Press Release
Asensus Surgical, Inc. Reports Operating and Financial Results for the Second Quarter 2022
Recent Highlights
- Over 670 procedures were performed globally during the quarter, representing growth of 34% over the prior year quarter, including 77% growth in the EMEA region
- Continued the development of Performance-Guided Surgery capabilities which will enable surgeons to deliver better patient outcomes
- The Company had cash, cash equivalents, short-term and long-term investments, excluding restricted cash, of approximately
$103.8 million atJune 30, 2022
“We delivered yet another strong quarter of global Senhance® System utilization growth and made great progress towards the ongoing development of our digital surgery platform with the Intelligent Surgical Unit™ (ISU™) as we seek to make Performance-Guided Surgery (PGS) a reality,” said
Digital Surgery Portfolio Expansion
Expanded Global ISU Machine Vision Capabilities
The Company continues to expand the utilization and applicability of the ISU globally. The Company is seeking CE Mark approval for expanded machine vision capabilities in
Through the evolution of the ISU, the Senhance System provides surgeons with real-time intraoperative digital tools, which represent the initial components of Performance-Guided Surgery. These tools can ultimately allow surgeons to perform better, more predictable surgery regardless of their skill level or experience.
Articulating Instrument Launch
The Company continues to expect a full scale commercial launch of 5mm Articulating Instruments in the second half of the year, which is currently in a pilot launch in the
The Company continues to expect to submit its 510(k) application for pediatric clearance in the
Market Development
Procedure Volumes
In the second quarter, surgeons performed over 670 procedures utilizing the Senhance System, representing a 34% increase over the second quarter of 2021, and a 3% increase sequentially over the first quarter of 2022. This growth was primarily driven by a 77% increase in procedures in the EMEA region.
When a procedure is performed with a Senhance System, the Company is able to collect robust data, including surgical video. Over time, the accumulation of this digital surgical data library will enable the Company to generate powerful clinical insights that will fuel the development of Performance-Guided Surgery capabilities to help surgeons reduce surgical variability and drive consistently superior surgical outcomes.
Clinical Registry (TRUST)
The Company is leveraging its growing body of real-world clinical data through the utilization of its TRUST™ clinical registry. The Company believes TRUST is the largest multi-specialty robotic-assisted laparoscopic registry in the industry. The Company expects to continue to grow this body of clinical data to support its commercial strategy as well as help to facilitate an increasing number of high-quality clinical publications demonstrating the value of Senhance and Performance-Guided Surgery.
Clinical Validation
During the quarter, there were six peer-reviewed clinical papers published providing further support for the clinical utility of the Senhance System across a variety of surgical specialties.
These papers can be found at the Company’s website, www.senhance.com/us/resources.
New Program Initiations
During the second quarter, the Company announced one Senhance installation, in the EMEA region, at the University Hospital Tübingen in
In addition, the Company has received two additional system orders which have not yet been installed. This includes the system announced on
For the full year 2022, the Company now expects to initiate 8 - 10 new Senhance Surgical Systems.
