Mark countries.
In July, the NovadaqⓇ PinPointⓇ Endoscopic Fluorescence Imaging System was used in conjunction with the Senhance platform in multiple general surgical and gynecologic procedures. The open architecture of the Senhance platform allowed us to rapidly integrate this system so that surgeons can benefit from utilizing this leading fluorescence imaging technology.
For the three months ended June 30, 2017, the Company reported revenue of $1.6 million, primarily related to the sale of one Senhance during the quarter.
For the three months ended June 30, 2017, total operating expenses were $15.4 million, as compared to $80.7 million in the three months ended June 30, 2016. The prior year quarter included approximately $67.4 million of non-recurring impairment charges.
For the three months ended June 30, 2017, net loss was $14.7 million, or $0.11 per share, as compared to $80.1 million, or $0.70 per share, in the three months ended June 30, 2016.
The Company had cash, cash equivalents and restricted cash of approximately $36.2 million as of June 30, 2017. In the second quarter, the Company completed an equity offering with approximately $23.2 million in net proceeds, and refinanced its debt. With these funding actions, the Company expects to fund its operations into the first quarter of 2018. The equity offering also included Series A warrants that will expire ten days after the announcement of an FDA clearance of the Senhance. Assuming that these warrants are exercised, the Company will receive another $25.0 million, which the Company expects will fund its operations into late 2018.
TransEnterix, Inc. will host a conference call on Wednesday, August 2, 2017 at 4:30 PM ET to discuss its second quarter 2017 operating and financial results. To listen to the conference call on your telephone, please dial (888) 852-6561 for domestic callers or (719) 325-2281 for international callers and reference TransEnterix Call approximately ten minutes prior to the start time. To access the live audio webcast or archived recording, use the following link http://ir.transenterix.com/events.cfm. The replay will be available on the Company's website.
TransEnterix is a medical device company that is pioneering the use of robotics to improve minimally invasive surgery by addressing the clinical and economic challenges associated with current laparoscopic and robotic options. The Company is focused on the commercialization of the Senhance™ Surgical Robotic System, a multi-port robotic system that brings the advantages of robotic surgery to patients while enabling surgeons with innovative technology such as haptic feedback and eye sensing camera control. The Company also developed the SurgiBot™ System, a single-port, robotically enhanced laparoscopic surgical platform. The Senhance Surgical Robotic System has been granted a CE Mark but is not currently available for sale in the United States. For more information, visit the TransEnterix website at www.transenterix.com.
This press release includes statements relating to our second quarter 2017 results, the Senhance™ Surgical Robotic System and our current regulatory and commercialization plans for this product. These statements and other statements regarding our future plans and goals constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations, including: whether the FDA will provide regulatory clearance of our Senhance 510(k) submission by the end of 2017; whether our commercialization plans and the development of our pipeline will be successful; whether TransEnterix will fully launch its 3mm instruments in the 2017 fourth quarter in CE Mark countries; whether existing cash and cash equivalents will fund operations into the first quarter of 2018; and whether the Company is able to fund its operations into late 2018 resulting from the exercise of its Series A Common Stock Warrants. For a discussion of the risks and uncertainties associated with TransEnterix's business, please review our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2016, which was filed on March 6, 2017, and our other filings we make with the SEC. You are cautioned not to place undue reliance on these forward looking statements, which are based on our expectations as of the date of this press release and speak only as of the origination date of this press release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands except per share amounts)
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Cost of revenue||972||—||2,306||—|
|Research and development||5,070||6,364||11,925||14,749|
|Sales and marketing||3,749||1,306||7,472||2,989|
|General and administrative||2,719||2,895||5,768||5,134|
|Amortization of intangible assets||1,687||1,786||3,323||3,603|
|Change in fair value of contingent consideration||(774||)||944||453||1,800|
