As filed with the Securities and Exchange Commission on April 15, 2004

Registration No. 333-110996

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 7
TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

IMMUNICON CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

3401 Masons Mill Road, Suite 100
Huntingdon Valley, Pennsylvania 19006
(215) 830-0777

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

Edward L. Erickson
Chairman, President and Chief Executive Officer
Immunicon Corporation
3401 Masons Mill Road, Suite 100
Huntingdon Valley, Pennsylvania 19006
(215) 830-0777
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:

        Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. / /

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

        If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. / /

        The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

6,000,000 Shares

Common Stock

This is the initial public offering of our common stock. No public market currently exists for our common stock. We are offering all of the 6,000,000 shares of common stock offered by this prospectus. We expect the public offering price to be $8.00 per share.

Our common stock has been approved for quotation on The Nasdaq National Market, subject to official notice of issuance, under the symbol "IMMC."

Investing in our common stock involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our common stock in "Risk factors" beginning on page 8 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters may also purchase up to an additional 900,000 shares of our common stock at the public offering price, less the underwriting discounts and commissions payable by us, to cover over-allotments, if any, within 30 days from the date of this prospectus. If the underwriters exercise this option in full, the total underwriting discounts and commissions will be $                    and our total proceeds, before expenses, will be $                    .

The underwriters are offering the common stock as set forth under "Underwriting." Delivery of the shares will be made on or about                           , 2004.

UBS Investment Bank

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with additional information or information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of shares of our common stock.

TABLE OF CONTENTS

Immunicon is a registered trademark of Immunicon Corporation. The Immunicon logo is a registered stylized trademark of Immunicon Corporation. CellTracks EasyCount, EasyCount, CellTracks MagNest, CellPrep, CellSave, CellSpotter, CellTracks, AutoPrep and IMMC are trademarks of Immunivest Corporation, a wholly owned subsidiary of Immunicon Corporation. The CellTracks Analyzer logo, CellTracks AutoPrep logo, CellTracks MagNest logo, CellSave Preservative Tube logo, CellSave Tube Cap logo, and CellSpotter Analyzer logo are stylized trademarks of Immunivest Corporation. CellSearch is a registered trademark of Johnson & Johnson. All other trademarks appearing in this prospectus are the property of their respective holders.

Prospectus summary

This summary highlights selected information appearing elsewhere in this prospectus. While this summary highlights what we consider to be the most important information about us, you should carefully read this prospectus and the registration statement of which this prospectus is a part in their entirety before investing in our common stock, especially the risks of investing in our common stock, which we discuss under "Risk factors", and our financial statements and related notes beginning on page F-1.

Unless the context requires otherwise, the words "Immunicon," "we," "Company," "us" and "our" refer to Immunicon Corporation and its subsidiaries.

OUR BUSINESS

We are developing and commercializing proprietary cell-based research and diagnostic products with an initial focus on cancer. We believe that our products can provide significant clinical benefits by giving physicians better information to understand, diagnose, treat and monitor cancer. Our technologies, which we brand as CellTracks, can identify, count and characterize a small number of tumor cells present in a blood sample from a patient. Our collaborator, Veridex, LLC, or Veridex, a Johnson & Johnson company, received 510(k) clearance from the US Food and Drug Administration, or FDA, in January 2004 for use of the CellSearch Epithelial Cell Kit, which incorporates our technologies, in the management of metastatic breast cancer (breast cancer that has spread beyond the primary tumor). We expect that the CellSearch Epithelial Cell Kit, which is currently available for sale for research purposes only, will be the initial diagnostic product launched by Veridex based on our technologies. We believe that our products and underlying technology platforms have other applications in cancer diagnostics, in the clinical development of cancer drugs and in cancer research, which we would commercialize under the terms of our agreement with Veridex. In addition, we believe that our proprietary technologies may have applications in other fields of medicine, such as cardiovascular and infectious diseases, which we could pursue on our own or with a commercial partner.

Our products are intended for use as an integrated system, consisting of kits containing reagents (chemically active substances) for use with our instruments and other system components that enable scientists, physicians and laboratories to collect, isolate, label, count and analyze tumor cells in the blood, known as circulating tumor cells, or CTCs. CTCs can appear in extremely low number, sometimes as few as one or two CTCs in a test tube of blood that contains billions of cells of various types. Our clinical trials results suggest that the presence of even a few CTCs in a blood sample is biologically and clinically important, as it predicts whether a therapy is likely to offer benefit to the patient.

Based on findings from our pivotal clinical trial and research studies, we believe that our products can enable physicians to predict the likely time to disease progression and survival in cancer patients more accurately and earlier than existing methods. As a result, the physician may be able to:

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more effectively select an appropriate cancer therapy;

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better monitor the effectiveness of ongoing treatment;

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change from ineffective cancer therapies sooner; and

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reduce overall treatment costs.

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Moreover, we believe that our products address many of the limitations of currently available cancer diagnostic and research methods and provide physicians and patients with the following benefits:

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a minimally invasive sample collection procedure based on a standard blood draw;

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ease of administration relative to imaging techniques such as CT and MRI scans; and

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potentially improved patient outcomes, including quality of life, time to disease progression and survival.

Our research studies suggest that our technologies can detect CTCs in certain solid tumor cancers in addition to breast cancer, specifically prostate, colorectal, lung and ovarian cancers. Based on these results, we are conducting or planning additional research studies and clinical trials designed to verify prior studies and support additional regulatory submissions. Based on the results from our internal research, we are also now in the early stages of developing a product based on our existing platforms that is designed to detect and analyze endothelial cells in blood. Endothelial cells, which are types of cells that make up the inner lining of blood vessels, are believed to play an important role and have diagnostic utility not only in cancer, but also in autoimmune disorders (diseases caused by the body's own immune system) and cardiovascular diseases. We are also exploring the potential of our technologies to develop products that can detect pathogens in the blood, such as fungi, that may be useful in the diagnosis of certain infectious diseases.