Second Quarter Financial Results
For the three months ended
For the three months ended
For the three months ended
Adjusted net loss is a non-GAAP financial measure. See the reconciliation of GAAP to Non-GAAP Measures below. For the three months ended
Balance Sheet Updates
The Company had cash, cash equivalents, short-term and long-term investments, excluding restricted cash of approximately
Conference Call
About
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Forward-Looking Statements
This press release includes statements relating to the Senhance System and our 2022 second quarter results. 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 and include whether we will be able to continue to progress our strategic plan in 2022, including whether we can make Performance-Guided Surgery a reality; whether the Senhance System and Performance Guided Surgery will revolutionize surgery and help to improve patient outcomes; whether we will be able to expand the utilization and applicability of the ISU globally and whether we will receive CE Mark approval for expanded machine vision capabilities in
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share amounts)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product | $ | 254 | $ | 363 | $ | 601 | $ | 1,726 | ||||||||
| Service | 424 | 406 | 732 | 785 | ||||||||||||
| Lease | 316 | 333 | 727 | 674 | ||||||||||||
| Total revenue | 994 | 1,102 | 2,060 | 3,185 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Product | 883 | 1,003 | 1,259 | 2,678 | ||||||||||||
| Service | 646 | 636 | 1,141 | 1,002 | ||||||||||||
| Lease | 818 | 708 | 1,770 | 1,779 | ||||||||||||
| Total cost of revenue | 2,347 | 2,347 | 4,170 | 5,459 | ||||||||||||
| Gross loss | (1,353 | ) | (1,245 | ) | (2,110 | ) | (2,274 | ) | ||||||||
| Operating Expenses: | ||||||||||||||||
| Research and development | 7,253 | 4,089 | 13,681 | 8,304 | ||||||||||||
| Sales and marketing | 3,602 | 3,562 | 7,321 | 6,615 | ||||||||||||
| General and administrative | 4,992 | 3,848 | 10,525 | 7,840 | ||||||||||||
| Amortization of intangible assets | 2,533 | 2,862 | 5,203 | 5,729 | ||||||||||||
| Change in fair value of contingent consideration | (598 | ) | 478 | (752 | ) | 735 | ||||||||||
| Property and equipment impairment | 432 | — | 432 | — | ||||||||||||
| Total Operating Expenses | 18,214 | 14,839 | 36,410 | 29,223 | ||||||||||||
| Operating Loss | (19,567 | ) | (16,084 | ) | (38,520 | ) | (31,497 | ) | ||||||||
| Other Income (Expense): | ||||||||||||||||
| Gain on extinguishment of debt | — | 2,847 | — | 2,847 | ||||||||||||
| Change in fair value of warrant liabilities | — | — | — | (1,981 | ) | |||||||||||
| Interest income | 260 | 79 | 515 | 131 | ||||||||||||
| Interest expense | (141 | ) | (5 | ) | (341 | ) | (12 | ) | ||||||||
| Other expense, net | (86 | ) | (7 | ) | (232 | ) | (36 | ) | ||||||||
| Total Other Income (Expense), net | 33 | 2,914 | (58 | ) | 949 | |||||||||||
| Loss before income taxes | (19,534 | ) | (13,170 | ) | (38,578 | ) | (30,548 | ) | ||||||||
| Income tax (expense) benefit | (85 | ) | (2 | ) | (169 | ) | 36 | |||||||||
| Net loss | (19,619 | ) | (13,172 | ) | (38,747 | ) | (30,512 | ) | ||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | (19,619 | ) | (13,172 | ) | (38,747 | ) | (30,512 | ) | ||||||||
| Foreign currency translation (loss) gain | (1,713 | ) | 472 | (2,363 | ) | (1,466 | ) | |||||||||
| Unrealized loss on available-for-sale investments | (144 | ) | — | (696 | ) | — | ||||||||||
| Comprehensive loss | $ | (21,476 | ) | $ | (12,700 | ) | $ | (41,806 | ) | $ | (31,978 | ) | ||||
| Net loss per common share attributable to common stockholders – basic and diluted | $ | (0.08 | ) | $ | (0.06 | ) | $ | (0.16 | ) | $ | (0.14 | ) | ||||
| Weighted average number of shares used in computing net loss per common share – basic and diluted | 236,505 | 233,250 | 236,201 | 219,199 | ||||||||||||
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
(Unaudited)
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 10,844 | $ | 18,129 | ||||
