As filed with the Securities and Exchange Commission on August 7, 2006

Registration No. 333-            

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

XTENT, INC.
(Exact name of Registrant as specified in its charter)

125 Constitution Drive
Menlo Park, California 94025-1118
(650) 475-9400
(Address, including zip code and telephone number, including area code, of Registrant's principal executive offices)

Gregory D. Casciaro
President, Chief Executive Officer and Director
XTENT, Inc.
125 Constitution Drive
Menlo Park, California 94025-1118
(650) 475-9400
(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 the effective date of this Registration Statement.

        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. o

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

        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. o

        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. o

CALCULATION OF REGISTRATION FEE

(1)

In accordance with Rule 457(o) under the Securities Act of 1933, the number of shares being registered and the proposed maximum offering price per share are not included in this table.

(2)

Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

        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 the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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

Subject to completion, dated August 7, 2006

                Shares

XTENT, INC.

Common Stock

$             per share

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XTENT, Inc. is offering              shares of common stock.

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We anticipate that the initial public offering price will be between $             and $             per share.

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This is our initial public offering and no public market currently exists for our shares.

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Proposed trading symbol:
NASDAQ Global Market — XTNT.

This investment involves risk. See "Risk Factors" beginning on page 9.

The underwriters have a 30-day option to purchase up to                   additional shares of common stock from us to cover over-allotments, if any.

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

The date of this prospectus is                           , 2006.

TABLE OF CONTENTS

You should rely only on the information contained in this prospectus and any free writing prospectus that we authorize to be delivered to you. We have not, and the underwriters have not, authorized any other person to provide you with different information. Neither this prospectus nor any related free writing prospectus is an offer to sell, nor are they seeking an offer to buy, these securities in any state where the offer or solicitation is not permitted. The information in this prospectus is complete and accurate as of the date on the front cover of this prospectus, but the information may have changed since that date.

SUMMARY

The items in the following summary are described in more detail later in this prospectus. This summary does not contain all the information you should consider before investing in our common stock. You should carefully read the more detailed information set out in this prospectus, especially the risks of investing in our common stock that we discuss under the "Risk Factors" section, as well as the financial statements and the related notes to those statements included elsewhere in this prospectus. References in this prospectus to "we," "us," "our," "company" and "XTENT" refer to XTENT, Inc. unless the context requires otherwise.

Overview

We are a development stage medical device company focused on developing and commercializing our innovative customizable drug eluting stent systems for the treatment of coronary artery disease, or CAD. Our drug eluting stent systems are designed to enable physicians to customize both length and diameter of the stent at the site of the diseased section of the artery, or lesion, which we refer to as in-situ customization. Our products are designed to treat longer lesions than currently available drug eluting stents and multiple lesions with the use of a single device. Our stent systems, the Custom NX 36 and the Custom NX 60, incorporate a modular cobalt chromium stent design as well as a proprietary delivery system. In addition, our stents have a drug coating that is made up of Biolimus A9, an anti-inflammatory drug, and PolyLactic Acid, a biodegradable polymer, which in combination are intended to reduce the incidence of restenosis, or renarrowing of the previously treated artery over time. We believe our technology, if approved by regulatory authorities will enable us to compete in the approximately $5.3 billion worldwide drug eluting stent market.

We are developing 36mm and 60mm stent systems based on our proprietary technology platform. Our stent design is modular in that it consists of multiple 6mm segments in which the ends of each segment interleave with the ends of the adjacent segments, or are interdigitated. This interdigitated, modular stent design allows the physician to customize the stent length and deploy the necessary stent segments in the artery in-situ. Our delivery system incorporates a protective sheath and a proprietary mechanism to control the number of stent segments deployed. Our first two stent systems in development are the Custom NX 36 and the Custom NX 60. We believe that these two systems will enable physicians to provide a therapeutic solution for the majority of CAD patients treated with currently marketed drug eluting stents. Our Custom NX 36 is customizable in length and designed to treat single lesions. Our Custom NX 60 is designed to give physicians a suitable length stent to treat one long lesion or multiple smaller lesions with the use of one device, reducing the need for multiple catheter exchanges and related device costs. We believe that the ability to customize our stent and potentially treat multiple lesions and long lesions with one device may improve procedural efficacy and efficiency and lower costs.

