we or the parties in our strategic collaborations fail to obtain or maintain necessary FDA clearances or approvals for our medical
device products, or if such clearances or approvals are delayed, we will be unable to continue to commercially distribute and
market our products.
products are medical devices that are subject to extensive regulation in the U.S. and in foreign countries where we do business.
Each medical device that we wish to market in the U.S. must be designated as exempt from premarket approval or notification, or
first receive either a 510(k) clearance, de novo approval, or a pre-market approval, or PMA, from the U.S. FDA pursuant to the
Federal Food, Drug, and Cosmetic Act, or FD&C Act. The FDA’s 510(k) clearance process usually takes from four to 12
months, but it can take longer. The process of obtaining PMA approval is much more costly, lengthy, and uncertain, generally taking
from one to three years or even longer. Although we have 510(k) clearance for many of our products, including disposable interventional
devices, and we are able to market these products commercially in the U.S., our business model relies significantly on revenue
from new disposable interventional devices, some of which may not achieve FDA clearance or approval. We cannot assure you that
any of our devices will not be required to undergo the lengthier and more burdensome PMA process. We cannot commercially market
any disposable interventional devices in the U.S. until the necessary clearances or approvals from the FDA have been received.
In addition, we are working with third parties to co-develop disposable products. In some cases, these companies are responsible
for obtaining appropriate regulatory clearance or approval to market these disposable devices. If these clearances or approvals
are not received or are substantially delayed or if we are not able to offer a sufficient array of approved disposable interventional
devices, we may not be able to successfully market our system to as many institutions as we currently expect, which could have
a material adverse impact on our financial condition, results of operations and cash flow.
obtaining 510(k) clearances, de novo approvals, PMAs or PMA supplement approvals, from the FDA could result in unexpected and
significant costs for us and consume management’s time and other resources. The FDA could ask us to supplement our submissions,
collect non-clinical data, conduct clinical trials or engage in other time-consuming actions, or it could simply deny our applications.
In addition, even if we obtain a 510(k) clearance, de novo approvals, or PMA or PMA supplement approval, the clearance or approval
could be revoked or other restrictions imposed if post-market data demonstrates safety issues or lack of effectiveness. We cannot
predict with certainty how, or when, the FDA will act on our marketing applications. If we are unable to obtain the necessary
regulatory approvals, our financial condition and cash flow may be adversely affected. Also, a failure to obtain approvals may
limit our ability to grow domestically and internationally.
our strategic collaborations elect not to or we fail to obtain regulatory approvals in other countries for products under development,
we will not be able to commercialize these products in those countries.
order to market our products outside of the U.S., we and our strategic collaborations or distributors must establish and comply
with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Approval procedures vary among
countries and can involve additional product testing and additional administrative review periods. The time required to obtain
approval in other countries might differ from that required to obtain FDA approval. The regulatory approval process in other countries
may include all of the risks detailed above regarding FDA approval in the U.S. Regulatory approval in one country does not ensure
regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the
regulatory process in others. Failure to obtain regulatory approval in other countries or any delay or setback in obtaining such
approval could have the same adverse effects described above regarding FDA approval in the U.S. In addition, we may rely on our
distributors and strategic collaborations, in some instances, to assist us in this regulatory approval process in countries outside
the U.S. and Europe, for example, in Japan.
may fail to comply with continuing regulatory requirements of the FDA and other authorities and become subject to enforcement
action, which may include substantial penalties.
after product clearance or approval, we must comply with continuing regulation by the FDA and other authorities, including the
FDA’s Quality System Regulation, or QSR, requirements, labeling and promotional requirements and medical device adverse
event and other reporting requirements. Any failure to comply with continuing regulation by the FDA or other authorities could
result in enforcement action that may include suspension or withdrawal of regulatory approvals, recalling products, ceasing product
manufacture and/or marketing, seizure and detention of products, paying significant fines and penalties, criminal prosecution
and similar actions that could limit product sales, delay product shipment and harm our profitability. Congress could amend the
FD&C Act, and the FDA could modify its regulations promulgated under this law or its policies in a way to make ongoing regulatory
compliance more burdensome and difficult.
any modification to an FDA 510(k) cleared or de novo-approved device that could significantly affect its safety or effectiveness,
or that would constitute a major change in its intended use, requires a new 510(k) clearance. Modifications to a PMA approved
device or its labeling may require either a new PMA or PMA supplement approval, which could be a costly and lengthy process. In
addition, if we are unable to obtain approval for key applications, we may face product market adoption barriers that we cannot
overcome. In the future, we may modify our products after they have received clearance or approval, and we may determine that
new clearance or approval is unnecessary. We cannot assure you that the FDA would agree with any of our decisions not to seek
new clearance or approval. If the FDA requires us to seek clearance or approval for any modification that we determined to not
require clearance or approval in the first instance, we could be subject to enforcement sanctions and we also may be required
to cease marketing or recall the modified product until we obtain FDA clearance or approval which could also limit product sales,
delay product shipment and harm our profitability.
many foreign countries in which we market our products, we are subject to regulations affecting, among other things, product standards,
packaging requirements, labeling requirements, import restrictions, tariff regulations, duties and tax requirements. Many of these
regulations are similar to those of the FDA or other U.S. regulations. In addition, in many countries the national health or social
security organizations require our products to be qualified before procedures performed using our products become eligible for
reimbursement. Failure to receive or delays in the receipt of, relevant foreign qualifications could have a material adverse effect
on our business, financial condition and results of operations. Due to the movement toward harmonization of standards in Europe,
we expect a changing regulatory environment characterized by a shift from a country-by-country regulatory system to a Europe-wide
single regulatory system. We cannot predict the timing of this harmonization and its effect on us. Adapting our business to changing
regulatory systems could have a material adverse effect on our business, financial condition, and results of operations. If we
fail to comply with applicable foreign regulatory requirements, we may be subject to fines, suspension, or withdrawal of regulatory
approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
addition, we are subject to the U.S. Foreign Corrupt Practices Act, anti-bribery, antitrust and anti-competition laws, and similar
laws in foreign countries. Any violation of these laws by our distributors or agents or by us could create a substantial liability
for us and also cause a loss of reputation in the market. From time to time, we may face audits or investigations by one or more
government agencies, compliance with which could be costly and time-consuming, and could divert our management and key personnel
from our business operations. An adverse outcome under any such investigation or audit could subject us to fines or other penalties,
which could adversely affect our business and financial results.