| Short-term investments, available-for-sale | 83,360 | 80,262 | ||||||
| Accounts receivable, net | 699 | 749 | ||||||
| Inventories | 8,451 | 8,634 | ||||||
| Prepaid expenses | 2,927 | 3,255 | ||||||
| Employee retention tax credit receivable | 1,147 | 1,311 | ||||||
| Other current assets | 1,134 | 957 | ||||||
| Total Current Assets | 108,562 | 113,297 | ||||||
| Restricted cash | 1,290 | 1,154 | ||||||
| Long-term investments, available-for-sale | 9,581 | 37,435 | ||||||
| Inventories, net of current portion | 7,258 | 7,074 | ||||||
| Property and equipment, net | 9,389 | 10,971 | ||||||
| Intellectual property, net | 4,122 | 9,892 | ||||||
| Net deferred tax assets | 244 | 288 | ||||||
| Operating lease right-of-use assets, net | 4,747 | 5,348 | ||||||
| Other long-term assets | 2,157 | 1,014 | ||||||
| Total Assets | $ | 147,350 | $ | 186,473 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 3,849 | $ | 3,448 | ||||
| Accrued employee compensation and benefits | 3,127 | 3,559 | ||||||
| Accrued expenses and other current liabilities | 1,617 | 1,617 | ||||||
| Operating lease liabilities – current portion | 579 | 683 | ||||||
| Deferred revenue | 510 | 543 | ||||||
| Total Current Liabilities | 9,682 | 9,850 | ||||||
| Long Term Liabilities: | ||||||||
| Contingent consideration | 1,619 | 2,371 | ||||||
| Noncurrent operating lease liabilities | 4,610 | 5,006 | ||||||
| Total Liabilities | 15,911 | 17,227 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock |
237 | 235 | ||||||
| Preferred stock, |
— | — | ||||||
| Additional paid-in capital | 958,646 | 954,649 | ||||||
| Accumulated deficit | (824,121 | ) | (785,374 | ) | ||||
| Accumulated other comprehensive loss | (3,323 | ) | (264 | ) | ||||
| Total Stockholders’ Equity | 131,439 | 169,246 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 147,350 | $ | 186,473 | ||||
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| Six Months Ended | ||||||||
| 2022 | 2021 | |||||||
| Operating Activities: | ||||||||
| Net loss | $ | (38,747 | ) | $ | (30,512 | ) | ||
| Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | ||||||||
| Depreciation | 1,720 | 1,585 | ||||||
| Amortization of intangible assets | 5,203 | 5,729 | ||||||
| Amortization of discounts and premiums on investments, net | 444 | — | ||||||
| Stock-based compensation | 4,328 | 3,628 | ||||||
| Gain on extinguishment of debt | — | (2,847 | ) | |||||
| Deferred tax expense (benefit) | 169 | (36 | ) | |||||
| Bad debt expense | 9 | — | ||||||
| Change in inventory reserves | (567 | ) | 288 | |||||
| Property and equipment impairment | 432 | — | ||||||
| Loss on disposal of property and equipment | 97 | — | ||||||
| Change in fair value of warrant liabilities | — | 1,981 | ||||||
| Change in fair value of contingent consideration | (752 | ) | 735 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (8 | ) | 127 | |||||
| Inventories | (1,933 | ) | (1,687 | ) | ||||
| Operating lease right-of-use assets | 409 | (2,970 | ) | |||||
| Prepaid expenses | 189 | 517 | ||||||
| Other current and long-term assets | (1,169 | ) | 2,660 | |||||
| Accounts payable | 524 | 679 | ||||||
| Accrued expenses | (284 | ) | (1,428 | ) | ||||
| Deferred revenue | (4 | ) | 14 | |||||
| Operating lease liabilities | (290 | ) | 3,052 | |||||
| Net cash and cash equivalents used in operating activities | (30,230 | ) | (18,485 | ) | ||||
| Investing Activities: | ||||||||
| Purchase of available-for-sale investments | (17,792 | ) | — | |||||
| Proceeds from maturities of available-for-sale investments | 41,408 | — | ||||||
| Purchase of property and equipment | (443 | ) | (700 | ) | ||||
| Net cash and cash equivalents provided by (used in) investing activities | 23,173 | (700 | ) | |||||
| Financing Activities: | ||||||||
| Proceeds from issuance of common stock, net of issuance costs | — | 130,314 | ||||||
| Taxes paid related to net share settlement of vesting of restricted stock units | (349 | ) | (1,041 | ) | ||||
| Proceeds from exercise of stock options and warrants | 18 | 30,835 | ||||||
