TransEnterix, Inc. Reports Operating Results for the Fourth Quarter and Full Year 2015
RESEARCH TRIANGLE PARK, N.C., — (BUSINESS WIRE) — 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 fourth quarter and full year 2015.
Full Year 2015 Operating Highlights •Completed Acquisition of the ALF-X® System from SOFAR S.p.A.
•Submitted 510(k) Application to the FDA for the SurgiBot™ System
•Raised $58.3 Million in Net Proceeds from Equity and Debt Transactions
•Strengthened Global Leadership Team with the Appointment of Senior Executives
“2015 was a transformative year for TransEnterix, as we are now positioned as a global surgical robotics company. In 2016, our focus will shift from product development to commercial execution,” said Todd M. Pope, President and Chief Executive Officer of TransEnterix. “We will continue building the infrastructure to support the commercialization of the ALF-X in multiple countries that accept CE Mark, and we remain focused on achieving FDA clearance for the SurgiBot by the end of March, 2016, and preparing for a U.S. commercial launch.”
Financial Highlights For the three months ended December 31, 2015, the Company reported research and development expenses of $8.6 million, sales and marketing expenses of $1.7 million, general and administrative expenses of $2.2 million, amortization of intangible assets of $1.6 million, and acquisition related costs of $0.2 million. Operating expenses were primarily associated with the commercialization of the ALF-X and the development of the SurgiBot.
For the full year ended December 31, 2015, the Company reported research and development expenses of $29.7 million, sales and marketing expenses of $2.9 million, general and administrative expenses of $7.8 million, amortization of intangible assets of $2.2 million, and acquisition related costs of $4.2 million. Operating expenses were primarily associated with the acquisition of the ALF-X and the development of the SurgiBot.
ALF-X Business Update In the fourth quarter, the Company completed integration of the Surgical Robotics Division of SOFAR S.p.A. The commercialization team for the ALF-X was significantly expanded and now is comprised of 10 employees. The Company initiated digital marketing campaigns targeted at surgeons and hospital administrators across Europe and the Middle East. The Company participated in seven medical symposia, including four where the ALF-X was on-site for surgeon demonstrations. In addition, sales activities were commenced in targeted markets in Europe.
2016 Priorities and Expectations During 2016, the Company will continue to expand its sales and service infrastructure for the ALF-X System in Europe and the Middle East. Following SurgiBot FDA clearance, the Company intends to expand its U.S. sales and service infrastructure, develop training sites and work with key opinion leaders to gain clinical experience on SurgiBot. The Company plans to submit a 510(K) application to the FDA for the ALF-X system in the fourth quarter of 2016 and capitalize on the U.S. market opportunity in 2017 with a dual-platform portfolio.
Cash Outlook The Company had cash and cash equivalents of approximately $38.4 million as of December 31, 2015, and approximately $47.1 million as of February 29, 2016. The Company expects its existing cash and cash equivalents to fund operations through the end of 2016. Pursuant to the disclosure requirements of the NYSE MKT Company Guide Section 610(b), the Company is reporting that its audited consolidated financial statements for the fiscal year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission expected to be filed on or about March 3, 2016, contains an audit opinion from its independent registered public accounting firm that includes an explanatory paragraph related to the Company’s ability to continue as a going concern.
Conference Call TransEnterix, Inc. will host a conference call on Thursday, March 3, 2016 at 4:30 PM ET to discuss its fourth quarter and full year 2015 operating and financial results. To listen to the conference call on your telephone, please dial (888) 505-4369 for domestic callers or (719) 457-0820 for international callers approximately ten minutes prior to the start time. Management will refer to a presentation that is available for download on the Company’s website. To download the presentation or to access the live audio webcast or archived recording, use the following linkhttp://ir.transenterix.com/events.cfm. The replay will be available on the Company’s website.
About TransEnterix 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 development and commercialization of the SurgiBot System, a single-port, robotically enhanced laparoscopic surgical platform, and the commercialization of the ALF-X, 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 tracking camera control. The SurgiBot System is not yet available for sale in any market. The ALF-X has been granted a CE Mark but is not available for sale in the US. For more information, visit the TransEnterix website atwww.transenterix.com.
Forward Looking Statements This press release includes statements relating to initial fourth quarter and full year 2015 results and the SurgiBot System, the ALF-X® System and our current regulatory and commercialization plans for these products. 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 we will achieve clearance for the SurgiBot System from the FDA and prepare for a U.S. launch; whether we will be able to successfully commercialize the SurgiBot System and the ALF-X System, and whether the Company’s existing cash and cash equivalents will fund operations through 2016. 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 onForm 10-K 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.
