10-K/A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A-1

/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: March 31, 2000

OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-15360

BIOJECT MEDICAL TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

Oregon	93-1099680
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7620 SW Bridgeport Road, Portland, Oregon	97224
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: 503-639-7221

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, without par value

    Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes /x/  No / /

    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment to this Form 10-K. /x/

    The aggregate market value of the voting stock held by non-affiliates of the Registrant was $49,044,125 as of June 23, 2000 based upon the last sales price as reported by the Nasdaq SmallCap System.

    The number of shares outstanding of the Registrant's Common Stock as of June 23, 2000 was 6,384,874 shares.

Documents Incorporated by Reference

    Portions of the registrant's definitive Proxy Statement for the 2000 Annual Shareholders' Meeting are incorporated by reference into Part III.

PART II

Item 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of Bioject Medical Technologies Inc:

    We have audited the accompanying consolidated balance sheets of Bioject Medical Technologies Inc. (an Oregon corporation) and subsidiaries as of March 31, 2000 and 1999, and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended March 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bioject Medical Technologies Inc. and subsidiaries, as of March 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2000, in conformity with accounting principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

Portland, Oregon
Apri1 28, 2000

1

BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

			March 31,
			2000			1999
ASSETS
Current assets:
	Cash and cash equivalents		$	6,883,524		$	1,274,311
	Accounts receivable, net of allowance for doubtful accounts of $20,000 and $64,000			126,634			305,064
	Stock subscription receivable			—			2,400,000
	Inventories			833,416			1,251,186
	Other current assets			64,806			53,599
	Current assets of discontinued operations (Note 3)			—			597,000
		Total current assets		7,908,380			5,881,160
Property and equipment, at cost:
	Machinery and equipment			2,320,197			2,235,733
	Production molds			2,060,977			2,051,697
	Furniture and fixtures			175,210			170,436
	Leasehold improvements			94,115			94,115
				4,650,499			4,551,981
	Less—accumulated depreciation			(3,307,367	)		(2,615,536	)
				1,343,132			1,936,445
Other assets				562,795			535,092
Non-current assets of discontinued operations				—			238,583
		Total assets	$	9,814,307		$	8,591,280
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	194,605		$	190,676
	Accrued payroll			309,160			135,445
	Other accrued liabilities			377,166			554,388
	Deferred revenue			96,727			—
	Current liabilities of discontinued operations (Note 3)			—			1,962,906
		Total current liabilities		977,658			2,843,415
Commitments (Note 6)
Shareholders' equity:
	Preferred stock, no par value, 10,000,000 shares authorized; issued and outstanding:
	Series A Convertible—692,694 shares, $15 stated value			12,305,533			9,163,025
	Series B Convertible—none and 134,333 shares, $15 stated value			—			1,566,762
	Series C Convertible—391,830 shares, no stated value			2,400,000			2,400,000
	Common stock, no par, 100,000,000 shares authorized; issued and outstanding 6,305,671 and 5,802,247 shares			55,188,623			50,594,111
	Accumulated deficit			(61,057,507	)		(57,976,033	)
		Total shareholders' equity		8,836,649			5,747,865
		Total liabilities and shareholders' equity	$	9,814,307		$	8,591,280

The accompanying notes are an integral part of these consolidated financial statements.

