Please stand by. We are about to begin. Good day and welcome to the Xtent, Incorporated fourth quarter 2007 earnings results conference call. Today's conference is being recorded. With us today from the company are Greg Casciaro, President and Chief Executive Officer, and Tim Kahlenberg, Chief Financial Officer. At this time, I would like to turn the conference over to Mr. Tim Kahlenberg. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us today for our fourth quarter and year-end 2007 earnings call. I'm Tim Kahlenberg, Chief Financial Officer for Xtent. With me on today's call is Greg Casciaro, the company's President and Chief Executive Officer. Before I turn the call over to Greg, we'd like to remind you that our prepared remarks contain certain forward-looking statements defined under the Private Securities Litigation Reform Act of 1995. Specifically these statements include, but are not limited to those concerning expectations regarding the market size and the need for our technology, the performance of our stent and stent systems, and plans for certain improvements, the efficiency of treatment procedures, and the outcomes for treated patients, expectations for operating expenses, and plans for clinical trial enrollment, the timing of regulatory filings and approvals, and the commercialization of our stent systems. Factors that could cause Xtent's actual results to differ materially from these forward looking statements are described in the section entitled risk factors in our 10-Q, filed with the Securities and Exchange Commission on November 2, 2007. These forward-looking statements do not guarantee future performance, and therefore you should not rely on them in making an investment decision without considering the risks associated with such statements. Xtent also cautions you not to place undo reliance on forward looking statements that speak only as of the date they are made. Xtent undertakes no obligation to update publicly any forward-looking statements to reflect new information with events or circumstances after the date they were made, or to reflect the occurrence of unnoticed events. The conference call is open to the general public through a live webcast available through our website at www.xtentinc.com. A replay will be available through the Investor Relations section of our website. With that, it's my pleasure to turn the call over to Greg Casciaro, Xtent's President and Chief Executive Officer.

Thank you, TK, and good afternoon everyone. Xtent ended 2007 with very strong momentum in a number of key areas, including cognitive clinical data from the Custom I and Custom II clinical trials, regulatory submissions for both CE Mark and the U.S. IDE trial, as well as biosensors, CE Mark approval, and their stent biodegradable drug polymer combination. In addition, recent data from late 2007 and early 2008 indicates that the drug-eluting stent market may be stabilizing. More specifically, recent clinical data suggests that the overall rates of death and myocardial infarction are no different for DES than for bare metal stents. Increasingly, rather than taking a one size fits all approach, cardiologists are taking into account individual basement and lesion characteristics when deciding what stents to implant. They are focusing on the patient and lesion subsets that would benefit most from DES and recognize patients from specific, real world subgroups, those with longer lesions, smaller vessels, and complex lesions. These are more likely to be good candidates for drug-eluting stents. We remain confident that DES will continue to play a prominent role in the treatment of patients with coronary artery disease, and that our system is positioned to satisfy a major unmet need in the field of coronary intervention. In 2007, we generated a compelling body of positive, long-term follow up data from our Custom I and II clinical trials, which were designed to evaluate the clinical performance of our custom NX system in real world patients. The latest data demonstrated that at one year Custom II clinical follow-up, and at two year Custom I clinical follow-up, no new major adverse cardiac events were reported. The instance of late set thrombosis for patients treated with custom NX in both trials was 0%. We are extremely excited about the results…

Thanks, Greg. After the close of the market today, we released our financial results for the fourth quarter and year-end 2007. I'll cover some of the highlights of those results. Looking at operating expenses first, SG&A expenses were $3.4 million for the fourth quarter of 2007 versus $2 million for the same period last year. The increase reflects the impact of new hiring of SG&A personnel, increased spending in professional services, expenses associated with operating as a public company, and non-cash stock-based compensation expenses. R&D expenses were approximately $9.2 million versus $5.5 million for the same period last year. This reflects increased activity in our product development and clinical trial programs, as well as non-cash stock based compensation expenses. The net loss for the quarter was $11.9 million compared to a net loss of $7.2 million for the same period last year. The net loss attributable to common stockholders was $11.9 million, or $0.52 per share compared to a net loss attributable to common stockholders of $7.2 million or $2.46 per share in the same period a year ago. Looking at the full year 2007 results, SG&A expenses were $11.3 million for the year versus $7.3 million for 2006. The increase reflects the impact of new hiring of SG&A personnel, increased spending in professional services, expenses associated with operating as a public company and non-cash stock based compensation expenses. R&D expenses were approximately $30.9 million versus $18.9 million in 2006. This reflects increased activity in our product development and clinical trial programs, as well as non-cash stock-based compensation expenses. The net loss for the year was $38.8 million compared to a net loss of $25 million for the same period last year. The net loss attributable to common stockholders was $38.8 million or $1.87 per share, compared to a net loss attributable to common stockholders of $38.1 million or $13.96 per share in 2006. Turning briefly to the balance sheet, Xtent ended the fourth quarter with $57.8 million in cash, cash equivalence, and short-term investments. Looking ahead to 2008, Xtent expects to have operating expenses in the range of $25 million to $30 million during the first half of 2008. And with that, I'll turn the call back over to Greg.