OUR COMMERCIALIZATION PLANS

To support commercialization of our products, we entered into a development, license and supply agreement with Veridex, under which Veridex has exclusive worldwide rights in the field of cancer to make and commercialize any cellular analysis products based on our technologies. Under the agreement with Veridex, Veridex is obligated to pay us approximately 30% of their net sales from the sale of reagents, test kits and certain other consumable and disposable items incorporating our technologies. Unless earlier terminated, this agreement has an initial term of 20 years and will be automatically renewed for three-year terms. There are various conditions that allow either party to terminate the agreement, including a material breach by either party or by mutual agreement. Veridex may terminate this agreement with or without reason at any time with 24 months' prior written notice. In addition, prior to shipment for commercial sale of the first diagnostic product resulting from this agreement, Veridex may terminate this agreement by providing us with 180 days' prior written notice. If a major competitor in the in vitro diagnostic, or IVD, field acquires us, Veridex also may terminate this agreement.

We and Veridex are currently marketing the following products, initially for research use only, or RUO, as a system and not as stand-alone products:

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CellSearch Epithelial Cell Kit, consisting of reagents and other supplies for isolating and labeling of CTCs;

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CellTracks AutoPrep System, an automated instrument to process blood samples prior to analysis;

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CellSpotter Analyzer, a semi-automated fluorescence microscope used to count and characterize cells; and

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CellSave Preservative Tube, a blood sample collection tube with preservative to collect and preserve blood samples for analysis.

All of these products have received FDA clearance for IVD use.

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We and Veridex plan to launch these products for IVD use in the third quarter of 2004. This launch is subject to the clearance of a 510(k) for the CellSearch Epithelial Cell Control, which consists of two levels of controls required to be run daily to ensure our integrated system is operating properly. Veridex submitted the 510(k) for these controls in April 2004. In addition, we expect that the CellSearch Profile Kit, consisting of reagents and supplies for isolating epithelial cells (cells that cover external and internal body surfaces and give rise to the majority of solid tumors) for molecular analysis, will be available for RUO in the second quarter of 2004. We also expect that the CellTracks Large Volume Sample Preparation System, or LVSP System, for pre-processing large blood samples, consisting of an instrument, reagents, and proprietary disposables, will be available for sale in the second half of 2004. We believe that this system is necessary to develop certain clinical indications for our products in early stages of cancer, detection of cancer recurrence, cancer risk assessment and screening applications.

In connection with the 510(k) clearance for the CellSearch Epithelial Cell Kit using our CellSpotter Analyzer, the FDA established a new classification of medical devices under its "de novo", or new, device review process. We anticipate that most of our initial products will be covered under this classification, which will be incorporated into the Code of Federal Regulations. This classification includes systems for selecting and counting CTCs, which are intended for use in conjunction with other diagnostic methods for monitoring or predicting cancer disease progression, response to therapy and the detection of recurrent disease. We believe this classification will cover most of our anticipated future cancer products, with the exception of products for cancer screening. Any future products covered by this new classification would be designated as Class II versus Class III devices by the FDA, and therefore, may be reviewed through the 510(k) submission process, as opposed to the more expensive and lengthy pre-market approval, or PMA, process for Class III devices.

OUR SOLUTION

We believe that the ability to predict survival in metastatic breast cancer with our technologies represents a potential breakthrough in cancer disease management. We believe that our products will help to address the following clinical needs:

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early diagnosis of cancer;

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effective tools for more complete diagnosis, staging and selection of primary therapy;

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effective monitoring of post-surgical and metastatic disease therapies; and

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early detection of recurrence and selection of appropriate therapies following recurrence.

Additionally, we believe that our products will provide pharmaceutical and biotechnology companies working on new cancer drugs with timely information on the performance of these drugs, which may shorten the drug development process. For instance, in early drug trials, we believe that the analysis of CTCs will help drug companies to select the right patient population in which to test a new drug and provide early and reliable information on the efficacy of this drug. The FDA evaluates efficacy of new drugs or drug combinations based on patient survival and/or certain accepted surrogate endpoints, such as a significant decrease in tumor burden (the total amount of tumor mass in the patients body) as assessed by imaging studies. Although we believe additional clinical data will be required to validate CTCs as a surrogate endpoint to the satisfaction of the FDA, we believe that CTCs may serve as an alternative to survival or costly imaging studies as a drug trial endpoint. Such a surrogate endpoint may permit shorter and less costly late-stage drug trials, and potentially bring new cancer therapies to the market sooner.

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OUR STRATEGY

Our goal is to be a leader in the development and commercialization of proprietary cell analysis products that deliver high impact clinical and scientific information for use in human diagnostics, life science research and pharmaceutical development. The key elements of our strategy are to optimize the value of our proprietary technologies and maximize long-term profitability by:

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developing and commercializing cancer research and diagnostic products;

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developing multiple indications for each of our cancer diagnostic products;

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expanding the applications of our technologies to other fields of medicine in addition to cancer;

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seeking commercialization partners for our non-cancer product candidates; and

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continuously improving our products and technologies to remain competitive.

RISKS ASSOCIATED WITH OUR BUSINESS

We are a development-stage company. Accordingly, our business plan is subject to numerous risks and obstacles, including those that we highlight under "Risk factors." In particular, we have a limited operating history and have incurred substantial losses since inception. We incurred net losses of approximately $17.6 million for the year ended December 31, 2003, and our total deficit incurred from our inception in 1983 through December 31, 2003 was approximately $63.6 million. Our revenue to date has been derived principally from license revenue rather than from product sales or other revenue sources. From the inception of our agreement with Veridex in August 2000 through December 31, 2003, we recognized license revenue of $4.0 million in milestone receipts from Veridex. For the years ended December 31, 2002 and 2003, we recognized $311,000 and $338,000, respectively, as other revenue from certain government-sponsored research grants and from the sale of miscellaneous products to research and other organizations. We have very limited sales of commercial products, and we anticipate that we will incur substantial losses in the future and we may never achieve and maintain profitability. Moreover, we are dependent on the efforts of Veridex, which we do not control, for marketing of the cancer products based on our technologies. We do not know whether Veridex will market these products effectively, whether adequate levels of third-party reimbursement will be available for these products, or whether these products will sell well in the marketplace.

