Form S-1

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell nor does it seek an offer to sell these securities, and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

This is an initial public offering of shares of common stock of Broncus Technologies, Inc. No public market currently exists for the shares. We are offering shares of common stock.

We have applied to list our common stock on the NASDAQ Global Market under the symbol “LUNG.” We expect that the initial public offering price will be between $ and $ per share.

Investing in our common stock involves risks. See “ Risk Factors” beginning on page 8.

This is a firm commitment underwritten offering. We have granted to the underwriters a 30-day option to purchase up to an additional shares on the same terms and conditions as set forth above to the extent the underwriters sell more than firm shares of common stock in this offering.

Neither the Securities and Exchange Commission nor any state securities regulators has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should rely only on information contained in this prospectus. Neither we nor the underwriters have authorized any other person to provide you with information different from or in addition to that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are offering to sell, and seeking offers to buy, common stock only in jurisdictions where offers and sales are permitted.

No action is being taken in any jurisdiction outside the United States to permit a public offering of the shares of our common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.

Through and including , 2008 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider before buying shares of our common stock. Before deciding to invest in shares of our common stock, you should read the entire prospectus carefully, including our financial statements and the related notes and the information set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in each case included elsewhere in this prospectus.

Broncus Technologies, Inc.

Broncus Technologies is a medical technology company focused on developing and commercializing minimally-invasive medical devices for emphysema and other lung diseases. We believe our patented treatment method, Airway Bypass, will be the first minimally-invasive procedure for the treatment of homogeneous, or diffuse, emphysema, the form of the disease experienced by the majority of emphysema patients. We also believe that patients with heterogeneous, or localized, emphysema may also benefit from Airway Bypass. Additionally, we believe that several of our products being developed for Airway Bypass may be used in or adapted for the diagnosis and management of other lung diseases, including pulmonary hypertension and lung cancer.

Emphysema is a chronic, progressive and irreversible disease of the lungs, primarily caused by chronic smoking and characterized by lung tissue destruction, a reduction in air sac elasticity and airway collapse. Air cannot effectively exit through the collapsed airways and, over time, becomes trapped in the lungs, resulting in hyperinflation, leading to a flattening of the diaphragm and a persistent state of breathlessness, or dyspnea, the clinical hallmark of emphysema. Dyspnea severely diminishes quality of life by making daily activities like bathing, walking and sleeping very difficult. There is no known cure for emphysema, and current treatment options have significant limitations.

We have developed the Exhale emphysema product line, which consists of our Exhale Doppler Probe, Exhale Transbronchial Dilation Needle and Exhale Drug-Eluting Stent, specifically to perform our patented Airway Bypass treatment. Airway Bypass is a minimally-invasive, catheter-based bronchoscopic procedure that is designed to reduce lung hyperinflation, improve pulmonary function and enhance quality of life in emphysema patients by creating new passages in the lungs to bypass the collapsed airways caused by emphysema and allow trapped air to exit the lungs.

As of November 15, 2007, more than 100 subjects worldwide have been treated with our products in our studies and clinical trials, including approximately 40 subjects treated in our pivotal Exhale Airway Stents for Emphysema, or EASE, Trial for the treatment of severe homogeneous emphysema. Our feasibility studies have shown that subjects receiving Airway Bypass realized improvements in hyperinflation, pulmonary function and quality of life endpoints. We plan to complete enrollment in the EASE Trial by the end of 2008, to submit our premarket approval, or PMA, application to the United States Food and Drug Administration, or FDA, in mid-2009 and, if our PMA is approved, to begin sales of our Exhale emphysema product line in the United States in mid-2010.

Market Opportunity

According to a 2005 survey by the National Center for Health Statistics, 3.8 million adults in the United States have reported that they had been diagnosed with emphysema, and we believe many more people remain undiagnosed. According to a 2006 article published in the European Respiratory Journal, approximately 1.8% of the population surveyed in an international review suffers from emphysema. According to the National Center

for Health Statistics, the prevalence of emphysema in the United States increased at an average annual growth rate of 2.4% from 1997 to 2005, with approximately 675,000 new diagnoses between 2003 and 2005, the most recent years for which this data is available. We estimate that emphysema is responsible for approximately $5 billion in direct healthcare costs in the United States each year, comprised primarily of hospital and physician costs and oxygen use.