2

BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

			For the Year Ended March 31,
			2000			1999			1998
Revenue:
	Net sales of products		$	646,590		$	587,131		$	1,435,107
	Licensing/technology fees			578,273			2,043,841			500,000
				1,224,863			2,630,972			1,935,107
Operating expenses:
	Manufacturing			1,791,751			1,915,729			1,749,064
	Research and engineering			1,330,224			978,683			883,632
	Selling, general and administrative			2,548,281			2,510,485			3,428,321
		Total operating expenses		5,670,256			5,404,897			6,061,017
Operating loss				(4,445,393	)		(2,773,925	)		(4,125,910	)
Interest expense				—			—			(390,411	)
Other income				125,561			122,020			109,983
				125,561			122,020			(280,428	)
Loss before income taxes				(4,319,832	)		(2,651,905	)		(4,406,338	)
Provision for income taxes				—			—			—
Loss from continuing operations before preferred stock dividend				(4,319,832	)		(2,651,905	)		(4,406,338	)
Preferred stock dividend				(1,164,519	)		(1,412,341	)		(112,035	)
Loss from continuing operations allocable to common shareholders				(5,484,351	)		(4,064,246	)		(4,518,373	)
Loss from discontinued operations allocable to common shareholders				(449,790	)		(3,608,928	)		(15,096,294	)
Gain on sale of discontinued operations				2,852,667			—			—
Minority interest allocation				—			597,000			2,985,000
Gain (loss) from discontinued operations allocable to common shareholders				2,402,877			(3,011,928	)		(12,111,294	)
Net loss allocable to common shareholders			$	(3,081,474	)	$	(7,076,174	)	$	(16,629,667	)
Basic and diluted loss per common share from continuing operations			$	(0.94	)	$	(0.72	)	$	(0.98	)
Basic and diluted loss per common share from discontinued operations			$	(0.08	)	$	(0.53	)	$	(2.61	)
Basic and diluted income per common share from sale of discontinued operations			$	0.49		$	—		$	—
Basic and diluted net loss per common share			$	(0.53	)	$	(1.25	)	$	(3.59	)
Shares used in per share calculations				5,834,177			5,663,048			4,630,227

The accompanying notes are an integral part of these consolidated financial statements.

3

BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

	Preferred Stock
													Common Stock
	Series A				Series B					Series C
													Accumulated Shares				Accumulated Deficit			Total Shareholders' Equity
	Shares	Amount			Shares		Amount			Shares	Amount			Amount
Balance at March 31, 1997	—	$	—		—		$	—		—	$	—	3,908,083	$	40,035,736		$	(34,270,192	)	$	5,765,544
Issuance of common stock in exchange for services	—		—		—			—		—		—	9,929		94,936			—			94,936
Issuance of common stock and warrants in a private placement in June and July 1997	—		—		—			—		—		—	581,395		1,225,000			—			1,225,000
Issuance of common stock and warrants in a private placement in October 1997	—		—		—			—		—		—	545,455		2,800,000			—			2,800,000
Issuance of common stock pursuant to stock option exercises	—		—		—			—		—		—	27,220		154,869			—			154,869
Issuance of common stock under 401(k) matching plan	—		—		—			—		—		—	8,526		31,006			—			31,006
Issuance of warants in exchange for services	—		—		—			—		—		—	—		81,350			—			81,350
Issuance of common stock for acquisition of assets	—		—		—			—		—		—	20,000		134,400			—			134,400
Issuance of preferred stock in exchange for debt, net of expenses	692,694		10,220,411		134,333			1,985,000		—		—	—		—			—			12,205,411
Adjustment for inherent dividend	—		(2,500,000	)	—			(500,000	)				—		3,000,000			—			—
Preferred stock dividend	—		105,746		—			6,289		—		—	—		—			—			112,035
Net loss allocable to common shareholders	—		—		—			—		—		—	—		—			(16,629,667	)		(16,629,667	)
Balance at March 31, 1998	692,694		7,826,157		134,333			1,491,289		—		—	5,100,608		47,557,297			(50,899,859	)		5,974,884
Issuance of common stock pursuant to warrant exercises	—		—		—			—		—		—	618,012		2,642,221			—			2,642,221
Issuance of common stock pursuant to stock option exercises	—		—		—			—		—		—	71,627		326,711			—			326,711
Issuance of warrants in exchange for services	—		—		—			—		—		—	—		32,242			—			32,242
Issuance of common stock for acquisition of assets	—		—		—			—		—		—	12,000		35,640			—			35,640
Preferred stock dividend	—		1,336,868		—			75,473		—		—	—		—			—			1,412,341
Issuance of preferred stock pursuant to joint venture agreement	—		—		—			—		391,830		2,400,000	—		—			—			2,400,000
Net loss allocable to common shareholders	—		—		—			—		—		—	—		—			(7,076,174	)		(7,076,174	)
Balance at March 31, 1999	692,694		9,163,025		134,333			1,566,762		391,830		2,400,000	5,802,247		50,594,111			(57,976,033	)		5,747,865
Reverse split on October 13, 1999	—		—		—			—		—		—	57		—			—			—
Issuance of common stock pursuant to warrant exercises	—		—		—			—					371,298		3,172,820			—			3,172,820
Issuance of common stock pursuant to stock option exercises	—		—		—			—					51,273		208,600			—			208,600
Issuance of common stock in exchange for services	—		—		—			—					15,000		155,389			—			155,389
Issuance of common stock to strategic partner	—		—		—			—					65,796		1,468,930			—			1,468,930
Preferred stock dividend	—		1,145,654		—			18,865		—		—	—		—			—			1,164,519
Amendment to Elan Agreement setting fixed converstion price and conversion of Series B into common stock warrants	—		1,996,854		(134,333	)		(1,585,627	)	—		—	—		(411,227	)		—			—
Net loss allocable to common shareholders	—		—		—			—		—		—	—		—			(3,081,474	)		(3,081,474	)
Balance at March 31, 2000	692,694	$	12,305,533		—		$	—		391,830	$	2,400,000	6,305,671	$	55,188,623		$	(61,057,507	)	$	8,836,649

