Cardiac Posts Higher Loss - Analyst Blog

Surgical devices maker Cardica Inc (CRDC) reported second-quarter fiscal 2011 (ended December 31) net loss per share of 13 cents, higher than the Zacks Consensus Estimate of a loss of 11 cents. Net loss swelled roughly 50% year over year to $3.3 million as higher costs offset an increase in the top line.

Revenues for the quarter surged 12% year over year to $1.2 million, ahead of the Zacks Consensus Estimate of $1 million, supported by higher product sales which rose roughly 7% year over year to $1.1 million.

Consolidated operating costs and expenses climbed 38% year over year to $4.5 million as cost of product sales rose roughly 37% and Cardica spent more on R&D (up 61.5%) and selling, general and administrative (up 18%) expenses. The significant rise in R&D expenses is attributable to the company's ongoing development of its endoscopic staplers. 

The company exited the quarter with cash and cash equivalent of roughly $12.6 million, a 13.5% year-over-year improvement (down 15% sequentially).  

Cardica manufactures proprietary stapling devices for endoscopic and cardiac surgery procedures. Its technology is designed to reduce operating time and enable minimally-invasive and robot-assisted surgeries. The company markets its automated anastomosis systems for coronary artery bypass graft (“CABG”) surgery and has sold over 33,000 units globally.

Cardica is developing the Microcutter line of novel endoscopic stapling devices for use in a variety of surgeries that require cutting and stapling. The company expects to receive the European CE Mark for its initial Microcutter product in the third quarter.

Cardica entered into a licensing pact with Intuitive Surgical (ISRG) in August 2010, under which the latter obtained the exclusive global license to Cardica's intellectual property, related to tissue cutting, stapling and clip appliers for application in the robotics field. In return, Intuitive made an upfront license payment of $12 million and an equity investment of about 1.25 million shares of Cardica's common stock. Cardica has used the license fee to repay all of its outstanding debt.

 
CARDICA INC (CRDC): Free Stock Analysis Report
 
INTUITIVE SURG (ISRG): Free Stock Analysis Report
 
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