OUR CORPORATE INFORMATION

We incorporated in the Commonwealth of Pennsylvania as Immunicon Corporation in August 1983. In December 2000, we merged with and into Immunicon Corporation, a Delaware corporation. Our principal executive offices are located at 3401 Masons Mill Road, Suite 100, Huntingdon Valley, Pennsylvania 19006, and our telephone number is (215) 830-0777. Our web site address is www.immunicon.com. We do not intend for the information contained on our website to be incorporated by reference into, or to form any part of, this prospectus.

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The offering

The number of shares of our common stock outstanding immediately after the closing of this offering is based on 15,933,633 shares of our common stock outstanding as of December 31, 2003 after giving effect to the conversion of all 51,390,552 shares of preferred stock outstanding as of December 31, 2003 into 15,447,813 shares of our common stock, which will become effective at the closing of this offering.

The number of shares of our common stock outstanding immediately after this offering excludes:

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2,565,295 shares of our common stock issuable upon the exercise of stock options outstanding as of December 31, 2003 under our equity compensation plan at a weighted average exercise price of $2.35 per share;

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1,167,547 shares of our common stock available for future issuance under our equity compensation plan at the closing of this offering (based on options outstanding as of December 31, 2003) and 200,000 shares of our common stock that will be available for future issuance under our employee stock purchase plan; and

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210,687 shares of our common stock issuable upon the exercise of warrants outstanding as of December 31, 2003 at a weighted average exercise price of $4.32 per share.

Unless otherwise indicated, all information in this prospectus:

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assumes that the underwriters do not exercise their option to purchase up to 900,000 additional shares of our common stock to cover over-allotments, if any;

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gives effect to the two-for-three reverse stock split of our common stock completed in March 2004;

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gives effect to the amendment and restatement of our certificate of incorporation and bylaws, which will become effective at the closing of this offering; and

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gives effect to the amendment and restatement of our equity compensation plan and the establishment of our employee stock purchase plan, which will become effective upon the effectiveness of the registration statement for this offering.

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Summary consolidated financial data

The following summary financial data for the years ended December 31, 1999, 2000, 2001, 2002 and 2003 have been derived from our audited consolidated financial statements. The summary consolidated financial data set forth below should be read together with the financial statements and the related notes to those statements, as well as "Management's discussion and analysis of financial condition and results of operations," appearing elsewhere in this prospectus.

(1)

The pro forma basic and diluted net loss per share reflects the weighted effect of the assumed conversion of convertible preferred stock. See note 2 to our consolidated financial statements for information regarding computation of basic and diluted net loss per share and pro forma basic and diluted net loss per share.

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The following table contains a summary of our consolidated balance sheet as of December 31, 2003:

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on an actual basis;

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on a pro forma basis to give effect to the conversion of all 51,390,552 shares of our preferred stock outstanding as of December 31, 2003 into 15,447,813 shares of our common stock, which will become effective at the closing of this offering; and

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on a pro forma as adjusted basis to give further effect to the sale of the shares of our common stock we are offering at an assumed initial public offering price of $8.00 per share, after deducting underwriting discounts and commissions and estimated offering expenses to be paid by us.

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Risk factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below with all of the other information included in this prospectus before deciding to invest in our common stock. If any of the following risks actually occur, they may materially harm our business and our financial condition and results of operations. In this event, the market price of our common stock could decline and you could lose part or all of your investment.

RISKS RELATING TO OUR BUSINESS

We have a history of operating losses, expect to continue to incur substantial losses, and might never achieve or maintain profitability.

We are a development-stage company with limited operating history. We have incurred significant net losses since we began operations in 1983, including net losses of $12.0 million for the year ended December 31, 2001, $18.3 million for the year ended December 31, 2002 and $17.6 million for the year ended December 31, 2003. As of December 31, 2003, we had a deficit accumulated during our development stage of $63.6 million. These losses have resulted principally from costs incurred in our research and development programs and from our general and administrative expenses. Because our operating expenses are likely to increase significantly in the near term, we will need to generate significant additional revenue to achieve profitability. We do not expect to have any operating revenue from the sales of our products until at least the first quarter of 2004 with respect to products for RUO, and until at least the second half of 2004 with respect to IVD products. Even after we begin selling our products, we expect our losses to continue to increase as a result of ongoing research and development and clinical trial expenses, as well as increased manufacturing, sales and marketing expenses. These losses, among other things, have had and will continue to have an adverse effect on our working capital, total assets and stockholders' equity. Because of the numerous risks and uncertainties associated with our product development efforts, we are unable to predict when we will become profitable, and we may never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we are unable to achieve and then maintain profitability, the market value of our common stock will decline.

If our relationship with Veridex is terminated, we may be unable to commercialize effectively certain of our products based on our technologies in the field of cancer.