The accompanying notes are an integral part of these consolidated financial statements.

4

BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

				For the Year Ended March 31,
				2000			1999			1998
Cash flows from operating activities:
	Net loss allocable to common shareholders			$	(3,081,474	)	$	(7,076,174	)	$	(16,629,667	)
	Adjustments to reconcile net loss to net cash used in operating activities from continuing operations:
		Net loss from discontinued operations			449,790			3,011,928			12,111,294
		Depreciation and amortization			730,796			707,494			514,668
		Contributed capital for services			155,389			32,242			207,292
		Gain on sale of discontinued operations			(2,852,667	)		—			—
		Preferred stock dividends			1,164,519			1,412,341			112,035
		Interest paid on preferred stock			—			—			390,411
	Changes in operating assets and liabilities:
		Accounts receivable			178,430			(151,343	)		158,135
		Inventories			417,770			640,784			(455,514	)
		Other current assets			(11,207	)		21,693			(30,070	)
		Accounts payable			3,929			(306,505	)		(162,793	)
		Accrued payroll			173,715			(82,979	)		5,294
		Other accrued liabilities			(490,830	)		(222,734	)		77,738
		Deferred revenue			96,727			(10,000	)		(240,000	)
			Net cash used in operating activities of continuing operations		(3,065,113	)		(2,023,253	)		(3,941,177	)
			Net cash provided by (used in) operating activities of discontinued operations		1,920,604			(1,102,875	)		(96,294	)
					(1,144,509	)		(3,126,128	)		(4,037,471	)
Cash flows from investing activities:
	Purchase of Marathon Stock				(331,456	)		—			—
	Capital expenditures of continuing operations				(98,516	)		(76,578	)		(110,387	)
	Capital expenditures of discontinued operations				—			(281,729	)		(15,000,000	)
	Other assets				(66,656	)		(111,025	)		(47,650	)
			Net cash used in investing activities		(496,628	)		(469,332	)		(15,158,037	)
Cash flows from financing activities:
	Cash proceeds from the sale of Series C Preferred stock				2,400,000			—			—
	Cash proceeds from common stock				4,850,350			2,968,932			4,179,869
	Issuance of preferred stock				—			—			12,015,000
	Preferred stock issuance costs				—			—			(200,000	)
	Minority interest capital contribution to discontinued operations				—			—			2,985,000
			Net cash provided by financing activities		7,250,350			2,968,932			18,979,869
Increase (decrease) in cash and cash equivalents					5,609,213			(626,528	)		(215,639	)
Cash and cash equivalents:
	Beginning of period				1,274,311			1,900,839			2,116,478
	End of period			$	6,883,524		$	1,274,311		$	1,900,839
Supplemental disclosure of cash flow information:
	Cash paid for interest			$	—		$	—		$	—
	Cash paid for income taxes				—			—			—
	Purchase of goodwill for stock				—			—			134,400
	Purchase of fixed assets for stock				—			35,640			—
	Stock subscription receivable				—			2,400,000			—

The accompanying notes are an integral part of these consolidated financial statements.