The current treatment options for emphysema patients have significant limitations. Patients are encouraged to stop smoking to slow disease progression, typically receive drug therapy to address related conditions, and are prescribed supplemental oxygen in severe cases. Other options include lung transplantation and lung volume reduction surgery, which are highly invasive, very costly and rarely performed.

The Broncus Solution

We have developed the Exhale emphysema product line to perform our patented Airway Bypass treatment method. During this minimally-invasive procedure, pulmonologists and thoracic surgeons use our Exhale Doppler Probe and Exhale Transbronchial Dilation Needle to select sites and create new passages that bypass the collapsed airways and enable trapped air to exit the lungs. These passages are supported and kept open by our Exhale Drug-Eluting Stents. As trapped air is released, the diaphragm regains some of its normal range of motion, enabling the patient to breathe more easily. The resulting mechanical improvement is designed to reduce breathlessness, which in turn leads to improvements in quality of life. The entire Airway Bypass procedure typically takes one to two hours and may be performed under either general anesthesia or conscious sedation.

There are currently no medical devices commercially available for the treatment of homogeneous emphysema, and Airway Bypass using our Exhale emphysema product line is currently the only procedure being evaluated in a pivotal trial for the treatment of homogeneous emphysema. We estimate that approximately 65% of emphysema patients have homogeneous emphysema. In addition, we believe that many patients with heterogeneous emphysema, who represent approximately 35% of emphysema patients, may also benefit from Airway Bypass.

Our products are used in conjunction with a standard flexible bronchoscope, which is commonly used by thoracic surgeons and pulmonologists. The Exhale emphysema product line presently is comprised of three components:

•

Exhale Doppler Probe and Doppler Processing Unit. The Exhale Doppler Probe and Doppler Processing Unit, or DPU, assist a physician in detecting blood flow and are used to determine an appropriate location along the airway wall for the creation of a new airway passage. We currently have 510(k) clearance from the FDA for the Exhale Doppler Probe and Doppler Processing Unit.

•

Exhale Transbronchial Dilation Needle. The Exhale Transbronchial Dilation Needle is used to pierce the airway wall and to dilate the newly created passage to allow for the placement of an Exhale Drug-Eluting Stent. We plan to submit premarket notification to the FDA for 510(k) clearance of the Exhale Transbronchial Dilation Needle prior to the submission of the PMA application for our Exhale Drug-Eluting Stent.

•

Exhale Drug-Eluting Stent. An Exhale Drug-Eluting Stent supports the newly created passage connecting the lung tissue to the natural airway. Our Exhale Drug-Eluting Stents have a silicone coating that contains the drug paclitaxel, which is intended to inhibit fibrotic and other tissue growth in the passage. Our pivotal EASE Trial is intended to support a PMA application to the FDA to market our Exhale Drug-Eluting Stent.

Benefits of the Broncus System

We believe that Airway Bypass performed with the Exhale emphysema product line can offer the following benefits to patients, physicians and third-party payors:

•

First Minimally-Invasive Treatment Option for Patients with Homogeneous Emphysema. We believe Airway Bypass will be the first minimally-invasive treatment option for patients with homogeneous emphysema and offers compelling benefits over current treatment options.

•

Physiological and Quality of Life Improvements. The results of our feasibility studies have shown immediate and sustained improvements following Airway Bypass using our Exhale Drug-Eluting Stent, including reductions in hyperinflation, improved pulmonary function and enhanced quality of life.

•

Short Bronchoscopic Procedure. The Exhale emphysema products are delivered through a standard bronchoscope, and the entire Airway Bypass procedure typically takes one to two hours to perform.

•

Requires Limited Physician and Hospital Investment. Substantially all hospitals in the United States have the bronchoscopic equipment required for use with our Exhale emphysema product line. These instruments are commonly used by thoracic surgeons and pulmonologists.

•

Improved Economics. We believe that improving lung function with the Airway Bypass procedure has the potential to result in fewer emergency room visits and hospital stays, and reduced oxygen usage, which would lower healthcare costs for providers, third-party payors and patients.