We entered into a development, license and supply agreement with Veridex, under which we granted to Veridex a worldwide exclusive license in the field of cancer to commercialize cell analysis products based on our technologies. We also appointed Veridex as our exclusive sales, invoicing and collection agent for our cell analysis instrumentation in cancer. Prior to shipment for commercial sale of the first product resulting from this agreement, Veridex may terminate this agreement with or without reason by providing us with 180 days' prior written notice. Thereafter, Veridex may terminate this agreement with or without reason at any time by providing us with 24 months' prior written notice. Veridex also may terminate this agreement if we are in material breach or are acquired by a competitor in the IVD field. In addition, while we have granted Veridex the exclusive right to market, distribute and conduct field, technical, customer service and certain manufacturing finishing operations for these products, this agreement provides that Veridex has very limited obligations to perform these functions. For example, the agreement does not require Veridex to meet any minimum levels with respect to sales, marketing personnel or other marketing expenditures. If Veridex were to terminate, fail to meet its obligations under this agreement or fail to deploy adequate resources to commercialize products under this agreement:

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we would incur significant delays and expense in the commercialization of these products;

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we might be unable to enter into a similar agreement with another company with similar resources to commercialize these products and perform these functions on acceptable terms, if at all; and

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we might be unable to commercialize these products or perform these functions successfully ourselves.

Any of these outcomes could result in delays in our ability to generate revenues from the sales of these products, an increase in our expenses and a resulting adverse impact on our operations and financial results, and the value of our common stock would likely decline.

Following commercialization, if we and Veridex are able to generate product sales under our agreement, we are required to invest an amount ranging from between 8.5% and 10% of total net product sales by Veridex, excluding revenue from cell analysis system sales, in research and development for cancer-related cell analysis products.

If our products and Veridex's products do not achieve market acceptance, we will be unable to generate significant revenues from them.

The future commercial success of our products and of Veridex's products based on our technologies will depend primarily on:

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convincing research, reference and clinical laboratories to conduct validation studies using these products and to offer these products as research tools for scientists and clinical investigators and as diagnostic products to physicians, laboratory professionals and other medical practitioners; and

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convincing physicians, laboratory professionals and other medical practitioners to order tests for their patients involving our technologies.

To accomplish this, we and Veridex will need to convince oncologists, primary care physicians, surgeons, laboratory professionals and other members of the medical and biotechnology communities of the benefits of these products through published papers, presentations at scientific conferences and additional clinical trials. If we and Veridex are not successful in these efforts, the market acceptance for these products could be limited. Additionally, if ongoing or future clinical trials result in unfavorable or inconsistent results, these products may not achieve market acceptance. Other factors that might influence market acceptance of these products include the following:

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evidence of clinical utility;

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ability to obtain sufficient third-party coverage or reimbursement;

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convenience and ease of administration;

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availability of alternative and competing diagnostic products;

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cost effectiveness;

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effectiveness of marketing, distribution and pricing strategy; and

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publicity concerning these products or competitive products.

If these products are unable to gain broad market acceptance, our business will suffer.

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If we or Veridex are not able to obtain all of the regulatory approvals and clearances required to commercialize our products, our business would be significantly harmed.

The products based on our technologies are generally regulated as medical devices by the FDA and comparable agencies of other countries. In particular, FDA regulations govern, among other things, the activities that we and Veridex perform, including product development, product testing, product labeling, product storage, pre-market clearance or PMA approval, manufacturing, advertising, promotion, product sales, reporting of certain product failures and distribution.

Most of the products that we plan to develop and commercialize in the US will require either pre-market notification, or 510(k) clearance, or PMA approval from the FDA prior to marketing. The 510(k) clearance process usually takes from two to twelve months from submission, but can take longer. The PMA process is much more costly, lengthy, uncertain and generally takes from one to two years or longer from submission. We do not know whether we or Veridex will be able to obtain the clearances or approvals required to commercialize these products. Prior to commercialization of our products for IVD use, we will need to obtain 510(k) clearance from the FDA for the CellSearch Epithelial Cell Control, which consists of two levels of controls required to be run daily to ensure our integrated system is operating property. Veridex submitted the 510(k) for these controls in April 2004.

All of the products that we or Veridex intend to submit for FDA clearance or approval will be subject to substantial restrictions, including, among other things, restrictions on the indications for which we and Veridex may market these products, which could result in lower revenues. The marketing claims we and Veridex will be permitted to make in labeling or advertising regarding our cancer diagnostic products, if cleared or approved by the FDA, will be limited to those specified in any clearance or approval. We expect that initially many of these products will be limited to RUO. In addition, both we and Veridex are subject to inspection and marketing surveillance by the FDA to determine our compliance with regulatory requirements. If the FDA finds that we or Veridex have failed to comply with these requirements, it can institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions, including:

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fines, injunctions and civil penalties;

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recall or seizure of our products or Veridex's products;

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operating restrictions, partial suspension or total shutdown of production;

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denial of requests for 510(k) clearances or pre-market approvals of product candidates;

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withdrawal of 510(k) clearances or pre-market approvals already granted;

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disgorgement of profits; and

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criminal prosecution.

Any of these enforcement actions could affect our ability or Veridex's ability to commercially distribute our products in the US and may also harm our ability to conduct the clinical trials necessary to support the marketing, clearance or approval of these products.

If the third-party manufacturers we rely on either refuse or are unable to successfully manufacture certain of our products, we may be unable to commercialize these products.

We have limited commercial manufacturing experience and capabilities. We currently assemble, test and release the CellSpotter and CellTracks Analyzers, as well as bulk reagents and other associated products used with the CellTracks AutoPrep System, at our facility located in Huntingdon Valley,

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Pennsylvania. We currently have adequate manufacturing capacity to meet anticipated demand for 2004 and 2005. However, in order to meet anticipated demand thereafter, we will have to expand our manufacturing processes and facilities or increase our reliance on third-party manufacturers. Under our agreement with Veridex, we might be required to establish a second manufacturing facility or qualify a contract manufacturer in the future. We might encounter difficulties in expanding our manufacturing processes and facilities or in expanding our relationships with third-party manufacturers and might be unsuccessful in overcoming these difficulties. In that event, our ability to meet product demand could be impaired or delayed.