5

BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  THE COMPANY:

    The consolidated financial statements of Bioject Medical Technologies Inc. (the "Company"), include the accounts of Bioject Medical Technologies Inc. ("BMTI"), an Oregon corporation, and its wholly owned subsidiaries, Bioject Inc., an Oregon corporation ("Bioject"), and Marathon Medical Technologies Inc. ("Marathon Medical") (formerly Bioject JV Subsidiary Inc.), an Oregon corporation. All significant intercompany transactions have been eliminated. Bioject Inc. commenced operations in 1985. Bioject Medical Technologies Inc. was formed in December 1992 for the purpose of acquiring all of the capital stock of Bioject Medical Systems Ltd., a Company organized under the laws of British Columbia, Canada, in a stock-for-stock exchange in order to establish a U.S. domestic corporation as the publicly traded parent company of Bioject Inc. and Bioject Medical Systems Ltd. Bioject Medical Systems Ltd. was terminated in fiscal 1997. Marathon Medical was formed in October 1997. At that time, Marathon acquired the license to certain continuous blood glucose monitoring technology from Elan Corporation, plc. ("Elan") and entered into a joint venture arrangement with Elan to develop and commercialize the blood glucose monitoring technology. In connection with the sale of the license, BMTI acquired Elan's 19.9% ownership of the stock of Marathon. BMTI now owns 100% of Marathon's stock. Marathon's operations are reported as "Discontinued Operations" in the financial statements and other financial information included as part of this report. All references to the Company include Bioject Medical Technologies Inc. and its subsidiaries, unless the context requires otherwise.

    The Company commenced operations in 1985 for the purpose of developing, manufacturing and distributing a new drug delivery system. Since its formation, the Company has been engaged principally in organizational, financing, research and development, and marketing activities. In the last quarter of fiscal 1993, the Company launched U.S. distribution of its Biojector 2000 system primarily to the hospital and large clinic market. The Company's products and manufacturing operations are subject to extensive government regulation, both in the U.S. and abroad. In the U.S., the development, manufacture, marketing and promotion of medical devices is regulated by the Food and Drug Administration ("FDA") under the Federal Food, Drug, and Cosmetic Act (the "FFDCA"). In 1987, the Company received 510(k) marketing clearance from the FDA allowing the Company to market a hand-held CO2-powered jet injection system. In June 1994, the Company received clearance from the FDA under 510(k) to market a version of its Biojector® 2000 system in a configuration targeted at high volume injection applications. In October 1996, the Company received 510(k) clearance for a non needle disposable vial access device. In March 1997, the Company received additional 510(k) clearance for certain enhancements to its Biojector 2000 system. In January 1999, the Company received ISO9001 and EN46001 certification and in November 1999, the Company received CE Mark Certification for the Company's jet injection systems which allows the products to be sold in the European Union. In March 1998, the Company entered into a transaction with Vitajet Corporation ("Vitajet") whereby the Company acquired, along with certain other assets, the rights to the Vitajet®, a spring-powered, needle-free self-injection device which currently has regulatory clearance for administering injections of insulin. In September 1997, the Company entered into a joint venture agreement with Elan for the development and commercialization of certain blood glucose monitoring technology which the company licensed from Elan. In June 1999, Marathon completed a sale of the license to the blood glucose monitoring technology, along with certain fixed assets related to development of that technology.

    Since its inception, the Company has incurred operating losses and at March 31, 2000, has an accumulated deficit of approximately $61 million. The Company's revenues to date have been derived primarily from licensing and technology fees for the jet injection technology and from limited product sales of the Biojector 2000 system and Biojector syringes. The product sales were principally sales to dealers to

6

stock their inventories. More recently, the Company has sold its products to end-users, primarily public health clinics for vaccinations and to nursing organizations for flu immunization. Future revenues will depend upon acceptance and use by healthcare providers and on the Company successfully entering into license and supply agreements with major pharmaceutical and biotechnology companies. Uncertainties over government regulation and competition in the healthcare industry may impact healthcare provider expenditures and third party payer reimbursements and, accordingly, the Company cannot predict what impact, if any, subsequent healthcare reforms and industry trends might have on its business. In the future, the Company is likely to require substantial additional financing. Failure to obtain such financing on favorable terms could adversely affect the Company's business.