Our Strategy

Our objective is to establish Airway Bypass using the Exhale emphysema product line as the standard of care for the treatment of patients with emphysema, and then lead the development and commercialization of medical devices for other lung diseases. The key elements of our strategy include:

•

Demonstrating the clinical safety and effectiveness, and gaining regulatory approval, of the Exhale emphysema product line;

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Building awareness and driving commercial adoption of Airway Bypass as the standard of care in homogeneous emphysema;

•

Expanding existing coding, coverage and payment; and

•

Leveraging our technology, intellectual property and expertise to expand into other lung diseases.

Risks Associated with Our Business

We face significant risks and uncertainties, which are highlighted in the section entitled “Risk Factors.” These risks include, among other things, the following:

•

we are a development stage company, and we have not generated any revenue;

•

we have incurred significant losses and anticipate that we will incur significant and increasing losses for the foreseeable future;

•

we do not have FDA approval to market our Exhale Drug-Eluting Stent in the United States or elsewhere, and we may never obtain such approval, or such approval could be delayed;

•

we have only completed limited clinical trials and feasibility studies, and the results that we have obtained in our prior trials and studies may not be indicative of the results we will obtain in our EASE Trial;

•

we may experience significant enrollment and other delays in completing our EASE Trial and may be unable to successfully complete this trial;

•

we may be unable to obtain adequate coverage or reimbursement from third-party payors for procedures performed with our products; and

•

Airway Bypass may never achieve market acceptance from healthcare institutions, pulmonologists, thoracic surgeons and patients.

For further discussion of these and other risks you should consider before making an investment in our common stock, see the section entitled “Risk Factors” immediately following this prospectus summary.

Corporate Information

We were originally incorporated in California in 1997, and we plan to reincorporate into Delaware prior to the completion of this offering. Our principal offices are located at 1400 North Shoreline Blvd, Suite A8, Mountain View, CA 94043. We also maintain an office in Nyon, Switzerland. Our telephone number is (650) 428-1600. Our world wide web address is http://www.broncus.com. The information found on, or accessible through, our website is not a part of this prospectus.

Broncus, our logo and “Exhale” are registered trademarks of Broncus. All other trademarks, tradenames and service marks appearing in this prospectus are the property of their respective owners.

THE OFFERING

Common stock offered by Broncus

Common stock to be outstanding after this offering

Use of proceeds

We intend to use the net proceeds of this offering for clinical trials, research and development, sales and marketing and working capital and general corporate purposes, which may include acquisitions of, or investments in, complementary businesses, technologies or other assets. See “Use of Proceeds.”

Proposed NASDAQ Global Market symbol

LUNG

The number of shares of common stock to be outstanding after this offering is based on 131,918,617 shares outstanding as of October 31, 2007, and excludes:

•

20,036,292 shares of common stock issuable upon the exercise of outstanding options as of October 31, 2007, at a weighted average exercise price of $0.16 per share;

•

1,481,078 shares of common stock reserved for issuance under our 2007 stock option plan, 360,000 shares of which are issuable upon the exercise of outstanding options granted in November 2007, at an exercise price of $0.81 per share;

•

6,000,000 shares of common stock reserved for issuance under our 2008 equity incentive plan and 2,000,000 shares of common stock reserved for issuance under our 2008 employee stock purchase plan, each of which will become effective on the date of this prospectus, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under these plans;

•

3,227,675 shares of common stock issuable upon the exercise of outstanding warrants that will remain outstanding after the completion of this offering, with a weighted average exercise price of $0.19 per share, including 760,109 shares that will become issuable upon the first commercial sale of our Exhale Drug-Eluting Stent; and

•

shares of common stock issuable upon the net exercise of outstanding warrants that will expire upon the completion of this offering, assuming an initial public offering price of $ per share.

Except as otherwise noted, all information in this prospectus:

•

reflects a -for- reverse split of our outstanding capital stock to be effected prior to the completion of this offering;

•

reflects our reincorporation into Delaware, and the filing of our restated certificate of incorporation upon the completion of this offering;

•

reflects the conversion of all our outstanding shares of convertible preferred stock into an aggregate of 122,985,169 shares of common stock immediately prior to the completion of this offering; and

•

assumes no exercise of the underwriters’ option to purchase additional shares.

SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables summarize our consolidated financial data. The consolidated statements of operations data for the years ended December 31, 2004, 2005 and 2006 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of operations data for the nine months ended September 30, 2006 and 2007 and the consolidated balance sheet data as of September 30, 2007 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The unaudited consolidated financial statements include, in the opinion of management, all adjustments, which include only normal recurring adjustments, that management considers necessary for the fair presentation of the financial information set forth in those consolidated financial statements. You should read this data together with our consolidated financial statements and the notes to those statements included elsewhere in this prospectus and the information under “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our historical results are not necessarily indicative of the results to be expected in any future period. See note 2 of the notes to our consolidated financial statements for a description of the method used to compute basic and diluted net loss per common share and pro forma basic and diluted net loss per share.


	Year ended December 31,									Nine months ended September 30,
	2004			2005			2006			2006			2007
	(in thousands, except share and per share data)
Consolidated statements of operations data:
Operating expenses:
Research and development(1)	$	5,088		$	6,564		$	8,950		$	6,260		$	9,443
Selling, general and administrative(1)		1,702			1,599			1,282			834			2,157

Total operating expenses		6,790			8,163			10,232			7,094			11,600

Loss from operations		(6,790	)		(8,163	)		(10,232	)		(7,094	)		(11,600	)
Interest income		101			235			674			355			808
Interest expense		(167	)		—			(2	)		(2	)		(8	)
Other income (expense), net		—			—			(13	)		18			(478	)

Net loss	$	(6,856	)	$	(7,928	)	$	(9,573	)	$	(6,723	)	$	(11,278	)

Net loss per common share—basic and diluted	$	(1.60	)	$	(1.31	)	$	(1.51	)	$	(1.07	)	$	(1.66	)

Weighted average common shares outstanding		4,281,654			6,054,876			6,324,370			6,305,237			6,775,237

Pro forma net loss per common share—basic and diluted (unaudited)							$						$

Pro forma weighted average common shares outstanding used to compute basic and diluted net loss per common share (unaudited)

(1) Includes employee stock-based compensation as follows:
	Year ended December 31,									Nine months ended September 30,
	2004			2005			2006			2006			2007
	(in thousands)
Research and development	$	—		$	—		$	125		$	52		$	301
Selling, general and administrative		—			—			92			30			310


	As of September 30, 2007
	Actual			Pro forma(1)			Pro forma as adjusted(2)
	(in thousands)
Consolidated balance sheet data:
Cash and cash equivalents	$	16,034		$	28,434		$
Working capital		14,291			26,691
Total assets		16,864			29,264
Preferred stock warrant liability		2,763			—
Convertible preferred stock		82,362			—
Deficit accumulated during the development stage		(72,216	)		(72,216	)
Total stockholders’ equity (deficit)		(70,513	)		27,012

(1)

The pro forma balance sheet data give effect to (i) the issuance of 18,850,714 shares of our Series F preferred stock and warrants for an aggregate purchase price of $12.4 million in October 2007, (ii) the conversion of all outstanding shares of preferred stock into common stock and the reclassification of preferred stock warrant liability to common stock and additional paid-in capital immediately prior to the completion of this offering and (iii) the exercise of warrants to purchase shares of common stock on a net exercise basis, assuming an initial public offering price of $ per share, that will expire upon the completion of this offering.

(2)

The pro forma as adjusted balance sheet data give effect to the adjustments in note (1) and to our sale of shares of common stock in this offering at an assumed initial public offering price of $ per share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease, respectively, the amount of cash and cash equivalents, working capital, total assets and total stockholders’ equity (deficit) on a pro forma as adjusted basis by approximately $ million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this prospectus, before deciding whether to invest in shares of our common stock. If any of the following risks actually occur, our business, financial condition and results of operations would suffer. In that case, the trading price of our common stock would likely decline and you might lose all or part of your investment in our common stock.

We are a development stage company and we currently do not generate any revenue.

We are a development stage medical device company and we currently do not have any commercialized products or any source of revenue. We are investing substantially all of our time and resources in developing our Exhale emphysema product line, which will require additional clinical evaluation, regulatory review and approval, significant marketing efforts, post-market compliance, and substantial additional investment before it can provide us with any revenue. As of November 15, 2007, we had enrolled more than 60 out of an anticipated 315 subjects in our EASE Trial, to be used as a basis for our application for FDA approval to market our Exhale Drug-Eluting Stent. Our efforts might not lead to a successful clinical trial, regulatory approval or a commercially successful product. In addition, the use of Airway Bypass for emphysema is a novel procedure that has not previously been investigated to any meaningful extent prior to our clinical trials. Accordingly, we are subject to the risks of failure inherent in the development of a product based on new technology.