We face additional risks inherent in operating a single manufacturing facility for those products we manufacture ourselves. We do not have alternative production plans in place or alternative facilities available at this time. If there are unforeseen shutdowns to our facility, we will be unable to satisfy customer orders on a timely basis with respect to these products.

We rely currently and intend to continue to rely significantly in the future on third-party manufacturers to produce many of our products. For example, we are dependent on a small, private, contract design, engineering and manufacturing company, Astro Instrumentation, LLC, or Astro, for our CellTracks AutoPrep System. If Astro loses key personnel or encounters financial or other difficulties, they may be unable to continue to manufacture this system and provide ongoing design and engineering support for commercialization and future enhancements of this system, and we may have difficulty replacing them. In addition, we currently use a third-party manufacturer for our CellSave Preservative Tube. We are dependent on these third-party manufacturers to perform their obligations in a timely and effective manner and in compliance with FDA and other regulatory requirements. If these third-party manufacturers fail to perform their obligations, our competitive position and ability to generate revenue could be adversely affected in a number of ways, including:

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we might not be able to initiate or continue clinical trials on products that are under development;

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we might be delayed in submitting applications for regulatory approvals and clearances for products; and

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we might not be able to meet commercial demands for any approved or cleared products.

Any failures in manufacturing these products may also result in a breach of our agreement with Veridex.

If third-party payors do not reimburse customers for our products and Veridex's products, they might not be used or purchased, which would adversely affect our revenues.

The majority of the sales of our products and Veridex's products based on our technologies in the US and other markets will depend, in large part, on the availability of adequate reimbursement to users of these products from government insurance plans, including Medicare and Medicaid in the US, managed care organizations, private insurance plans and other third-party payors. Because these products have not yet been commercially introduced, third-party payors have no history of reimbursing for the cost of these products. Third-party payors are often reluctant to reimburse healthcare providers for the use of medical diagnostic products incorporating new technology. In addition, third-party payors are increasingly limiting reimbursement coverage for medical diagnostic products and, in many instances, are exerting pressure on medical products suppliers to reduce their prices. Consequently, third-party reimbursement might not be consistently available or adequate to cover the cost of our products. This could limit our ability or Veridex's ability to commercialize and sell these products or cause the prices of these products to be reduced, which would adversely affect our operating results.

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Because each third-party payor individually approves reimbursement, obtaining these approvals is a time-consuming and costly process that will require us and Veridex to provide scientific and clinical support for the use of each of these products to each third-party payor separately with no assurance that approval will be obtained. This process could delay the market acceptance of new products and could have a negative effect on our revenues and operating results.

If we or any of our third-party manufacturers do not maintain high standards of manufacturing in accordance with Quality System Regulations, our ability to develop, and Veridex's and our ability to commercialize our products, could be delayed or curtailed.

We and any third-party manufacturers that we currently rely on or will rely on in the future, including those we rely on to produce our CellTracks AutoPrep System and CellSave Preservative Tube, must continuously adhere to the current good manufacturing practices, or cGMP, set forth in the FDA's Quality System Regulations, or QSR, and enforced by the FDA through its facilities inspection program. In complying with QSR, we and any of our third-party manufacturers must expend significant time, money and effort in design and development, testing, production, record-keeping and quality control to assure that our products meet applicable specifications and other regulatory requirements. The failure to comply with these specifications and other requirements could result in an FDA enforcement action, including the seizure of products and shutting down production. We or any of these third-party manufacturers also may be subject to comparable or more stringent regulations of foreign regulatory authorities. In addition, we and Veridex will need to complete validation of some of the manufacturing processes for the products we plan to launch for IVD use in the third quarter of 2004 and would be unable to launch these products until this validation is completed. If we or any of our third-party manufacturers fail to comply with these regulations, we might be subject to regulatory action, which could delay or curtail our ability to develop, and Veridex's and our ability to commercialize, products based on our technologies.

If we fail to obtain necessary funds for our operations, we will be unable to continue to develop and commercialize new products and technologies.

We expect capital outlays and operating expenditures to increase over the next several years as we expand our infrastructure, commercialization, manufacturing, clinical trials and research and development activities. Specifically, we will need to raise additional capital to, among other things:

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sustain commercialization with Veridex of our initial products;

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pursue regulatory approvals and clearances;

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expand our technologies into other areas of cancer and medicine;

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expand our research and development activities;

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acquire or license technologies;

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fund our clinical trial activities;

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expand our manufacturing activities; and

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finance capital expenditures and our general and administrative expenses.

To date, we have raised capital primarily through private equity and debt financings, license and milestone revenues from corporate collaborations, capital equipment and leasehold financing, government grants and interest earned on cash and investments. We believe the net proceeds of this

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offering, together with our cash, cash equivalents and investments, will be sufficient to meet our operating and capital requirements for at least the next 18 months. However, our present and future funding requirements will depend on many factors, including, among other things:

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the level of research and development investment required to maintain and improve our technology position;

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costs of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights;

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our need or decision to acquire or license complementary technologies or acquire complementary businesses;

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changes in product development plans needed to address any difficulties in manufacturing or commercialization;

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competing technological and market developments; and

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changes in regulatory policies or laws that affect our operations.

We do not know whether additional financing will be available on commercially acceptable terms when needed. If adequate funds are not available or are not available on commercially acceptable terms, our ability to fund our operations, develop products or technologies or otherwise respond to competitive pressures could be significantly delayed or limited, and we might need to downsize or halt our operations.

If we raise additional funds by issuing equity securities, further dilution to our stockholders could result, and new investors could have rights superior to those of holders of the shares issued in this offering. Any equity securities issued also may provide for rights, preferences or privileges senior to those of holders of our common stock. If we raise additional funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders of our common stock, and the terms of the debt securities issued could impose significant restrictions on our operations. If we raise additional funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or products, or grant licenses on terms that are not favorable to us. If adequate funds are not available, we may have to delay or may be unable to continue to develop our products.