Thanks again, TK. I want to conclude by thanking the entire staff and senior leadership team at Xtent for all of the passion and dedication you bring to your work, and for setting the stage for additional great achievements this year. In 2008, we plan to present more long-term follow-up clinical data with a custom family of clinical trials, launch the custom NX DES system in Europe, commence Pivotal trials of custom NX to advance our U.S. regulatory pathway, and we will continue to refine and improve the design of our system to better accommodate clinician needs. As always, we appreciate your interest in the company and we'll now open the call up to your questions.

(Operator Instructions) Our first question will come from Phil Nalbone.

Hi. Good afternoon Greg and TK. I think we hear you loud and clear about the expectation of the second half '08, CE Mark and rollout in Europe. Maybe you can talk a little bit about the current manufacturing capacity and how that's going to scale up in the coming months. Also, talk a little bit about your sales and marketing capability as it stands right now, and what would happen if you actually find yourself with a CE Mark earlier than the second half of the year? Will you be ready to roll this product out?

Well, Phil, in 2007 one of our highlights, although we didn't emphasize it again had to do with the expansion of our facility here to begin the process of preparation for an increase in capacity in testing scenarios. So that is well under way now. An expansion of the clean room is in play as we speak. The hiring of the personnel necessary to support these bills are in process and we feel that we should be in very good shape come the back half of this year to address the demand that this product will have in the European community. Along the lines of how we're going to get it out there, I just returned this weekend from a couple conferences. Most recently, the JIN conference, the joint interventional conference that takes place in Rome, which is between the institutions in Siegburg, Germany and Milan, Italy with Antonio Colombo and Eberhard Grube at the helm, and members of several institutions here in the United States represented there. And part of my task was to join our VP of Sales and Marketing, Brian Walsh, to get together with both distributors as well as direct personnel, potential direct personnel to again help support our launch and growth in the OUS marketplace. So I think internally and infrastructure, well under way. As it relates to personnel and beat on the street, and the direction of the strategy being in place for Europe, I'm very comfortable with where we're at today, and we should be in a very good position come the back half of the year.

Okay, Greg, TK talked a little bit about expectations for operating expenses during the first half of '08. TK, can you talk a little bit about what the key factors will be in determining your cash needs as we go into the second half of '08.

Yeah, I think the two big things there are one, which you've already hit on, Phil, which is the timing of the launch in Europe. As you know the infrastructure build up in terms of manufacturing capacity and sales and marketing is not trivial. And so depending on what the timing of that CE Mark and launch is, that will drive cash needs and working capital needs to a pretty significant extent. The other piece, of course, is the commencement of the IDE trial, and as I think everyone know, that too will require a significant cash demand on the company, and that timing is to be determined but will also be an important factor. So those are the two big things for sure.

Okay, one last thing, Greg. Can we pin you down a little bit on the expected design and scope of the U.S. trial?

That's still a moving target, Phil. I think it'd be safe to say that this will be certainly a randomized clinical trial, one to one randomization. It will include lesions that are maybe a little bit larger than you've seen, up to larger than what you've seen in the past, meaning somewhere in the area of 25 to 28 millimeters. And again, we believe our system would bode well in those areas. It's going to be large study, as you can imagine, somewhere between 1,700 to 1,800 patients and we will commence that of course once we get our IDE Pivotal approved, and just in general think about a year enrollment or so.

And just to be clear, I think you said a one-to-one randomization?

Yes.

Is this designed as a non-inferiority trial?

Yes.

And so the question becomes if not inferiority, to what? Do you expect to randomize against to TAXUS or to XIENCE

Well, as many of you are aware of, Endeavor has gotten the green light and XIENCE should be coming to the market some time in the very near future here. To date, still, TAXUS is the lead force, if you will, in the game. I think we're allowing ourselves some flexibility as it relates to who we go up against, and so we're still working out those details. The up side for us, we clearly believe that whomever we go up against, we are going to match up very effectively to, and I think that is born out in what we've seen to date in over 220 patients that we implanted our system in, in Europe, and that we have a very deliverable, very conformable stent system, and we'll take on whomever seems most appropriate at the time.

Great. Thank you very much. Good luck.

Thank you, Phil, appreciate your questions.

Thank you. Moving on, Tom Gunderson with Piper Jaffray will have our next question.

Hi, guys. It's actually Annie Sullivan calling in for Tom. I was wondering if you can give us any more color on the status of the IDE. Is that actually back in your guys' hands? Or is that back at the FDA after the question?

It is. It's still in our hands, as well as our partner, Biosensors. So we are very busy in completing the answers to questions that they have had for our stent design, as I know and am very aware of that Biosensors equally is very busy in responding to the questions that they had on the drug master file.

