November 18, 2004
Matthew M. Gosling
MGosling@hewm.com
Direct (650) 324-7159
Direct Fax (650) 324-6031
Main (650) 324-7000
Fax (650) 324-0638
CONFIDENTIAL FOR USE OF THE COMMISSION ONLY
VIA EMAIL "PEKLENKJ@SEC.GOV"
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W. - Mailstop 3-9
Washington, D.C. 20549
Attn: Mr. James Peklenk
RE: ADEZA BIOMEDICAL CORPORATION
AMENDMENT NO. 2 TO REGISTRATION STATEMENT ON FORM S-1,
FILED OCTOBER 27, 2004 (FILE NO. 333-118012)
Dear Mr. Peklenk:
On behalf of Adeza Biomedical Corporation ("Adeza"), this letter responds
to the comments of the Staff of the Securities and Exchange Commission (the
"Staff") set forth in the letter dated November 16, 2004 in connection with the
filing of the above-referenced registration statement (the "Registration
Statement"). As has been agreed with the Staff, the revisions that Adeza
proposes to make to the Registration Statement in response to the Staff's
comments are explained in the body of this letter. Adeza intends to file an
amendment to the Registration Statement after the Staff has reviewed Adeza's
proposed revisions to the Registration Statement.
In accordance with 17 C.F.R. ss. 200.83(c), we have provided a letter to
the Staff and the Office of Freedom of Information and Privacy Act Operations
requesting confidential treatment for certain portions of Adeza's responses set
forth in this response letter (the "Specified Information"). Adeza has redacted
the Specified Information from the letter filed via EDGAR and has included such
information solely in paper copies of the letter submitted to the Staff.
The responses below correspond to the paragraph numbers of the Staff's
letter. The pages referenced below correspond to the page numbers in the
Registration Statement.
FORM S-1
Financial Statements For The Three Years Ended December 31, 2003 And Nine Months
Ended September 30, 2004
Notes to Financial Statements
Note 3: License Arrangements, page F-15
[HELLER EHRMAN ATTORNEYS LETTERHEAD] James Peklenk
November 22, 2004
Page 2
1. A. - B. [*]
C. [*]
D. [*]
Managements' Discussion And Analysis Of Financial Condition And Results Of
Operations
Overview
Cost of product sales, page 33
2. In response to the Staff's comment, Adeza proposes to make the following
revisions to the Registration Statement:
a. The disclosure on page 33 of the Registration Statement under "Overview
- - Cost of Product Sales" would be revised to read in its entirety as follows:
"COST OF PRODUCT SALES
Our cost of product sales represents the cost of materials, overhead
associated with the manufacture of our products, direct labor, delivery
charges, lab services, royalties and product warranty obligations.
[*]"
b. The disclosure on pages 35-36 of the Registration Statement under
"RESULTS OF OPERATIONS - Nine months ended September 30, 2004 as compared to the
nine months ended September 30, 2003 - Cost of product sales" would be revised
in its entirety to read as follows:
"COST OF PRODUCT SALES
Cost of product sales for the nine months ended September 30, 2004 was $0.9
million, a decrease of $3.7 million from $4.6 million for the nine months
ended September 30, 2003. The decrease in cost of product sales was
primarily the result of reduced royalty costs of $1.0 million and a
one-time reduction in accrued royalties of $2.7 million that we determined
were in excess of amounts actually due. [*] In addition, decrease in other
product costs of $0.6 million was offset by $0.6 million of costs related
to increased unit volumes for the nine months ended September 2004 as
compared to the nine months ended September 2003. Non-royalty related costs
were unchanged for the period ended September 30, 2004 from the period
ended September 30, 2003 as costs related to increased unit sales were
offset by lower unit manufacturing costs. As a percent of revenue, cost of
sales was 14.9% of revenue for the nine months ended September 30, 2004,
excluding the effect of the one-time reduction in accrued
*FOIA CONFIDENTIAL TREATMENT REQUEST* CONFIDENTIAL TREATMENT REQUESTED BY ADEZA
BIOMEDICAL CORPORATION IN CONNECTION WITH AMENDMENT NO. 3 TO REGISTRATION
STATEMENT ON FORM S-1 (FILE NO. 333-118012)
[HELLER EHRMAN ATTORNEYS LETTERHEAD] James Peklenk
November 22, 2004
Page 3
royalties, as compared to 24.1% for the same period in the prior year due
to the reduction in royalty costs."
c. Footnote 3 on Page F-15 of the Registration Statement to read in its
entirety as follows:
"3. LICENSE ARRANGEMENTS
Adeza has entered into license, clinical trial, supply, and sponsored
research and development agreements with universities, research
organizations, and commercial companies. Certain of these agreements
require payments of royalties on future sales of products resulting from
such agreements and may subject Adeza to minimum annual royalty payments to
such contract partners. [*]"
Critical Accounting Policies And Estimates, page 34
3. In response to the Staff's comment, Adeza proposes to add the following to
page 35 of the Registration Statement under "CRITICAL ACCOUNTING POLICIES AND
ESTIMATES":
"COST OF PRODUCT SALES
[*]"
* * *
In addition, Adeza hereby requests, pursuant to 17 C.F.R. ss. 200.83, that
certain provisions of this letter, as indicated by [*], be maintained in
confidence, not be made part of any public record and not be disclosed to any
person as it contains confidential information. In accordance with 17 C.F.R. ss.
200.83(d)(1), if any person (including any governmental employee who is not an
employee of the Commission) should request access to or an opportunity to
inspect this letter, we request that we be immediately notified of any such
request, be furnished with a copy of all written materials pertaining to such
request (including, but not limited to, the request itself) and be given at
least ten business days advance notice of any intended release so that Adeza
may, if deemed necessary or appropriate, pursue any remedies available to it. In
such event, we request that you telephone Matthew Gosling of Heller Ehrman White
& McAuliffe LLP ("HEWM") at (650) 324-7159 or Sarah O'Dowd of HEWM at (650)
324-7045 rather than rely upon the United States Mail for such notice. The
address for Mr. Gosling and Ms. O'Dowd is Heller Ehrman White & McAuliffe, 275
Middlefield Road, Menlo Park, CA 94025.
*FOIA CONFIDENTIAL TREATMENT REQUEST* CONFIDENTIAL TREATMENT REQUESTED BY ADEZA
BIOMEDICAL CORPORATION IN CONNECTION WITH AMENDMENT NO. 3 TO REGISTRATION
STATEMENT ON FORM S-1 (FILE NO. 333-118012)
[HELLER EHRMAN ATTORNEYS LETTERHEAD] James Peklenk
November 22, 2004
Page 4
Please contact me at (650) 324-7159, or Sarah O'Dowd at (650) 324-7045, if
you have any questions regarding the Amendment or the responses to the Staff's
comment letter.
Sincerely,
/s/ Matthew M. Gosling
Matthew M. Gosling