Our Custom NX DES Systems are combination devices, including a stent and the drug coating, for which we must receive regulatory approval as a medical device before we can market our systems. We are conducting clinical trials to evaluate our Custom NX 36 and Custom NX 60 stent and stent delivery systems. In May 2006, the eight month clinical data from our CUSTOM I clinical trial was presented at the 2006 Paris Course on Revascularization conference. We believe the data from this clinical trial provided preliminary evidence of safety and efficacy and supports further development of our in-situ customization approach. We are currently enrolling and conducting our CUSTOM II and initiating our CUSTOM III clinical trials, which are designed to further evaluate the safety and efficacy of in-situ customization with our stents, particularly in long lesions and multiple lesions. Assuming the results from these trials are favorable, we believe that the data from our CUSTOM I, II and III clinical trials will be sufficient to support our submission to our designated Notified Body in the European

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Union for CE Mark. We expect to submit our application for CE Mark by early 2007. We will need premarket approval, or PMA, from the U.S. Food and Drug Administration, or FDA, before we can market our products in the United States, which we expect will require data from large clinical trials of up to 2,000 patients. To initiate these clinical trials, we must first obtain clearance of an investigational device exemption, or IDE, from the FDA. We anticipate applying for our IDE in 2007 based on the results from our CUSTOM I, II and III clinical trials.

We license our drug coating from Occam International, B.V., or Occam, a wholly-owned subsidiary of Biosensors International Group, Ltd., which together with Occam and each of their affiliated companies, are referred to as Biosensors in this prospectus. The regulatory approval of our products is dependent upon Biosensors submitting an adequate drug master file, or DMF, for the drug coating with its designated Notified Body or the relevant regulatory authority in the European Union and with the FDA in the United States.

Market Opportunity

Coronary artery disease, or CAD, is the most common form of cardiovascular disease and the number one cause of death in the United States and Europe. CAD is primarily caused by the accumulation of fat-laden cells, also known as plaque, in the arteries leading to the heart. Over time, the accumulation of plaque in an artery, known as a lesion, narrows the diameter of its lumen, or inner channel, and may significantly reduce or stop blood flow. A reduction in blood flow to the heart can cause chest pain, a heart attack or potentially death. CAD accounts for over 650,000 deaths annually, and according to the American Heart Association, affects over 13 million Americans. Risk factors for CAD include old age, smoking, diabetes, obesity, sedentary lifestyle and an individual's genetic history.

Evolution of Treatments for Coronary Artery Disease

A number of surgical procedures and interventional therapies have been developed over the past four decades to treat CAD, each with the goal of quickly and safely restoring blood flow. The treatment of CAD has experienced significant innovation and has evolved from invasive coronary artery bypass graft surgery to percutaneous coronary interventions, or PCIs, such as balloon angioplasty and coronary stenting. The most recent PCI innovation was the development of drug eluting stents. Currently marketed drug eluting stents are conventional bare metal stents that are coated with a drug that is designed to reduce restenosis. The development of drug eluting stents has resulted in a rapid shift in physician treatment of CAD and drug eluting stents are used in approximately 89% of the stent procedures in the United States. According to Millennium Research Group, in 2005, drug eluting stents were used in 1.5 million of the 2.2 million coronary stent procedures performed worldwide.

Evolution of Delivery Methods for Percutaneous Coronary Interventions

In addition to the advancements in therapies, the method of delivering these therapies has also improved over time. These improvements have made PCI procedures easier to perform for physicians and have reduced the amount of time for a single procedure.

The most recent innovation in the delivery of therapies was the development of rapid exchange delivery systems, which allow the procedure to be performed by a single operator. Rapid exchange systems are used in the majority of PCI procedures today. According to Millennium Research Group, in 2005, 70% of the drug eluting stents used in the United States were delivered with a rapid exchange system. Despite improving procedural efficiency, rapid exchange systems still require time consuming catheter exchanges when multiple devices are needed for a single procedure.