If the third parties we intend to contract with for clinical trials do not perform in an acceptable manner, or if we suffer setbacks in these clinical trials, our business may suffer.

We do not have the ability to independently conduct the clinical trials required to obtain regulatory clearances for our products. We intend to rely on third-party expert clinical investigators and clinical research organizations to perform these functions. If we cannot locate and enter into favorable agreements with acceptable third parties, or if these third parties do not successfully carry out their contractual obligations, meet expected deadlines or follow regulatory requirements, including clinical laboratory, manufacturing and good clinical practice guidelines, then we may be the subject of an enforcement action by the FDA or some other regulatory body, and may be unable to obtain clearances for our products or to commercialize them on a timely basis, if at all.

The completion of clinical trials of our products may be delayed by many other factors, including the rate of enrollment of patients. Neither we nor any third-party clinical investigators and clinical research organizations can control the rate of patient enrollment, and this rate might not be consistent with our expectations or sufficient to enable clinical trials of our products to be completed in a timely

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manner or to be completed at all. In addition, regulatory authorities might not permit us to undertake additional clinical trials for one or more of these products. If we suffer any significant delays in, setbacks or negative results in or termination of, clinical trials for our products, we may be unable to generate product sales from these products in the future.

If we lose key management or scientific personnel, scientific collaborators or other advisors, our business would suffer.

Our success depends, in large part, on the efforts and abilities of Edward L. Erickson, who is our Chairman, President and Chief Executive Officer, Leon W.M.M. Terstappen, who is our Senior Vice President of Research and Development and Chief Scientific Officer, and James G. Murphy, who is our Senior Vice President of Finance and Administration and Chief Financial Officer, as well as the other members of our senior management and our scientific and technical personnel. Given that the pool of individuals with relevant experience in biotechnology and diagnostic products in particular is limited, it would be costly and time-consuming to replace any of our senior management or scientific personnel. Although we maintain key-person life insurance on Mr. Erickson and Dr. Terstappen, we do not maintain key-person life insurance on any of our other officers, employees or consultants. We also depend on our scientific collaborators and other advisors, particularly with respect to our research and development efforts. If we lose the services of one or more of our key officers, employees or consultants, or are unable to retain the services of our scientific collaborators and other advisors, our research and development and product development efforts could be delayed or curtailed.

If Veridex and the other third parties we intend to rely on to perform marketing, sales and distribution services for our products do not successfully perform these services, our business will be harmed.

We have limited marketing, sales and distribution experience and capabilities. In order to commercialize any of our products, we must either internally develop sales, marketing and distribution capabilities or make arrangements with third parties to perform these services. We intend to rely for the foreseeable future on sales, marketing and distribution arrangements with third parties for the commercialization of our products. Specifically, we will rely on Veridex for the commercialization of the initial cancer diagnostic products based on our technologies. We may be unable to enter into sales, marketing and distribution agreements with third parties on acceptable terms, if at all. Also, the sales, marketing, and distribution efforts of these third parties might not be successful. Any sales through these third parties might be less profitable to us than direct sales.

If we decide to perform any sales, marketing and distribution functions ourselves, we might face a number of risks, including:

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our ability to attract and build the significant and skilled marketing staff or sales force necessary to commercialize and gain market acceptance for our products;

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the amount of time and cost of establishing a marketing staff or sales force might not be justifiable by the revenues generated by any particular product; and

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the failure of our direct sales and marketing personnel to initiate and execute successful commercialization activities.

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If the limited number of suppliers we rely on fail to supply the raw materials we use in the manufacturing of our reagent products, we might be unable to satisfy product demand, which would negatively impact our business.

Several raw materials used in the manufacturing of our reagent products used in several of our platforms and instruments currently are available only from a limited number of suppliers. We acquire all of these raw materials on a purchase-order basis, which means that the supplier is not required to supply us with specified quantities of these raw materials over a certain period of time or to set aside part of its inventory for our forecasted requirements. Additionally, for certain of these raw materials, we have not arranged for alternative suppliers, and it might be difficult to find alternative suppliers in a timely manner and on terms acceptable to us. Consequently, as we begin our commercialization efforts, if we do not forecast properly, or if our suppliers are unable or unwilling to supply us in sufficient quantities or on commercially acceptable terms, we might not have access to sufficient quantities of these raw materials on a timely basis and might not be able to satisfy product demand.

In addition, if any of these components and raw materials are no longer available in the marketplace, we will be forced to further develop our technologies to incorporate alternate components and to do so in compliance with QSR. If we incorporate new components or raw materials into our products we might need to seek and obtain additional approvals or clearances from the FDA or foreign regulatory agencies, which could delay the commercialization of these products.

If our competitors develop and market technologies or research and diagnostic products faster than we or Veridex do or if those products are more effective than our products, our commercial opportunities will be reduced or eliminated.

The extent to which any of our technologies and products achieve market acceptance will depend on many competitive factors, many of which are beyond our control. Competition in the pharmaceutical and biotechnology industries, and the medical devices and diagnostic products segments in particular, is intense and has been accentuated by the rapid pace of technological development. Our competitors include large diagnostics and life sciences companies. Most of these entities have substantially greater research and development capabilities and financial, scientific, manufacturing, marketing, sales and service resources than we do. Some of them also have more experience than we do in research and development, clinical trials, regulatory matters, manufacturing, marketing and sales. These organizations also compete with us to:

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pursue acquisitions, joint ventures or other collaborations;

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license proprietary technologies that are competitive with our technologies;

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attract funding; and

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attract and hire scientific talent.

If we or Veridex cannot successfully compete with new or existing products or technologies, sales of our products will suffer and we may never achieve profitability. Because of their greater experience with commercializing their technologies and larger research and development capabilities, our competitors might succeed in developing and commercializing technologies or products earlier and obtaining regulatory approvals and clearances from the FDA more rapidly than Veridex or us. Our competitors also might develop more effective technologies or products that are more predictive, more highly automated or more cost-effective, which may render our technologies or products obsolete or non-competitive.