    To date, the Company's revenues have not been sufficient to cover manufacturing and operating expenses. However, the Company believes that if its products attain significantly greater general market acceptance and if the Company is able to enter into large volume supply agreements with major pharmaceutical and biotechnology companies, the Company's product sales volume will increase. Significantly higher product sales volumes will allow the Company to realize volume-related manufacturing cost efficiencies. This, in turn, will result in a reduced costs of goods as a percentage of sales, eventually allowing the Company to achieve positive gross profit. The Company believes that positive gross profit from product sales, together with licensing and technology revenues from agreements entered into with large pharmaceutical and biotechnology companies will eventually allow the Company to operate profitably. The level of revenues required to generate net income will be affected by a number of factors including the mix of revenues between product sales and licensing and technology fees, pricing of the Company's products, its ability to attain volume-related and automation-related manufacturing efficiencies, and the impact of inflation on the Company's manufacturing and other operating costs. There can be no assurance that the Company will achieve sufficient cost reductions or sell its products at prices or in volumes sufficient to achieve profitability or offset increases in its costs should they occur.

2.  ACCOUNTING POLICIES:

CASH EQUIVALENTS

    The Company considers cash equivalents to consist of short-term, highly liquid investments with an original maturity of less than three months.

INVENTORIES

    Inventories are stated at the lower of cost or market. Cost is determined in a manner which approximates the first-in, first out (FIFO) method. Costs utilized for inventory valuation purposes include labor, materials and manufacturing overhead. Net inventories consist of the following:

March 31,	2000		1999
Raw materials and components	$	253,120	$	289,214
Work-in-process		3,764		—
Finished goods		576,532		961,972
	$	833,416	$	1,251,186

7

PROPERTY AND EQUIPMENT

    For financial statement purposes, depreciation expense on property and equipment is computed on the straight-line method using the following lives:

Furniture and Fixtures	5 years
Machinery and Equipment	7 years
Computer Equipment	3 years
Production Molds	5 years

    Leasehold improvements are amortized on the straight-line method over the shorter of the remaining term of the related lease or the estimated useful lives of the assets.

OTHER ASSETS

    Other assets include costs incurred for the application for patents, totaling $673,113 and $614,369 March 31, 2000 and 1999, respectively. These costs are amortized on a straight-line basis over 17 years. Accumulated amortization totaled $226,790 and $204,713 at March 31, 2000 and 1999, respectively. Amortization expense for the years ended March 31, 2000, 1999 and 1998 totaled $30,000 for each year.

    Also included in other assets is the cost of assets acquired from Vitajet Corporation in a stock for assets exchange. In March 1998, the Company paid 20,000 shares of its common stock for certain molds, tooling, patent rights and customer lists, the value of which totaled $134,400 at the date of acquisition and is being amortized over 15 years.

ACCOUNTING FOR LONG-LIVED ASSETS

    In March 1995, the Financial Accounting Standards Board issued Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets To Be Disposed Of" (SFAS 121), which requires the Company to review for impairment of its long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. The Company does not believe that an adjustment to the carrying value of its long-lived assets is necessary, based on its strategic plan. However, if the Company is unable to raise additional capital and continue as a going concern, certain adjustments to the carrying value of the long-lived assets may be necessary.

REVENUE RECOGNITION FOR PRODUCT SALES

    The Company records revenue from sales of its products upon shipment. In fiscal 2000, 1999 and 1998, sales to one customer (different for each period presented) accounted for 10%, 7% and 12%, respectively, of net sales of products. At March 31, 2000, 1999 and 1998 accounts receivable from one customer (different for each period presented) accounted for 51%, 68%, and 19%, respectively, of total accounts receivable.