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Limitations of Current Percutaneous Coronary Intervention Therapies

Although significant advances have been made with drug eluting stents, we believe the designs of current stents and methods of delivery limit effectiveness for patients and efficiency of the physicians treating CAD and can result in increased costs for healthcare providers. Current commercially available stent systems include stents with fixed-lengths of up to 33mm, and require a separate device for each stent used. Fixed-length stent systems require physicians to estimate the size and shape of the artery's lumen, and then use their judgment to select the proper length and diameter stent for the lesion. The characteristics of existing technology lead to the following limitations:

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Inability to customize treatment options in-situ;



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Multiple catheter exchanges required to treat one or multiple lesions;



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Overlapping of stents to cover long lesions;



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Inaccurate placement of stents;



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Alteration of the artery anatomy; and



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Required physician planning and inventories.

We believe that while current stent systems can provide effective therapy for patients, there is a significant opportunity for improvement in efficacy, efficiency and cost due to the limitations described above.

The XTENT Solution

Our customizable drug eluting stent systems are designed to enable the treatment of single lesions, long lesions and multiple lesions of varying lengths and diameters, in one or more arteries with a single device. We believe our Custom NX DES Systems' ability to customize therapy without the need to exchange catheters may enable physicians to treat patients more effectively and efficiently. We believe that the potential benefits provided by our technology include the following:

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In-Situ Customization. Our Custom NX DES Systems are designed to allow physicians to determine the appropriate length of stent for the patient while inside the artery at the site of the lesion, or in-situ.



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Treatment of Multiple Lesions With a Single Device. Our Custom NX DES Systems are comprised of multiple segments that are interdigitated. The physician can distribute the stent segments across multiple lesions in a customized manner in increments of 6mm.



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Treatment of Long Lesions Without Multiple Overlapping Stents. Our Custom NX DES Systems are designed to be able to effectively treat longer sections of diseased artery as compared with current fixed-length alternatives. Physicians can place up to 60mm of stent to treat a single long lesion.



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Improved Stent Placement Accuracy. We believe the ability to customize the length of the stent while in the patient's artery may reduce the incidence of geographic miss and the resulting problems of blood clot formation, or thrombosis and the need for reinterventions.

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Increased Stent Flexibility and Deliverability. Our stents incorporate a modular design consisting of multiple individual segments, which we believe provides increased stent flexibility. We believe our stent's increased flexibility may allow an artery to better maintain its natural shape and curvature as well as move and flex with the contractions of the heart.



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Biodegradable Polymer as Our Drug Carrier. Our drug coating is biodegradable, leaving behind a thin permanent primer that we believe has an insignificant physiological response when used in the body. We believe the biodegradability of our drug coating may reduce the potential for late-stent thrombosis, or the occurrence of thrombosis 30 or more days after the procedure, that may be associated with durable polymers.

Our Strategy

Our goal is to become the world leader in the development and commercialization of drug eluting stent systems that will significantly improve the treatment of arterial disease. To achieve this goal, we are pursuing the following business strategies:

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Demonstrate the clinical safety and efficacy and gain regulatory approval of our products;



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Commercialize and drive adoption of our Custom NX DES Systems;



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Build awareness and support among leading physicians;



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Leverage our technology platform into other indications;



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Expand and strengthen our intellectual property position; and



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Provide the highest quality products for our customers.

Risks Associated With Our Business

Our business is subject to numerous risks, as discussed more fully in the section entitled "Risk Factors" following this prospectus summary. We have a limited operating history and may be unable to accurately predict our future performance. We do not have any approved products for sale in any jurisdiction and as a result, have not generated revenue to date. As of March 31, 2006, we had an accumulated deficit of $33.1 million and we may never achieve profitability.

We may be unable, for many reasons, including those that are beyond our control, to implement our current business strategy. We rely on a third party over which we have little or no control, Biosensors, for the supply of the drug coating we use on our stents and for submitting regulatory documentation to regulatory authorities for the use of this drug coating on stents. In order to demonstrate the safety and efficacy of our products we will likely need to conduct expensive clinical trials involving large patient populations comparing our stents to other currently established drug eluting stents. There can be no assurance that the results of these clinical trials will demonstrate the safety and efficacy of our products. Our success also depends on our ability to effectively design, develop, maintain and prosecute adequate intellectual property coverage, obtain regulatory approvals for, and commercialize, our products. We will depend on the adoption of our products by physicians to generate revenue from the sales of our products. We will compete with large multinational competitors who already have their own drug eluting stents on the market and who have more experience and resources in manufacturing, sales and marketing, and research and development than we do.