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If we experience delays in the development of new products or delays in planned improvements to our products, our commercial opportunities will be reduced.

To improve our competitive position, we believe that we will need to develop new products as well as improve our existing instruments, reagents and ancillary products. Improvements in automation and throughput (the number of tests that can be performed in a specified period of time) of our products will be important to the competitive position of our products as we market to a broader, perhaps less technically proficient, group of customers. Our ability to develop new products and make improvements in our products may face difficult technological challenges leading to development delays. For example, we are experiencing delays in connection with the development of our CellTracks Analyzer cell analysis instrument for use in cancer diagnostic testing. These delays are the result of technical problems associated with reliability of the system to detect cancer cells. In response, we are implementing enhancements to our CellSpotter Analyzer, such as adding the ability to detect and evaluate cellular markers using analyte specific reagents, or ASRs. We are also continuing to develop our CellTracks Analyzer because we believe that some of the planned features, such as the ability to quantify cellular markers using ASRs, may be required to address future potential research and clinical applications and to remain competitive. If we are unable to successfully complete development of new products or if we are unable to successfully complete the planned enhancements to our products, in each case without significant delays, our future competitive position may be adversely affected.

If product liability lawsuits are successfully brought against us, we might incur substantial liabilities and could be required to limit the commercialization of our products.

Our business exposes us to potential product liability risks that are inherent in the testing, manufacturing, marketing and sale of diagnostic products. We might be unable to avoid product liability claims. Product liability insurance generally is expensive for our industry. If we are unable to maintain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims, we may be unable to commercialize our products. A successful product liability claim brought against us in excess of any insurance coverage we have at that time could cause us to incur substantial liabilities and our business to fail.

If we use biological and hazardous materials in a manner that causes injury, we could be liable for damages.

Our research and development activities sometimes involve the controlled use of potentially harmful biological materials, hazardous materials, chemicals and various radioactive compounds. We cannot completely eliminate the risk of accidental contamination or injury to third parties from the use, storage, handling or disposal of these materials. In the event of contamination or injury, we could be held liable for any resulting damages, and any liability could exceed our resources or any applicable insurance coverage we may have. Additionally, we are subject on an ongoing basis to federal, state and local laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. The cost of compliance with these laws and regulations might be significant and could negatively affect our profitability.

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If we are unable to manage growth in connection with our transition from an early-stage development company to a company that commercializes research and diagnostic products, our operations will suffer.

We will need to add a significant number of new personnel and expand our capabilities in order to successfully pursue our commercialization strategy for our initial IVD products as well as our research and development efforts. Certain aspects of our operations must be scaled up, for example, to increase the batch sizes of antibodies and other bulk components that we will need to provide for use in the test kits manufactured by Veridex and the number of instrument systems we can manufacture per quarter. Organizational growth and scale-up of operations could strain our existing managerial, operational, financial and other resources. If we fail to manage this growth effectively, we may not be able to achieve our research and development and commercialization goals.

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RISKS RELATED TO OUR INTELLECTUAL PROPERTY

If we are unable to protect our proprietary rights, we may not be able to compete effectively.

We have obtained patents in the US and in foreign countries relating to many of the technologies that are the basis of our products, such as the basic technologies relating to the separation and isolation of cells for the detection of cancer and the various aspects of the reagents, methods and instrument platforms that we plan to commercialize. In addition, we maintain trade secrets, especially where we believe patent protection is not appropriate or obtainable, on various aspects of our technologies and that we do not wish to become publicly known. However, obtaining, defending and enforcing our patents and other intellectual property rights involve complex legal and factual questions. For example, many of our key patents relating to our basic technologies for the separation and isolation of cells for the detection of cancer contain claims covering our processes for manufacturing and using our magnetic separation particles, or ferrofluids. If a competitor were to practice or use these processes without our knowledge or consent, these patents may be particularly difficult to defend or enforce because it may not be apparent from examination of the competitor's products that the competitor is using our patented processes. In particular, if we were not able successfully to defend or enforce our patents that cover our ferrofluids, which are utilized as a key component of our CellTracks AutoPrep System, competitors could more easily produce systems that might be able to perform separation of CTCs from blood samples in a manner substantially equivalent to our CellTracks AutoPrep System without compensating us, resulting in substantial damage to our business.

Because the issuance of a patent is not conclusive of its validity or enforceability and can be challenged, we do not know how much protection, if any, our patents will provide to us if we attempt to enforce them or if others challenge their validity or enforceability in court. For example, if our patents relating to the separation of CTCs from blood samples were challenged and invalidated, we would not be able to prevent others from utilizing these key aspects of our technologies, which would substantially harm our business. Moreover, our patent applications may not result in issued patents, and even if issued, our patents may not contain claims that are sufficiently broad to prevent others from practicing our technologies or developing competing products. Accordingly, we cannot assure you that we will be able to obtain, defend or enforce our patent rights covering our technologies in the US or in foreign countries. In addition, if others discover or misappropriate the technologies that we have chosen to maintain as trade secrets, we may not be able to effectively maintain our technologies as unpatented trade secrets. Although we have taken measures to protect our unpatented trade secrets and other non-public information such as know-how, including the use of confidentiality and invention assignment agreements with our employees, consultants and some of our contractors, it is possible that these persons may unintentionally or willingly breach the agreements or that our competitors may independently develop or otherwise discover our trade secrets and know-how.

A challenge to one or more of our pending patent applications, or issued patents, may result in limiting the coverage of our patents so that a competitor can effectively avoid our patent claims. In addition, competitors may avoid our patents by using technologies that perform substantially as our technologies, but avoid infringing our patent claims. For example, if a competitor were to use a cell separation technology that performs as well, or nearly as well, as our patented ferrofluids, the competitor may be able to market products that may be functionally equivalent and perform as well or nearly as well as our products, thereby diminishing the competitive advantage afforded by our issued patents.