RESEARCH AND DEVELOPMENT AND LICENSING/TECHNOLOGY REVENUES

    Prior to December 1999, licensing fees were recognized as revenue when due and payable since such fees were non-refundable and imposed no future performance requirements or other obligations on the

8

Company. In December 1999, the SEC Staff issued Staff Accounting Bulletin 101 ("SAB 101"), "Revenue Recognition in Financial Statements." In accordance with SAB 101, all licensing revenue subsequent to December 1999 will be recognized over the term of the license. There was no cumulative effect of such accounting change since as of December 1999 all prior licensing agreements had been terminated.

    Product development revenue is recognized on a percentage of completion basis as qualifying expenditures are incurred. Expenditures for research and development are charged to expense as incurred.

    HOFFMAN-LA ROCHE.  In January 1995, the Company entered into a joint development and exclusive licensing and distribution agreement with Hoffman-LaRoche, a major pharmaceutical company. Under the terms of the agreement, the Company agreed to develop the B-2020, a product with specific application to certain Roche products. The Company received a licensing fee totaling $500,000, which was recognized as revenue in fiscal 1995. The Company also received product development fees on an agreed schedule. In fiscal 1996, the Company received $900,000, of which $399,000 was recognized as revenue. In fiscal 1997, the Company received $250,000 in product development fees and recognized revenue of $501,000. In fiscal 1998, the Company received $250,000 in product development fees and recognized revenue of $500,000. In June 1999, Roche advised the Company that because of the additional time and cost required to gain regulatory clearance to use the B-2020 in conjunction with the Roche products and because of an overall change in its marketing strategy for the products in question, it does not intend to pursue distributing the B-2020 and is relinquishing its exclusive rights to the product.

    ELAN CORPORATION.  On September 30, 1997, the Company signed a binding letter agreement (the "Agreement") with Elan Corporation, plc the goals of which included the development and commercialization of Elan's blood glucose monitoring technology and a collaborative arrangement to further develop the Company's jet injection technology. Among various terms, all of which were determined in arms-length negotiation, the Agreement provided for:

•

Elan investing $3 million in Bioject in exchange for approximately 545,000 shares of common stock and a five year warrant to purchase 350,000 shares of common stock at $12.50 per share.



•

Formation of Marathon Medical, which is owned 80.1% by Bioject and 19.9% by Elan, to further develop and commercialize the blood glucose monitoring technology.



•

Payment of a $15 million up front fee and future milestone payments totaling $15.5 million and royalties on net sales in exchange for North American rights to Elan's blood glucose monitoring technology.



•

The loan of $12.015 million to Bioject on a long-term promissory note bearing interest at 9% per annum through December 31, 1997 and 12% thereafter for the purpose of Bioject's investment in the new subsidiary's common stock.



•

The investment by Elan of $2.985 million in Marathon Medical's common stock.



•

The commitment by Elan to further develop the blood glucose monitoring technology until the earlier of human clinical trials, March 31, 1998 or $2.5 million is expended by Elan.



•

The submission to Bioject's shareholders of a proposal to approve the exchange of the long-term promissory note for $10 million plus accrued interest for the Company's Series A Convertible Preferred Stock and $2.015 million for Series B Convertible Preferred Stock, with the Series A

9

Convertible Preferred Stock accruing dividends at the rate of 9% per annum (compounded semi-annually) and the Series B Convertible Preferred Stock accruing no mandatory dividends.

•

The submission to Bioject's shareholders of a proposal to approve the issuance of up to $4 million of Bioject's Series C Convertible Preferred Stock to Elan to provide Bioject with funds to contribute toward Marathon Medical's additional development funding needs.



•

The agreement by Elan to extend the license on a worldwide basis if the shareholders approved the exchange of the $12.015 million promissory note for convertible preferred stock.



•

The agreement by Elan to provide a grant of $500,000 toward development of Bioject's jet injection technology in a pre-filled application.

    Final closing agreements were signed among the Company, Elan and the Company's new subsidiary on October 15, 1997. On that date, the $3 million investment in the Company was made by Elan and approximately 545,000 shares of common stock and a warrant to purchase 350,000 shares at $12.50 per share were issued. Elan loaned Bioject $12.015 million which Bioject transferred to the new subsidiary in exchange for 801,000 shares of the subsidiary's common stock. Elan invested $2.985 million in the new subsidiary in exchange for 199,000 shares of the subsidiary's common stock. The new subsidiary paid $15 million to Elan as its initial payment on the licensing agreement.