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Corporate Information

We were incorporated in Delaware in June 2002. Our offices are located at 125 Constitution Drive, Menlo Park, California 94025-1118, and our telephone number is (650) 475-9400. Our website is located at www.xtentinc.com. The information found on, or accessible through, our website is not a part of this prospectus.

XTENT® is a registered trademark of our company in the United States, the European Union and Australia. Applications for our XTENT™ trademark are pending in Canada and Japan. CUSTOM NX® is a registered trademark of our company in Australia, the European Union and Japan. Applications for our CUSTOM NX™ trademark are pending in the United States and Canada. We have also applied to register NX™ as a trademark in the United States.

All other trademarks, tradenames and service marks appearing in this prospectus are the property of their respective owners.

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The Offering

The number of shares of common stock that will be outstanding after this offering is based on 29,198,041 shares outstanding as of March 31, 2006, and excludes:

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2,058,865 shares of common stock issuable upon exercise of all outstanding options under our 2002 Stock Plan at a weighted-average exercise price of $0.29 per share;



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34,688 shares of common stock issuable upon exercise of all outstanding stand-alone options at a weighted-average exercise price of $0.17 per share;



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1,181,312 shares of common stock reserved for future grant or issuance under our 2002 Stock Plan;



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1,250,000 shares of common stock reserved for future grant or issuance under our 2006 Equity Incentive Plan and our 2006 Employee Stock Purchase Plan;



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automatic annual increases in the number of shares of common stock reserved for issuance under our 2006 Equity Incentive Plan and 2006 Employee Stock Purchase Plan; and



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6,741,545 shares of convertible preferred stock sold in our Series D convertible preferred stock financing in May and June of 2006.

Except as otherwise noted, all information in this prospectus assumes:

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a       for        reverse split of the shares of our common stock on or before the closing of this offering, which will be reflected in an amendment to this prospectus;



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no exercise of the underwriters' over-allotment option;



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the conversion of all outstanding shares of our convertible preferred stock into 22,746,906 shares of our common stock upon the closing of this offering; and



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the filing of our amended and restated certificate of incorporation, which will occur immediately prior to the completion of this offering.

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Summary Financial Data

The following table presents summary historical and unaudited pro forma as adjusted financial data. We derived the summary statements of operations data for the years ended December 31, 2003, 2004 and 2005 from our audited financial statements that are included elsewhere in this prospectus. We derived the summary statements of operations data for the period from June 13, 2002 (Inception) to December 31, 2002 from our audited financial statements that do not appear in this prospectus. We derived the summary statements of operations data for the cumulative period from June 13, 2002 (Inception) to March 31, 2006 and the three months ended March 31, 2005 and March 31, 2006 and the balance sheet data as of March 31, 2006 from our unaudited financial statements that are included elsewhere in this prospectus. We have prepared this unaudited information on the same basis as the audited financial statements and have included all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair statement of our financial position and operating results for such period. Our historic results are not necessarily indicative of the results that may be expected in the future. You should read this data together with our financial statements and related notes included elsewhere in this prospectus and the information under "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

⁽¹⁾  See Note 2 of the notes to our financial statements for a description of the method used to compute basic and diluted net loss per share attributable to common stockholders and pro forma basic and diluted net loss per share.

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⁽¹⁾  On a pro forma as adjusted basis to give effect to the conversion of all outstanding shares of redeemable convertible preferred stock into common stock upon the closing of this offering and to reflect the sale of                           shares of our common stock in this offering at the assumed initial public offering price of $             per share, the midpoint of the range on the front cover of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. A $1.00 increase or decrease in the assumed initial public offering price of $             per share would increase or decrease, respectively, cash and cash equivalents, working capital, total assets and total stockholders equity by approximately $              million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this prospectus, before deciding whether to invest in shares of our common stock. If any of the following risks actually occur, our business, financial condition and results of operations would suffer. In that case, the trading price of our common stock would likely decline and you might lose all or part of your investment in our common stock. The risks described below are not the only ones we face. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our operations and business results.

