| The company believes that its competitive success will depend primarily upon its ability to demonstrate the clinical efficacy of the EnSite System; effectively create market awareness and acceptance of the system while maintaining its proprietary nature; and manufacture and deliver the system on a timely basis. The tachycardia diagnostic mapping field of the medical device industry has attracted a high level of interest both from companies with an established presence in the field of electrophysiology and from more recently formed companies. The company's competitors include companies that offer standard, single-point contact diagnostic catheters, including Bard Electrophysiology, a division of C.R. Bard, Inc.; EP Technologies, a division of Boston Scientific Corporation; Electro-Catheter Corporation; Cordis Webster, Inc., a division of Johnson & Johnson; Daig Corporation, a division of St. Jude Medical, Inc. and CardioRhythm, Inc., a division of Medtronic, Inc. The company also competes with companies that are developing multi-point, baske contact catheters for diagnosing tachycardia that use multiple electrodes to provide more data points for the measurement of the heart's electrical activity. Basked contact catheters have not to date received regulatory approval for diagnosing tachycardia. The company believes that these basked contact catheters under development can currently measure multiple points of electrical activity in the heart. This group of companies includes Cardia Pathways Corporation, EP Technologies, and Cordis-Webster, Inc. The company is also aware of other medical device companies, such as Biosense, Inc. and Cardima, Inc., that are developing alternatives to single-point contact catheter mapping technology. The company believes that participnts in the market for mapping tachycardia compete on the basis of clinical effectiveness, ease of use, cost and on the basis of acceptance by health care professionals. Competition is also affected by the length of time required for products to be developed and receive regulatory approval. The medical device industry is characterized by rapid and significant technological change. As a result, the company's success will depend in part on its ability to respond quickly to medical and technological changes through the development and introduction of new products. Many of the company's competitors and potential competitors have substantially greater capital resources, research and development staffs and facilities than the company. In addition, most of the ocmpany's competitors and potential competitors have substantially greater experience than the company in researching and developing new products, testing products in clinical trials, obtaining regulatory approvals and manufacturing and marketing medical devices. There can be no assurance that the company will succeed in developing and marketing technologyies and products that are clinically more efficacious and cost-effective than the more established diagnostic products or the new approaches and products developed and marketed by its competitors. Moreover, there can be no assurance that the company will succeed in developing new technologies and products that are available prior to its competitors' products. The failure by the company to demonstrate the efficacy and cost-effective advantages of its products over those of its competitors could have a material adverse effect on the company's business and results of operations. |