Conceptus, Inc. announced that the Food and Drug Administration (FDA) has granted approval for the company to begin manufacturing the Essure System at UTI Venusa, Ltd. in Ciudad Juarez, Mexico. Conceptus expects that this change will result in a significant decrease in manufacturing costs, which would enable Conceptus to become profitable in 2005.

"This approval caps the year-long project to bring the Venusa facility on line to manufacture Essure," said William Dippel, vice president of Manufacturing and R&D for Conceptus. "We are already shifting production to this facility, and should see an immediate savings in manufacturing costs."

Previously, the Essure System had been built only at the Company's San Carlos facility in Northern California. The San Carlos facility will remain operational for small volume manufacturing, research and development initiatives and development of new manufacturing processes.

"Key elements of our strategic plan are to reduce overall product costs and position ourselves for future growth in product sales," noted Mark Sieczkarek, president and CEO of Conceptus. "At the Venusa facility, we are not only realizing significant costs savings, but we are in a position to handle the large volume production that is in line with our expected sales over the next several years. Additionally, this move helps Conceptus in managing our cash flow by immediately reducing fixed asset and working capital requirements."

Also, Conceptus noted that it is continuing discussions with the FDA over approval of its PMA supplement regarding the 3-year effectiveness rate for Essure. The FDA has responded favorably to the new statistical updates which propose changing the effectiveness rate, now 99.8 per cent at two years of follow up, to an equivalent rate at three years. However, the exact wording of the labeling, as well as other changes that are part of the FDA's continuing effort to standardize contraceptive labeling, are still under review.

Conceptus expects to complete the labeling changes to the FDA's satisfaction within 60 days.

The Essure procedure deploys a soft micro-insert into the fallopian tube through the cervix using a minimally invasive transcervical tubal access catheter. Once in place, the device is designed to elicit tissue growth in and around the micro-insert to form an occlusion or blockage in the fallopian tube. An Essure procedure does not require cutting or penetrating the abdomen and can be performed in a less costly procedure setting without general anesthesia. A woman is able to return home about 45 minutes after the procedure is completed. There is a three-month waiting period after the procedure during which women must use another form of birth control. Essure is 99.8 per cent effective after two years of follow-up. However, like all birth control methods, Essure is not expected to be 100 per cent effective, and pregnancies are expected.

Conceptus manufactures and markets Essure, which is designed to provide a non-incisional alternative to tubal ligation, which is the leading form of birth control worldwide. The availability of Essure in the U.S. is expected to open up a market currently occupied by tubal ligation and vasectomy, which combined account for over 1 million procedures annually.