Risks Related to Our Business

We are a development stage company with a history of losses, and we expect to incur net losses for the foreseeable future.

We have incurred net losses since our inception in June 2002. For the years ended December 31, 2003, 2004 and 2005, and for the three months ended March 31, 2006, we had net losses of $4.0 million, $8.9 million, $14.0 million and $4.1 million, respectively. Through March 31, 2006, we had an accumulated deficit of $33.1 million. To date, we have financed our operations primarily through private placements of our equity securities and have devoted substantially all of our resources to research and development of our Custom NX DES Systems, which consist of the Custom NX 36 and the Custom NX 60. Since we have not received a CE Mark or approval from the U.S. Food and Drug Administration, or FDA, or any other regulatory authority for our products, we are unable to market our current products and have not generated any revenue since our inception. We expect our research and development expenses to increase significantly in connection with our clinical trials and other product development activities. If we receive CE Mark or FDA approval of our Custom NX DES Systems, we expect to incur significant sales and marketing expenses and manufacturing expenses as we commercialize our products. Additionally, following this offering, we expect that our general and administrative expenses will increase due to the additional operational and reporting costs associated with being a public company. As a result, we expect to continue to incur significant and increasing operating losses for the foreseeable future. These losses will continue to have an adverse effect on our stockholders equity.

We currently do not have, and may never have, any products available for sale and our efforts to obtain product approvals and commercialize our products may not succeed or may result in delays for many reasons.

We are a development stage medical device company with a limited history of operations and we currently do not have any products available for sale or other sources of revenue. Our ability to generate revenue depends entirely upon the successful clinical development, regulatory approval and commercialization of our Custom NX DES Systems. Our products under development and any other products that we develop will require extensive additional clinical testing, regulatory approval and significant marketing efforts before they can be sold and generate any revenue. Our efforts to commercialize our products may not succeed for a number of reasons including:

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our products may not demonstrate safety and efficacy in our clinical trials;



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we are wholly dependent on the efforts undertaken by the supplier of the drug coating for our products, and may be significantly impacted by any regulatory delays or barriers that our supplier may encounter in submitting an adequate or acceptable drug master file, or DMF, for the drug coating to the regulatory authorities;

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we may not be able to obtain regulatory approvals for our products, or the approved indications for our products may be narrower than we seek;



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we may experience delays in our development program, including initiation and completion of our clinical trials;



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any products that are approved may not be accepted in the marketplace by physicians and patients;



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physicians may not receive adequate coverage and reimbursement for procedures using our products;



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any rapid technological change may make our technology and products obsolete;



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we may not be able to manufacture our Custom NX DES Systems in commercial quantities or at an acceptable cost;



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we may not have adequate financial or other resources to complete the development and commercialization of our Custom NX DES Systems; and



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we may be sued for infringement of intellectual property rights and could be enjoined from manufacturing or selling our products.

We cannot market our products in the European Union until we receive a CE Mark or in the United States until we receive premarket approval, or PMA. We do not expect to be able to commercialize our products in the European Union until late 2007 at the earliest, if at all, or in the United States until the end of 2009, if at all. If we are not successful in the initiation and completion of clinical trials for the development, approval and commercialization of our Custom NX DES Systems for the treatment of coronary artery disease, or CAD, we may never generate any revenue and may be forced to cease operations.

We have not received, and may never receive, FDA or other regulatory approvals to market our Custom NX DES Systems.

In addition to the submission of a DMF, that is acceptable to regulatory authorities, by the supplier for the drug coating that we use on our products, which we intend to reference in the regulatory applications for our products, we must obtain regulatory approval to market our drug eluting stents. Our Custom NX DES Systems are combination products, incorporating both a drug element and a medical device, and the combination device will be regulated as a Class III medical device in the United States. The drug coating for our stents will be reviewed by the FDA's Center for Drug Evaluation and Research, or CDER, and the device will be reviewed by the FDA's Center for Devices and Radiological Health, or CDRH, with the overall product approved by CDRH as a medical device. We believe that no separate approval for the drug independent of the device is required.