| Net cash and cash equivalents (used in) provided by financing activities | (331 | ) | 160,108 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 239 | (329 | ) | |||||
| Net (decrease) in cash, cash equivalents and restricted cash | (7,149 | ) | 140,594 | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 19,283 | 17,529 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 12,134 | $ | 158,123 | ||||
| Supplemental Disclosure for Cash Flow Information: | ||||||||
| Cash paid for leases | $ | 549 | $ | 539 | ||||
| Cash paid for taxes | $ | 65 | $ | 50 | ||||
| Supplemental Schedule of Non-cash Investing and Financing Activities: | ||||||||
| Transfer of inventories to property and equipment | $ | 724 | $ | 1,243 | ||||
| Acquisition of property and equipment in accounts payable | $ | — | $ | 67 | ||||
| Reclass of warrant liability to common stock and additional paid-in-capital | $ | — | $ | 2,236 | ||||
| Lease liabilities arising from obtaining right-of-use assets | $ | — | $ | 3,461 | ||||
Reconciliation of Non-GAAP Measures
Adjusted Net Loss and Adjusted Net Loss per Share
(in thousands except per share amounts)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
| Net loss attributable to common stockholders (GAAP) | $ | (19,619 | ) | $ | (13,172 | ) | $ | (38,747 | ) | $ | (30,512 | ) | ||||||||||||
| Adjustments | ||||||||||||||||||||||||
| Amortization of intangible assets | 2,533 | 2,862 | 5,203 | 5,729 | ||||||||||||||||||||
| Change in fair value of contingent consideration | (598 | ) | 478 | (752 | ) | 735 | ||||||||||||||||||
| Property and equipment impairment | 432 | — | 432 | — | ||||||||||||||||||||
| Gain on extinguishment of debt | — | (2,847 | ) | — | (2,847 | ) | ||||||||||||||||||
| Change in fair value of warrant liabilities | — | — | — | 1,981 | ||||||||||||||||||||
| Adjusted net loss attributable to common stockholders (Non-GAAP) | $ | (17,252 | ) | $ | (12,679 | ) | $ | (33,864 | ) | $ | (24,914 | ) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
| Net loss per share attributable to common stockholders (GAAP) | $ | (0.08 | ) | $ | (0.06 | ) | $ | (0.16 | ) | $ | (0.14 | ) | ||||||||||||
| Adjustments | ||||||||||||||||||||||||
| Amortization of intangible assets | 0.01 | 0.02 | 0.02 | 0.03 | ||||||||||||||||||||
| Change in fair value of contingent consideration | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||
| Property and equipment impairment | 0.00 | — | 0.00 | — | ||||||||||||||||||||
| Gain on extinguishment of debt | — | (0.01 | ) | — | (0.01 | ) | ||||||||||||||||||
| Change in fair value of warrant liabilities | — | — | — | 0.01 | ||||||||||||||||||||
| Adjusted net loss per share attributable to common stockholders (Non-GAAP) | $ | (0.07 | ) | $ | (0.05 | ) | $ | (0.14 | ) | $ | (0.11 | ) | ||||||||||||
The non-GAAP financial measures for the three and six months ended
a) Intangible assets that are amortized consist of developed technology and purchased patent rights recorded at cost and amortized over 5 to 10 years.
b) Contingent consideration in connection with the acquisition of the Senhance System in 2015 is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a Monte-Carlo simulation utilizing significant unobservable inputs including the probability of achieving each of the potential milestones, revenue volatility, EURO to USD exchange rate, and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
c) Property and equipment impairment associated with returned Senhance Systems under operating leases that are not expected to generate future cash flows sufficient to recover their net book value.
d) During the second quarter of 2021, the Company received notification from the
e) The Company’s Series B Warrants are measured at fair value using a simulation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant. The warrant liability is revalued at each reporting period or upon exercise and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.
INVESTOR CONTACT:
invest@asensus.com
OR
MEDIA CONTACT:
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Source: Asensus Surgical, Inc.