We have incurred significant losses since inception and anticipate that we will continue to incur significant and increasing losses for the foreseeable future.

We have incurred significant net losses in each quarter since our inception in 1997, including net losses of $6.9 million, $7.9 million, $9.6 million and $11.3 million, respectively, for the years ended December 31, 2004, 2005, and 2006 and the nine months ended September 30, 2007. We expect our research and development expenses to increase significantly in connection with our EASE Trial and other development and commercialization activities. We also expect to incur significant expenses related to the development of sales, marketing and commercial-scale manufacturing capabilities prior to any receipt of FDA approval for our Exhale Drug-Eluting Stent, and we expect these expenses to increase further if we receive FDA approval. Additionally, we expect that our general and administrative expenses will increase significantly due to the additional operational and regulatory burdens applicable to public companies. As a result, we expect to continue to incur significant and increasing operating losses for the foreseeable future.

We may not receive FDA approval to market our products, and even if we do receive FDA approval, such approval could be delayed.

Before we may market our Exhale Drug-Eluting Stent in the United States, we must successfully complete clinical trials and obtain premarket approval from the FDA for our Exhale Drug-Eluting Stent, and 510(k) clearance for other components of our Exhale emphysema product line. The PMA process requires us to demonstrate the safety and effectiveness of the Exhale Drug-Eluting Stent to the FDA’s satisfaction. This process is expensive and uncertain, and requires detailed and comprehensive scientific and human clinical data. This process can take several years after a PMA application is filed and might never result in the FDA approving a PMA application. The 510(k) process requires us to demonstrate to the FDA’s satisfaction that our Exhale Transbronchial Dilation Needle is substantially equivalent to one or more comparable, legally marketed medical devices, known as predicate devices. If the FDA does not agree, then we might need to conduct additional studies or trials to support a 510(k) or PMA.

Following submission and FDA review of our PMA application, the FDA might disagree with our interpretation of data, or might find the results inadequate to support approval of our PMA application, even if the EASE Trial has achieved its effectiveness and safety endpoints, and even if the response rate of the treatment arm in the trial is found to be statistically larger than the response rate of the control arm. The FDA could require us to pursue additional analyses, studies or trials, and the results of any additional analyses, studies or trials may not be satisfactory to the FDA. Alternatively, the time required for any additional analyses, studies or trials may significantly delay our ability to market our Exhale emphysema product line. If we are unable to demonstrate the safety and effectiveness of our Exhale Drug-Eluting Stent to the FDA’s satisfaction, we will be unable to obtain regulatory approval to market our Exhale Drug-Eluting Stent in the United States. Even if the FDA ultimately grants us a PMA, it may require further postapproval studies, and failure to complete any required postapproval study to the FDA’s satisfaction, or adverse results in any such study, could cause the FDA to withdraw its approval.

As Airway Bypass is a novel treatment, and involves the creation of new passages in the lungs and the implantation in the lungs of a device that contains silicone and the drug paclitaxel, we believe the FDA will review our PMA application with a high degree of scrutiny, which could cause the regulatory process to be lengthier and more involved than that for products without these characteristics. In addition, these factors may cause the FDA to require us to conduct additional clinical trials and provide additional information, and ma



Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee
Common Stock, $0.00001 par value per share	$86,250,000	$2,648


	Per Share	Total
Initial Public Offering Price	$	$

Underwriting Discounts and Commissions	$	$

Proceeds to Broncus (before expenses)	$	$


		Page
Management		74
Executive Compensation		82
Related Party Transactions		101
Principal Stockholders		105
Description of Capital Stock		108
Shares Eligible For Future Sale		112
Underwriting		114
Legal Matters		119
Experts		119
Where You Can Find Additional Information		119
Index to Consolidated Financial Statements		F-1

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		Page
Prospectus Summary		1
Risk Factors		8
Special Note Regarding Forward-Looking Statements and Industry Data		30
Use of Proceeds		31
Dividend Policy		31
Capitalization		32
Dilution		34
Selected Consolidated Financial Data		37
Management’s Discussion and Analysis of Financial Condition and Results of Operations		39
Business		50