We do not currently have the necessary regulatory approvals to market our Custom NX DES Systems or any other products in the United States or in any foreign market, including the European Union. If we obtain the necessary regulatory approvals, we plan initially to launch our products in the European Union and later in the United States. Regulatory approval in the European Union for our products will require us to successfully obtain CE Mark from a designated Notified Body, an independent third party appointed by regulatory authorities to conduct the requisite conformity assessment. The regulatory approval process in the United States for our products involves, among other things,

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successfully receiving authorization from the FDA to conduct clinical trials under an investigational device exemption, or IDE, completing pre-clinical and clinical trials, and compiling, submitting and obtaining PMA from the FDA. The PMA process requires us to demonstrate the safety and efficacy of our products to the FDA's satisfaction. This process is expensive and uncertain and requires detailed and comprehensive scientific and human clinical data. While the FDA review process generally takes one to three years after filing the PMA application, our PMA application review could take much longer and may never result in the FDA granting PMA. The FDA can delay, limit or deny approval of our PMA application for many reasons, including:

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our systems may not be safe or effective or may not otherwise meet the FDA's requirements;



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the data from our pre-clinical studies and clinical trials may be insufficient to support approval;



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the manufacturing process or facilities we or our suppliers use may not meet stringent regulatory requirements;



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the information provided by the supplier of the drug coating in its DMF may be inadequate; and



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changes in FDA approval policies or adoption of new regulations may require us to provide additional data.

We will also have to obtain similar, and in some cases more stringent, foreign regulatory approval in order to commercialize our products outside of the United States. Even if approved, our Custom NX DES Systems may not be approved for the indications that are necessary or desirable for successful commercialization. We may not obtain the necessary regulatory approvals to market our products in the European Union, United States or in other markets. Any delay in, or failure to receive or maintain, approval for our products could prevent us from generating revenue or achieving profitability.

We are wholly dependent on a third party for the development of the drug coating placed on our drug eluting stents and any delay or failure by such third party to adequately develop the drug coating by Biosensors or to submit an acceptable DMF to regulatory authorities could delay our clinical trials or prevent or delay commercialization of our Custom NX DES Systems.

In May 2004, we entered into a license agreement with Occam. Pursuant to the agreement, we obtained non-exclusive rights to use Occam's drug coating on our stent platform. The drug coating consists of Biolimus A9, an anti-inflammatory drug that is a derivative of rapamycin, and PolyLactic Acid, or PLA, a biodegradable polymer used to release the drug over time. The drug coating has not been approved for any use in the European Union, the United States or any other jurisdiction. In April 2005, Biosensors submitted its first module for the DMF with its designated Notified Body, the independent third party appointed by the relevant regulatory authorities to conduct the conformity assessment required to obtain CE Mark in the European Union, in conjunction with Biosensors' application for CE Mark of its BioMatrix drug eluting stent. Biosensors does not have any prior experience in developing or manufacturing drugs or obtaining regulatory approval for drugs or drugs used in combination with a medical device in any jurisdiction.

In May 2006, Biosensors publicly disclosed that while it had made prior projections on the expected date of approval for its BioMatrix drug eluting stent in the European Union, the granting of such approval is dependent on several factors, some of which are out of Biosensors' control and as such, they are unable to determine or predict with certainty when such approval will be granted. We have

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not been involved with, or had access to, any of Biosensors' filings with its designated Notified Body or the relevant regulatory authorities in the European Union. In the United States, we do not know what filings Biosensors has made with the FDA in connection with a DMF for the drug coating. If Biosensors experiences delays or problems in developing a DMF that we need to reference in our application for CE Mark in the European Union or our PMA application in the United States, our currently planned clinical trials and the development of our products may be substantially delayed and we may be required to restart clinical programs with an alternative drug coating.

If Occam fails to supply us with sufficient quantities of our drug coating, development and commercialization of our Custom NX DES Systems may be prevented or delayed as a result.