Investor Contact: Westwicke Partners Mark Klausner, 443-213-0501 invest@transenterix.com or Media Contact: TransEnterix, Inc. Mohan Nathan, 919-917-6559 mnathan@transenterix.com
1
TransEnterix, Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts)
(unaudited)
Three months ended
Year ended
December 31,
December 31,
2015
2014
2015
2014
Sales
$
—
$
134
$
—
$
401
Operating Expenses
Cost of goods sold
—
435
—
1,095
Research and development
8,558
5,984
29,669
27,944
Sales and marketing
1,694
404
2,855
1,727
General and administrative
2,224
985
7,831
5,741
Amortization of intangible assets
1,596
126
2,185
503
Change in fair value of contingent consideration
(400
)
—
(400)
—
Acquisition related costs
228
—
4,231
—
Total Operating Expenses
13,900
7,934
46,371
37,010
Operating Loss
(13,900
)
(7,800
)
(46,371
)
(36,609
)
Other Expense
Interest expense, net
(604
)
(279
)
(1,601
)
(1,043
)
Total Other Expense, net
(604
)
(279
)
(1,601
)
(1,043
)
Loss before income taxes
$
(14,504
)
$
(8,079
)
$
(47,972
)
$
(37,652
)
Income tax benefit
925
—
1,024
—
Net loss
$
(13,579
)
$
(8,079
)
$
(46,948
)
$
(37,652
)
Other comprehensive loss
Foreign currency translation loss
$
(2,737
)
$
—
$
(3,166
)
$
—
Comprehensive loss
$
(16,316
)
$
(8,079
)
$
(50,114
)
$
(37,652
)
Net loss per share — basic and diluted
$
(0.13
)
$
(0.13
)
$
(0.59
)
$
(0.64
)
Weighted average common shares outstanding — basic and diluted
100,145
63,171
79,628
58,714
TransEnterix, Inc. Consolidated Balance Sheets (in thousands, except share amounts)
(unaudited)
Year Ended
December 31,
2015
2014
Assets
Current Assets
Cash and cash equivalents
$
38,449
$
34,766
Accounts receivable, net
76
133
Inventories
3,923
—
Interest receivable
6
1
Other current assets
6,689
740
Total Current Assets
49,143
35,640
Inventories
709
—
Restricted cash
—
250
Property and equipment, net
4,408
3,120
Intellectual property, net
46,898
2,241
In-process research and development
16,511
—
Goodwill
130,869
93,842
Other long term assets
64
18
Total Assets
$
248,602
$
135,111
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable
$
4,450
$
1,768
Accrued expenses
7,395
1,769
Contingent consideration – current portion
12,500
—
Notes payable — current portion
6,727
610
Total Current Liabilities
31,072
4,147
Long Term Liabilities
Contingent consideration – less current portion
11,000
—
Net deferred tax liabilities
16,263
—
Notes payable — less current portion, net of debt discount
12,990
9,175
Total Liabilities
71,325
13,322
Commitments and Contingencies
Stockholders’ Equity
Common stock $0.001 par value, 750,000,000 shares authorized at December 31, 2015 and 2014; 100,180,872 and 63,182,806 shares issued at December 31, 2015 and December 31, 2014, respectively; and 100,149,453 and 63,182,806 shares outstanding at December 31, 2015 and December 31, 2014, respectively
100
63
Additional paid-in capital
363,280
257,642
Accumulated deficit
(182,864
)
(135,916
)
Treasury stock at cost, 31,419 and 0 shares at December 31, 2015 and December 31, 2014, respectively
(73
)
—
Accumulated other comprehensive loss
(3,166
)
—
Total Stockholders’ Equity
177,277
121,789
Total Liabilities and Stockholders’ Equity
$
248,602
$
135,111
2
TransEnterix, Inc. Consolidated Statements of Cash Flows (in thousands)
(unaudited)
Year Ended
December 31,
2015
2014
Operating Activities
Net loss
$
(46,948
)
$
(37,652
)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation
1,248
807
Amortization of intangible assets
2,185
503
Amortization of debt discount and debt issuance costs
142
83
Stock-based compensation
3,311
1,840
Loss on disposal of property and equipment
34
86
Deferred tax benefit
(1,024
)
—
Change in fair value of contingent consideration
(400
)
—
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable
133
55
Interest receivable
(5
)
67
Inventories
(1,928
)
701
Other current and long term assets
(1,974
)
(170
)
Restricted cash
250
125
Accounts payable
1,096
(36)
Accrued expenses
5,371
363
Net cash and cash equivalents used in operating activities
(38,509
)
(33,228
)
Investing Activities
Proceeds from sale and maturities of investments
—
6,191
Proceeds from sale of property and equipment
—
25
Payments for acquisition of a business
(25,000
)
—
Purchase of property and equipment
(1,234
)
(2,174
)
Net cash and cash equivalents (used in) provided by investing activities
(26,234
)
4,042
Financing Activities
Payment of debt
—
(2,877)
Proceeds from issuance of common stock, net of issuance costs
58,331
52,433
Proceeds from issuance of debt, net of debt discount
9,887
4,291
Taxes paid related to net share settlement of vesting of restricted stock units
(73
)
—
Proceeds from exercise of stock options and warrants
259
91
Net cash and cash equivalents provided by financing activities
68,404
53,938
Effect of exchange rate changes on cash and cash equivalents
22
—
Net increase in cash and cash equivalents
3,683
24,752
Cash and Cash Equivalents, beginning of period
34,766
10,014
Cash and Cash Equivalents, end of period
$
38,449
$
34,766
Supplemental Disclosure for Cash Flow Information
Interest paid
$
973
$
904
Supplemental Schedule of Noncash Investing and Financing Activities
Issuance of common stock warrants
$
97
$
54
Contingent consideration related to acquisition
$
23,900
$
—
Issuance of common stock related to acquisition
$
43,677
$
—
3
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