    In February 1998, the Company's shareholders approved the exchange of the long-term promissory note plus accrued interest for Series A and Series B Convertible Preferred Stock and the issuance to Elan of Series C Convertible Preferred Stock or other similar convertible preferred stock to fund Marathon Medical's development work. Accordingly, on March 2, 1998, a total of 692,694 shares of Series A Convertible Preferred Stock and 134,333 shares of Series B Convertible Preferred Stock were issued to Elan and the promissory note was cancelled.

    As of September 30, 1997, the Company recorded an expense of $15 million related to acquired in-process research and development expenditures. Such expense related to the blood glucose monitoring technology that had not yet established technological feasibility and at that time had no alternate future uses. Accounting rules required that such costs be charged to expense as incurred.

    In March 1999, the Company issued 391,830 shares of Series C Preferred Stock to Elan for $2.4 million to continue to fund the development of the blood glucose monitoring technology.

    In May 1999, rather than continue to fund the cost of its development, the Company entered into negotiations to sell Marathon's blood glucose monitoring technology, and certain fixed assets related to developing the technology, to a third party. The sale was completed on June 30, 1999. The gross proceeds of the sale were $4 million. The gain realized on the sale was approximately $2.9 million, net of associated expenses of the transaction and a $500,000 provision for expenses to wind-up Marathon's operations. Accordingly, Marathon's assets, liabilities, loss from operations, gain on sale and cash flows are reported as Discontinued Operations in the accompanying financial statements.

    In connection with the sale the Company's purchase of Elan's interest in Marathon at June 30, 1999, the Company and Elan agreed to certain changes in the terms of Elan's Series A and Series B Convertible Preferred Stock ("Series A Stock" and "Series B Stock"). The modified terms fixed the conversion price of the Series A Stock at $7.50, eliminating a prior provision that, in certain circumstances, allowed the Series A Stock to be converted at 80% of the then current fair market value of the Company's stock, if

10

such value was less than $7.50. The terms were also modified to give the Company the right to redeem the Series A Stock for cash within ninety days of receiving notice of the intent to redeem all or part of the Series A Stock into common stock of the Company. The redemption price is the original issuance price of the Series A Stock being converted plus accumulated preferred stock dividends thereon from the date of issuance of the Series A Stock. Elan also exchanged its Series B Convertible Preferred Stock ("Series B Stock"), which would have been convertible into a minimum of 268,000 shares of the Company's common stock without additional cash payments, for a Warrant that expires June 30, 2006 (the "Warrant"), to purchase 758,000 shares of Bioject's common stock for $7.50 per share. The Company has the right to redeem the Warrant if it is exercised prior to June 30, 2004. Under the redemption provisions, if Elan notifies the Company that it intends to exercise all or any part of the Warrant to acquire stock in the Company, the Company has the right to redeem the Warrant by paying Elan cash of $2.015 million, the original issuance price of the Series B Stock, plus accrued interest at 15%, compounded semi-annually from June 30, 1999. If Elan chooses to exercise less than all of the shares covered by the Warrant, Bioject may exercise its redemption right either for all of the shares covered by the warrant or for only that portion being exercised, in which case the payment is prorated in proportion to the portion of the warrant being exercised.

    The terms of the sale of the blood glucose monitoring technology also provide for the Company to receive a royalty on net sales of future products, if any, which may be developed in the future from the licensed technology. The agreement calls for a royalty of three percent of net sales until the Company has received total royalty payments of $10 million. The agreement then calls for a royalty of one percent of net sales thereafter. There can be no assurance that future products will be successfully developed from the blood glucose monitoring technology or that such products, if developed, will be commercially successful. See Note 3—"Discontinued Operations."

    MERCK & CO.  In July 1998, the Company entered into an agreement with Merck & Co. which provided Merck limited-term rights to use the B-2000 needle-free injection system with selected Merck vaccines. As part of the agreement, the Company also granted Merck exclusive rights to negotiate a long-term license to the B-2000 for certain medical indications. The Company received $1.5 million in fees under this agreement in the year ended March 31, 1999. In February 1999, citing a refinement in its vaccine development strategy, Merck advised the Company that it would not continue discussions to seek long-term license rights to the Company's technology.