We obtain our entire supply of the drug coating for our stents from Biosensors and we are unaware of any alternative source for this drug coating. We do not have the right to use alternate suppliers for the drug coating that we obtain from Occam. In addition, there is no other source for the drug coating and we are contractually restricted from commercializing any of our products that incorporate a rapamycin drug or any derivative thereof or obtaining Biolimus A9 from any other source and we have not in-licensed an alternative drug for use in the event we are unable to obtain a sufficient supply of Biolimus A9. Currently, Biosensors relies on a sole-source, Nippon Kayaku, a third party Japanese pharmaceutical company, to manufacture and supply them with Biolimus A9, which Biosensors mixes with the PLA. We have no relationship with, control over, or contact with this pharmaceutical company and cannot contract directly with it to obtain Biolimus A9 if we are unable to obtain Biolimus A9 from Biosensors. In addition, the pharmaceutical company is subject to significant legal and regulatory requirements with regard to the production of Biolimus A9, including onerous current Good Manufacturing Practices regulations, or GMP, which are strictly enforced by the FDA, and the Ministry of Health, Labor, and Welfare in Japan and any failure on the part of the pharmaceutical company to comply with these requirements may interrupt Biosensors' supply of Biolimus A9 and ultimately, our supply of the drug coating. Biosensors has also entered into, and may continue to enter into, agreements to supply the drug coating to other licensees. Our clinical trials and the development and commercialization of our Custom NX DES Systems could be prevented or delayed:

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if the supplier of our drug coating is unable or refuses to meet our demand;



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if our license agreement with Occam terminates for any reason, including insolvency or our failure to obtain the CE Mark or commercialize our products before May 2008; or



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if the supplier of our drug coating does not meet regulatory quality requirements and other specifications.

To date, our drug coating requirements have been limited to small quantities that we need to conduct our development and pre-clinical and clinical trials. If we obtain market approval for our products, we anticipate that we will require substantially larger quantities of the drug coating. Occam may not provide us with sufficient quantities of the drug coating and such supply may not meet our quality requirements or other specifications. In the event we do not receive adequate supply of the drug coating, we will likely be unable to locate an alternative supplier of the drug coating, or any alternative drug, in a timely manner or on commercially reasonable terms, if at all. Any additional new source for Biolimus A9, the PLA or the drug coating will require the consent of Occam and prior FDA approval, which will require significant time and effort to obtain and there can be no assurance that we will obtain such regulatory approval. The inability to obtain sufficient quantities of the drug coating or any delay in obtaining such supply could delay our clinical trials or affect the commercialization of our Custom NX DES Systems, which could have a significant adverse affect on our future operations.

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We do not have long-term data regarding the safety and efficacy of our Custom NX DES Systems. Any long-term data that is generated may not be consistent with our limited short-term data, which could affect the regulatory approval of our products or the rate at which our products are adopted.

An important factor in our clinical trials, upon which the safety and efficacy of our Custom NX DES Systems may be measured, is the rate of restenosis, or the renarrowing of the treated artery over time. Another important factor that physicians and regulatory bodies may consider is the rate of reintervention, or retreatment, following the procedures using the Custom NX DES Systems. We believe that physicians and regulators will compare the rates of long-term restenosis and reintervention for our Custom NX DES Systems against other drug eluting stent procedures and other alternative procedures.

If, in our planned large-scale comparative pivotal clinical trial, we fail to demonstrate restenosis rates, as well as other clinical trial end-points and performance, comparable to other drug eluting stents that have been approved by the FDA, our ability to successfully market Custom NX DES Systems may be significantly limited. If the long-term rates of restenosis and reintervention do not meet regulators' or physicians' expectations, our Custom NX DES Systems may not receive regulatory approval or, if approved, may not become widely adopted and physicians may recommend that patients receive alternative drug eluting stents, such as the Cypher stent and the Taxus Express2 stent, the two drug eluting stents currently marketed in the United States. Additionally, other efficacy factors may influence a physician's decision over what stents to deploy. Our Custom NX DES Systems' stent segments may separate at the time of deployment in the artery or over time. Any such separation may lead to restenosis occurring between the segments or other adverse events. Another significant factor that physicians and regulators will consider is acute safety data on complications that occur with the use of our products. Two of the patients in the CUSTOM I clinical trial experienced elevated enzyme levels following the procedure, which are technically considered to be heart attacks. If the results obtained from our clinical trials indicate that our products are not as safe or effective as other treatment options or as current short-term data would suggest, our products may not be approved, adoption of our products may suffer and our business would be harmed.