|Change in fair value of warrant liabilities||2,326||—||2,326||—|
|Issuance costs for warrants||627||—||627||—|
|Inventory write-down related to restructuring||—||2,565||—||2,565|
|Restructuring and other charges||—||3,085||—||3,085|
|Total Operating Expenses||15,404||80,729||31,894||95,709|
|Interest expense, net||(622||)||(489||)||(956||)||(1,067||)|
|Other (expense) income||(40||)||95||(100||)||95|
|Total Other Expense, net||(662||)||(394||)||(1,056||)||(972||)|
|Loss before income taxes||$||(15,454||)||$||(81,123||)||$||(31,726||)||$||(96,681||)|
|Income tax benefit||741||992||1,599||3,637|
|Other comprehensive income (loss)|
|Foreign currency translation gain (loss)||5,430||(2,286||)||6,563||1,510|
|Net loss per share - basic and diluted||$||
|Weighted average common shares outstanding - basic and diluted||132,386||114,319||127,052||109,290|
Consolidated Balance Sheets
(in thousands, except share amounts)
|June 30,||December 31,|
|Cash and cash equivalents||$||29,741||$||24,165|
|Accounts receivable, net||1,665||621|
|Other current assets||7,231||5,335|
|Total Current Assets||48,114||38,016|
|Accounts receivable, net of current portion||—||266|
|Property and equipment, net||6,404||5,772|
|Intellectual property, net||37,170||37,090|
|In-process research and development||17,276||15,920|
|Other long term assets||146||63|
|Liabilities and Stockholders’ Equity|
|Contingent consideration – current portion||6,918||10,502|
|Notes payable - current portion, net of debt discount||—||7,997|
|Total Current Liabilities||17,358||30,689|
|Long Term Liabilities|
|Contingent consideration – less current portion||11,108||12,298|
|Notes payable - less current portion, net of debt discount||12,896||4,995|
|Net deferred tax liabilities||9,614||10,397|
|Commitments and Contingencies|
|Common stock $0.001 par value, 750,000,000 shares authorized at June 30, 2017, and December 31, 2016; 148,538,492 and 115,781,030 shares issued at June 30, 2017 and December 31, 2016, respectively; and 148,536,356 and 115,687,351 shares outstanding at June 30, 2017 and December 31, 2016, respectively||148||115|
|Additional paid-in capital||455,853||426,609|
Treasury stock at cost, 2,136 and 93,679 shares at June 30, 2017 and
December 31, 2016, respectively
|Accumulated other comprehensive income (loss)||794||(5,769||)|
|Total Stockholders’ Equity||123,822||117,870|
|Total Liabilities and Stockholders’ Equity||$||185,839||$||176,249|
Consolidated Statements of Cash Flows
|Six Months Ended|
|Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:|
|Amortization of intangible assets||3,323||3,603|
|Amortization of debt discount and debt issuance costs||43||99|
|Inventory write-down related to restructuring||—||2,565|
|Non-cash restructuring and other charges||—||2,551|
|Deferred tax benefit||(1,580||)||(3,657||)|
|Loss on extinguishment of debt||308||—|
|Change in fair value of warrant liabilities||2,326||—|
|Change in fair value of contingent consideration||453||1,800|
|Changes in operating assets and liabilities:|
|Other current and long term assets||(1,473||)||(213||)|
|Net cash and cash equivalents used in operating activities||(25,515||)||(27,536||)|
|Purchase of property and equipment||(1,397||)||(517||)|
|Purchase of intellectual property||(398||)||—|
|Net cash and cash equivalents used in investing activities||(1,795||)||(517||)|
|Payment of debt||(13,343||)||(3,078||)|
|Proceeds from issuance of debt and warrants||13,196||—|
|Proceeds from issuance of common stock and warrants, net of issuance costs||29,193||57,637|
|Taxes paid related to net share settlement of vesting of restricted stock units||(168||)||(130||)|
|Proceeds from exercise of stock options and warrants||—||165|
|Net cash and cash equivalents provided by financing activities||28,878||54,594|
|Effect of exchange rate changes on cash and cash equivalents||2||(92||)|
|Net increase in cash, cash equivalents and restricted cash||1,570||26,449|
|Cash, cash equivalents and restricted cash, beginning of period||34,590||38,449|
|Cash, cash equivalents and restricted cash, end of period||$||36,160||$||64,898|
|Supplemental Disclosure for Cash Flow Information|
|Supplemental Schedule of Noncash Investing Activities|
|Transfer of inventory to property and equipment||—||$||1,823|
|Issuance of common stock as contingent consideration||$||5,227||—|
|Relative fair value of warrants issued with debt||$||300||—|
For TransEnterix, Inc.
Mark Klausner, +1-443-213-0501
(For EU) Conrad Harrington, +44 (0)20 3178 8914
(For US) Hannah Dunning, +1-415-618-8750
The role of medical devices in healthcare is essential. The diversity and innovativeness of this sector contribute significantly to enhance the quality and efficacy of healthcare. Covering a wide range of products, from simple bandages to the...