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Although we may initiate litigation to stop the infringement of our patent claims or to attempt to force an unauthorized user of our patented inventions or trade secrets to compensate us for the infringement or unauthorized use, patent and trade secret litigation is complex and often difficult and expensive, and would consume the time of our management and other significant resources. If the outcome of litigation is adverse to us, third parties may be able to use our technologies without payments to us. Moreover, some of our competitors may be better able to sustain the costs of litigation because they have substantially greater resources. Because of these factors relating to litigation, we may be unable effectively to prevent misappropriation of our patent and other proprietary rights.

If the use of our technologies conflicts with the intellectual property rights of third-parties, we may incur substantial liabilities and we may be unable to commercialize products based on these technologies in a profitable manner, if at all.

Our competitors or others may have or acquire patent rights that they could enforce against us. If they do so, we may be required to alter our technologies, pay licensing fees or cease activities. If our technologies conflict with patent rights of others, third parties could bring legal action against us or our licensees, suppliers, customers or collaborators, claiming damages and seeking to enjoin manufacturing and marketing of the affected products. If these legal actions are successful, in addition to any potential liability for damages, we might have to obtain a license in order to continue to manufacture or market the affected products. A required license under the related patent may not be available on acceptable terms, if at all.

We may be unaware of issued patents that our technologies infringe. Because patent applications can take many years to issue, there may be currently pending applications, unknown to us, that may later result in issued patents upon which our technologies may infringe. There could also be existing patents of which we are unaware upon which our technologies may infringe. In addition, if third parties file patent applications or obtain patents claiming technology also claimed by us in pending applications, we may have to participate in interference proceedings in the US Patent and Trademark Office to determine priority of invention. If third parties file oppositions in foreign countries, we may also have to participate in opposition proceedings in foreign tribunals to defend the patentability of the filed foreign patent applications. We may have to participate in interference proceedings involving our issued patents or our pending applications.

If a third party claims that we infringe upon its proprietary rights, any of the following may occur:

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we may become involved in time-consuming and expensive litigation, even if the claim is without merit;

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we may become liable for substantial damages for past infringement if a court decides that our technologies infringe upon a competitor's patent;

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a court may prohibit us from selling or licensing our product without a license from the patent holder, which may not be available on commercially acceptable terms, if at all, or which may require us to pay substantial royalties or grant cross licenses to our patents; and

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we may have to redesign our product so that it does not infringe upon others' patent rights, which may not be possible or could require substantial funds or time.

If any of these events occurs, our business will suffer and the market price of our common stock will likely decline.

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Our rights to use technologies licensed to us by third parties are not within our control, and we may not be able to implement our products without these technologies.

We have licensed patents and other rights that are necessary to commercialize our products. Our business will significantly suffer if these licenses terminate, if the licensors fail to abide by the terms of the license or fail to prevent infringement by third parties or if the licensed patents or other rights are found to be invalid.

We have exclusively in-licensed significant intellectual property, including patents and know-how, related to our cell analysis instrumentation and cell isolation and enrichment products. In April 1997 we entered into a license agreement with the University of Twente, or Twente, under which we were granted exclusive rights to technology developed at Twente relating to optical analysis of particles similar to cells and cell particles. This technology and the underlying patents and know-how contribute significantly to our CellTracks Analyzer. This agreement will terminate upon the later of April 2007 or the expiration date of the last to expire of the patents licensed under this agreement. In addition, Twente may unilaterally terminate this agreement if we are in material breach or if we become bankrupt or insolvent. Twente also may unilaterally terminate the license granted under this agreement if we do not maintain sufficient general and product liability insurance coverage once we have begun clinical trials and commercialization of our products. In addition, in June 1999, we entered into a license agreement with the University of Texas, or Texas, under which we were granted exclusive rights to technology, including patents and know-how, which we developed in collaboration with Texas, relating to the isolation, enrichment and characterization of circulating epithelial cells. Epithelial cells are cells that cover external and internal body surfaces and give rise to the majority of solid tumors. This technology and the underlying patents and know-how contribute significantly to our cell analysis products in the field of cancer diagnostics. We are responsible for making royalty payments of 1% of our sales of reagents incorporating the intellectual property licensed to us under this agreement. This agreement terminates when all of Texas's rights to the licensed technologies expire. In addition, Texas also may unilaterally terminate this agreement if we are in material breach or become bankrupt or insolvent. Texas also may unilaterally terminate the license granted under this agreement, or the exclusivity of such license, in any national political jurisdiction if we fail to provide written evidence satisfactory to Texas, within 90 days of receiving written notice from Texas that it intends to terminate this license, that we or our sublicensees have commercialized or are actively attempting to commercialize a licensed invention in these jurisdictions. In addition, in July 2002, we entered into a license agreement with Streck Laboratories, Inc., or Streck. Under this agreement, Streck granted to us a non-exclusive, worldwide, royalty-bearing license to practice certain of Streck's cell preservative technology, including patents and know-how, for the research, development, manufacture and sale of our CellSave Preservative Tube to test for the presence of epithelial cells or CTCs in a sample of fluid from a patient. This agreement will terminate upon the expiration date of the last to expire of the patents licensed under this agreement. In addition, either party also may terminate this agreement if the other party is in material breach or becomes involved in financial difficulties, including bankruptcy and insolvency.

If we violate the terms of our licenses, or otherwise lose our rights to these patents or patent applications, we may be unable to continue development of our products. Our licensors or others may dispute the scope of our rights under any of these licenses. Additionally, the licensors under these licenses might breach the terms of their respective agreements or fail to prevent infringement of the licensed patents by third parties. Loss of any of these licenses for any reason could materiall