Mazor Robotics Reports Third Quarter Financial Results
System Utilization Rising as Patient Self-Referral Increases and Surgeons Realize Higher Levels of Procedure Efficiency.
Mazor Robotics Ltd. (TASE:MZOR), a developer of innovative surgical robots and complementary products, today announced its financial results for the third quarter and nine months ending September 30, 2011.
“While the number of our surgical robot systems sold during the third quarter remained flat with the year ago period, system utilization continues to increase, especially at U.S. installations,” said Ori Hadomi, President & CEO. “In recent weeks, the annualized average number of cases per installation has risen from approximately 45 one year ago to nearly 80. This utilization growth rate compares favorably with the early adoption trends of other robotic medical devices. We remain the only robotic medical device company focused on the spine and brain, and our momentum in the spine market is increasing during the current fourth quarter.”
Revenue for the third quarter was $1.6 million, up from $1.5 million in the year ago period, and included the sale of three Renaissance™ systems, Mazor's next generation surgical robotic system launched in June 2011 that enables surgeons to conduct minimally invasive and complex spine and brain surgeries in a safe and accurate manner. During the quarter, the Company recognized revenue from the sale of Renaissance systems to distributors in Korea and Italy and to The Mainz Hospital in Germany.
Gross margin was 70% in the third quarter, down from 81% from the prior year quarter. The year-over-year decrease is primarily the result of operating infrastructure investment in 2011, in accordance with Israeli accounting rules under which operating infrastructure is included in cost of sales, as well as write-off of inventory and changes in product sales mix.
Operating expenses were $3.0 million in the third quarter, an increase of 30% compared to the $2.3 million in the year ago period. The increase was primarily due to increased G&A expenses, higher research and development expenditures related to further development of new application of the Renaissance system and continued development of the Company’s new brain surgery application, higher sales and marketing expenditures associated with the introduction of the Renaissance system in late June including the expansion of the U.S. sales force and entrance to new markets in Asia and Europe.
The net loss for the third quarter was $(1.8) million, or $(0.30) per share, compared to a net loss of $(1.3) million, or $(0.07) per share, reported for the year ago quarter.
During the third quarter, the Company used approximately $2.2 million in cash for operations and at September 30, 2011, cash, cash equivalents and investments totaled $18.6 million, compared to $18.1 million on December 31, 2010.
“We recently completed a very successful participation at the annual NASS conference,” added Mr. Hadomi. “Several of our U.S. installations are reporting direct patient referrals as a result of the institution’s local marketing effort and Mazor’s national marketing program. Additionally, we are finding that an increasing number of surgeons are realizing procedure efficiencies regardless of the complexity of the cases, when using our robotic technology and some surgeons are reporting a 20 percent to 40 percent reduction in the number of implants used per procedure when using a Mazor system. As a result, the overall cost of the spinal procedure is lowered, positively impacting the patient, the payor and the hospital.
“Because of the efficiencies generated by our systems, we are experiencing broadening use of our system by our customers,” continued Mr. Hadomi. “While the Mazor system provides great benefit in treating complex cases, we now believe that approximately 50% of the cases performed with the Mazor robotic technology are considered complex. In addition, approximately 30% of the cases are considered minimally invasive and 20% of the cases are lower back, lumbar degenerative disease cases.
“In addition to the momentum we are building in the spinal market, we are making progress towards the use of our Renaissance system for brain surgical procedures. We recently received a CE Mark for the use of the Renaissance for guidance of surgical tools and implantable devices in the brain, and we expect that the first brain procedures using the Renaissance will take place in Europe during the first half of 2012. In addition, we expect to submit our application to use Renaissance for brain surgeries in the U.S. to the Food and Drug Administration during the first part of next year,” concluded Mr. Hadomi.
The target applications for the precise positioning provided by Renaissance for brain surgery are deep brain stimulation, biopsy and shunt placements.
Year-to-Date Financial Performance
For the first nine months ended September 30, 2011, revenue was $4.0 million, a 49% increase over the $2.7 million reported for the nine months ended September 30, 2010. The revenue growth is the result of investment in sales and marketing activities in the U.S., Europe, as well as initial penetration of new markets in Asia. Gross margin for the nine month period was 69.0% compared with 80.0% for the prior year period. For the nine months to date, operating expenses were $9.1 million compared with $5.9 million in the year ago period. The net loss for the nine months was $(6.5) million compared with $(4.1) million for the comparable period of 2010.
Mazor Robotics (TASE:MZOR) is dedicated to the development and marketing of innovative surgical robots and complementary products that provide a safer surgical environment for patients, surgeons, and OR staff. Mazor Robotics’ flagship product, Renaissance™, is a state-of-the-art surgical robotic system that enables surgeons to conduct spine surgeries in an accurate and secure manner. Mazor Robotics systems have been successfully used in the placement of over 12,000 implants in the USA and Europe. Multiple peer-reviewed publications and presentations at leading scientific conferences have validated the accuracy, usability, and clinical advantages of Mazor Robotics technology. The Company received authorization to affix a CE Mark for the Renaissance system in Europe for brain surgeries in May 2011. For more information, please visit www.mazorrobotics.com.
|Income Statement Highlights||9 months ended||3 months ended|
|Cost of Goods Sold||1,262||548||480||273||1,011|
|Marketing & Sales||4,870||3,248||1,657||1,308||4,646|
|Finance Income, Net (Expense)||(145||)||(331||)||60||(244||)||-493|
|Loss Before Income Tax||-6,446||-4,052||-1,763||-1,333||-6,057|
|Loss for Period||-6,460||-4,062||-1,769||-1,336||-6,065|
|Mazor Robotics Ltd.|
|Consolidated Balance Sheet as of 30 September 2011|
|In Thousand USD|
|Cash and Cash equivalent||3,279||3,496||4,802||3,644|
|Short term Deposit||1,900||-|
|Short term Investment||13,395||15,784||13,335||18,972|
|Long term Assets||-||-||-||-|
|Restricted cash deposit||-||-||-||-|
|Deposit for car Lease||57||54||47||47|
|Long term Liabilities||-||-||-||-|
|Liability to the Chief Scientist||509||745||784||693|
Source(s) : Mazor Robotics Ltd.
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