Okay, and then was just curious if there was anything in particular that we should be watching for at the upcoming ACC meeting?

No, not from us necessarily, although similar to the JIN meeting that I just attended where about 1,500 to 1,800 physicians were in the audience in Rome, we got a significant amount of podium play, if you will, represented as physicians who are becoming aware of our stent platform saying, "Well, if you had an Xtent here you wouldn't need to do that overlap. You could have handled that with one NX 60." There will be some live cases as I understand it, not from us, at ACC where I would anticipate given that they'd like to show more complex cases, which are rather typical in the [inaudible] of today, that we may get some play from the podium in that regard. The next big conference for us really will take place in May, and that's the PCR Conference, which is an annual conference and that takes place in Barcelona again this year.

Okay, thank you.

You're welcome.

Thank you. Moving on, Sara Michelmore with Cowen and Company will help take our next question.

Yes, good afternoon.

Good afternoon, Sara.

Tim, I just want to double check on the operating expenses. That $25 million to $30 million for the first half looks to me like it does not assume that you guys initiate the U.S. clinical trial. I just want to verify that that is not contemplated in that guidance range.

Yeah, I don't know that it would be fair to draw that conclusion. Again, we're not giving guidance at that point around the timing of the start of the IDE trial, but to the point that we made earlier with Phil, you will see our cash burn ramp fairly materially once the IDE is in full throttle, in terms of patient enrollment.

Okay, so there is nothing that you would point to in terms of what would get you at $25 million versus $30 million. I assume that it's a combination of the timing of that U.S. trial and maybe what you're doing commercially overseas?

Yeah, it's all the investments we're making in the first half to get ready for some of the activities we've already talked about.

Okay, and in terms of the CE Mark, you had touched on it briefly, Greg, but I know you guys had been going around trying to figure out which distributors were most appropriate on a country-by-country basis. If you could just kind of give us an update on kind of where you are in that process.

You bet, Sara. Truly, I think the best approach for us outside the U.S. will be kind of a highbred function, if you will, where we'll do a combination of some direct people working for the company, as well as some clinical marketing people to assist with the distribution areas. Areas that are of particular interest to us on a distributor front, which are a little bit easier to cover that way via clinical support would be in Italy and Spain. Areas that may represent a better opportunity to go direct would be in Germany, Austria, Switzerland, if you will, and I would represent that we have been active for quite some time in trying to filter through the good from the not so good. I think we currently have a short-list that, as TK mentioned, it's an expensive process when you push that button. We're kind of waiting until the very last moment before we have to push it, but I'm very pleased with the talent that we've been unable to unearth over there, both on a direct basis, as well as from a distributor perspective.

Okay, and you mentioned it briefly in terms of PCR being a big meeting for you. I imagine that that's the last, could be the last major date of venue for you prior to launching the product in Europe. Can you give us an update? Which should we expect there? Will Custom III data be there and are you anticipating any updates on Custom I and Custom II at that meeting?

Yes to everything there. So from clinical data, we very well could have Custom I, Custom II updates. More specifically Custom III six-month data will be coming out at that time. Any information I have there is all anecdotal, but again we're dealing with these real world patients and from cases I've seen there, those patients are representing what we saw in earlier clinical trials like Custom II. And the opportunity to come in with MACE rates similar to that would be something that I would look forward to and feel that we've accomplished our objectives as soon as we can. So Custom III will be the big one for PCR and then we have submitted papers as well for the European Society for Cardiology, which takes place at the end of August, and the first week of September. We've not been notified on what's been accepted or not there yet, and then of course we run right into TCT.

That's helpful. Last question, you've got some good data from some of the other companies, working with the Biosensors coding and drug. How do you feel like that sets you up in terms of good clinical data backing for the product when you go to Europe in terms of what's out there for Biomatrix and Nobori products?

Absolutely invaluable. Biomatrix, they had their first implant at this conference that I attended, JIN, but what's the backdrop to that? Well, the reason they were able to have that first implant is because their drug master file was approved. And again, as we go to the regulatory authorities over there we have, we go in tandem with the drug master file in our design dossier. And having that drug master file finally approved by a competent authority and recognized as such in the world bodes well for our future and getting through the process as well.

All right. Great. Thank you so much.

Thanks, Sara.

Thank you, and as a final reminder to our audience, that is *1 if you have a question today. It does appear that we have no further questions at this time. I would like to turn the call back over to you, Mr. Casciaro, for any further comments.

All right. Well, again I want to thank you all for your ongoing interest in the opportunity represented by Xtent and the employees here. We continue to remain very positive and confident that what we bring to market is truly the next generation, not an iteration off of today's platforms, and we look forward to our future updates and success going forward. Thank you all again and have a great day.

Thank you. Ladies and gentlemen, this does include today's teleconference. We would like to thank everyone for their participation in today's call. Have a great rest of your day.