If our pre-clinical studies or clinical trials do not meet safety or efficacy endpoints, or if we experience significant delays in completing these studies or trials, our ability to commercialize our Custom NX DES Systems or other products and our financial position will be impaired.

Before marketing and selling our Custom NX DES Systems or any other products, we must successfully complete pre-clinical studies and clinical trials that demonstrate that our products are safe and effective. We currently have a very limited amount of clinical data regarding the safety and efficacy of our Custom NX DES Systems, and not data beyond eight months. The results from our limited short-term clinical experience for our Custom NX DES Systems do no necessarily predict long-term clinical benefit and may not be replicated in subsequent clinical trials. Furthermore, all of our existing data has been produced in studies that involve relatively small patient groups, and the data may not be reproduced in wider patient populations. We plan to conduct additional large-scale clinical trials to determine whether our products are safe and effective and to support our applications for regulatory approval in the European Union and the United States. We expect that one or more of these additional clinical studies will be a comparative study comparing the safety and efficacy of our stents to the Cypher stent or the Taxus Express2 stent, the two drug eluting stents marketed in the United States, and that these studies will involve large patient populations.

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The commencement or completion of any of our clinical trials may be delayed or halted for numerous reasons, including, but not limited to, the following:

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Biosensors fails to submit in a timely fashion, if at all, its DMF for the drug coating with its designated Notified Body in the European Union or the FDA, or such filings fail to meet regulatory requirements;



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the FDA or other regulatory authorities do not approve our clinical trial protocols or our clinical trials, or suspend or place a clinical trial on hold;



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patients do not enroll in clinical trials at the rate we expect;



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third party clinical investigators do not conduct follow-up visits with patients or patients drop out of the clinical trial at rates we do not expect;



•

patients experience adverse events, which may or may not be related to our products;



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patients die during a clinical trial for a variety of reasons, including the advanced stage of their disease and medical problems, which may or may not be related to our products;



•

third party clinical investigators do not perform our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, good clinical practices or other regulatory requirements, or other third party organizations do not perform data collection and analysis in a timely or accurate manner;



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regulatory inspections of our clinical trials or manufacturing facilities, which may, among other things, require us to undertake corrective action or suspend or terminate our clinical trials if investigators find us or our suppliers not in compliance with regulatory requirements;



•

changes in governmental regulations or administrative actions;



•

the interim results of our clinical trials are inconclusive or negative; or



•

our clinical trial designs, although approved, are inadequate to demonstrate safety and/or efficacy.

Before we can commence our planned pivotal clinical trial in the United States for our Custom NX DES Systems, an IDE application must be submitted and approved by the FDA, which we currently anticipate submitting in 2007. Product development, including pre-clinical studies and clinical testing, is a long, expensive and uncertain process and is subject to delays. It may take us several years to complete our testing, if we complete it at all, and a clinical trial may fail at any stage. Furthermore, data obtained from any clinical trial may be inadequate to support a PMA application or any foreign regulatory applications. Additionally, pre-clinical and clinical data can also be interpreted in different ways, which could delay, limit or prevent regulatory approval for our products.

Clinical trials necessary to support a PMA application will be expensive and will require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.

Clinical trials necessary to support a PMA application for our Custom NX DES Systems will be expensive and will require the enrollment of large numbers of patients, and suitable patients may be

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difficult to identify and recruit. The clinical trials supporting the PMA applications for the Cypher stent and the Taxus Express2 stent, which are approved by the FDA and currently marketed, involved patient populations of approximately 1,000 and 1,300, respectively. We expect that the FDA may require us to enroll this number of patients or more to support our PMA application. Patient enrollment in clinical trials and completion of patient follow-up depend on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites and the eligibility criteria for the clinical trial and patient compliance. For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and efficacy of our products, or they may be persuaded to participate in contemporaneous clinical trials of competitive products. In addition, patients participating in our clinical trials may die before completion of the trial or suffer adverse medical events unrelated to our products. Delays in patient enrollment or failure of patients to continue to participate in a clinical trial may cause an increase in costs and delays or resu