SurModics Inc (SRDX)

[Democritus_of_Abdera]

Re: SRDX & XTNT....

Bruce Barclay’s specific mention of XTENT’s CE Mark approval in the Apr 29 CC may foreshadow the beginning of a royalty stream for the Custom NX stent, but more likely is an acknowledgement of a praiseworthy achievement doomed by the difficult funding environment.

XTENT”s March 24th 10-K statement regarding the CE Mark approval was

In March 2009, we received CE Mark for our Custom NX DES Systems authorizing us to market our products in the European Union and certain other countries that recognize the CE Mark. Even though we have received CE Mark, we will not be able to commercialize our product in the European Union unless we obtain additional financing, or we consummate a strategic transaction that permits us to commercialize in Europe. We can provide no assurance that such a financing or strategic transaction will be available on terms agreeable to us, or at all.

Notable additional quotes from XTENT’s 10-K are

... we also depend on SurModics, which provides the slippery coating on our sheath. Our current agreement with SurModics, allows SurModics to terminate the agreement if we do not commercialize our product by July 1, 2009. We do not expect to commercialize our product by that date.....

To date, we have paid $140,000 in royalty payments to SurModics, and future commitments are shown in the table above, including an additional $20,000 milestone payment upon regulatory approval of our products.....

License Agreements

The Company has entered into license agreements with Biosensors and SurModics for proprietary materials that are critical to the success of the Company’s products. The terms of the agreements call for milestone payments prior to achieving sales, and quarterly royalty payments based on the greater of specified minimums or a percentage of net sales. As of December 31, 2008, future minimum royalty payments these suppliers are approximate $1.7 million, and minimum royalty payments during the years ended December 31, 2008, 2007 and 2006 were $80,000, $40,000 and $20,000, respectively. An additional $20,000 milestone payment is payable to SurModics upon achievement of certain milestones. Minimum royalty to Biosensors payments of $100,000 per year will begin upon achievement of certain milestones.

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http://www.sec.gov/Archives/edgar/data/1212235/000110465909019578/a09-1654_110k.htm