    AMGEN INC.  In June 1999, the Company entered into a binding letter agreement, which provided for an evaluation of Bioject's jet injection technology for use with certain biopharmaceutical products. Terms of the agreement provided for up to $500,000 in licensing and technology fees based upon meeting certain milestones. Based upon achievement of the milestones per the binding letter agreement, the Company recorded revenue of $500,000 during fiscal 2000.

    On February 29, 2000, after successful completion of the milestones mentioned above, Amgen and the Company entered into a clinical development and supply agreement. In connection with the agreement, Amgen made a $1.5 million equity investment for 65,796 shares of Bioject's common stock on mutually agreed terms. Amgen received an exclusive license to the Iject technology for the delivery of Amgen products for two indications. Amgen also received options to further license the technology for delivery of certain other Amgen products for other indications.

11

    The agreement includes up to $3.1 million in future payments to Bioject, including payments linked to developmental milestones, option payments to include other Amgen drugs in the current agreement, and payments to support ongoing product development, clinical supplies, and tooling expenses. Payments in connection with the product development support are recorded using the percentage of completion method. Additional milestone payments will be recognized when achieved. In addition, the agreement outlines a potential future commercial supply agreement under which Bioject would provide Amgen with customized Iject systems.

    ANGIOSENSE INC.  In October 1999, Bioject announced a strategic alliance with AngioSense, Inc. to jointly develop innovative delivery systems to treat cardiovascular disease. Bioject's needle-free drug delivery systems will be modified for delivering bio-therapeutic solutions as a surgical instrument for minimally invasive surgical procedures with several proprietary catheters being developed by AngioSense for catheter-based cardiology interventions.

    The alliance grants AngioSense an exclusive license to Bioject's Biojector 2000® and Vitajet 3® jet injectors, as well as a customized version of Bioject's Iject, a single-use disposable jet injector with a self-contained, pre-filled medication cartridge to treat or diagnose cardiac or cardiovascular diseases. According to the terms of the agreement, Bioject received an equity position of approximately 10 percent in AngioSense upon completion of certain product development milestones. Bioject accomplished those milestones as of December 31, 1999. Since Angiosense is a start-up company and in the research and development phase and has not released a product on the market, the Company has not recorded an asset on the balance sheet to account for the equity interest due to significant uncertainties surrounding valuation and realization. In addition to a long-term manufacturing and supply agreement with AngioSense, Bioject will receive royalties on future product sales. Bioject will also receive significant funding to support the development of the disposable injector portion of the AngioSense delivery system. To date, the terms of the funding have yet to be mutually determined by the joint development team. At the time that the joint development team has determined the funding, it will then be accounted for on the percentage of completion method.

    ARES-SERONO, INC.  In December 1999, Bioject and Serono Laboratories, Inc., the U.S. affiliate of Ares-Serono, S.A., a leading biotechnology company headquartered in Geneva, Switzerland, announced an exclusive license agreement in the U.S. and Canada to deliver Serono's Saizen® recombinant human growth hormone with a customized version of Bioject's Vitajet™ 3 needle-free delivery system. In connection with the agreement, Serono paid a license fee to Bioject and signed a definitive supply agreement that commences upon FDA clearance. The license fee is being recognized over the term of the agreement.

INCOME TAXES

    The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting For Income Taxes (SFAS 109). Under the liability method specified by SFAS 109, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates for the years in which the taxes are expected to be paid. At March 31, 2000, the Company had total deferred tax assets of approximately $22 million, consisting principally of available net operating loss carryforwards. No benefit for these operating losses has been reflected in the accompanying financial statements as they do

12

not satisfy the recognition criteria set forth in SFAS 109. Total deferred tax liabilities were insignificant as of March 31, 1999.

    As of March 31, 2000, the Company has net operating loss carryforwards of approximately $49.3 million available to reduce future federal taxable income, which expire in 2001 through 2020. Approximately $3.3 million of the Company's carryforwards were generated as a result of deductions related to exercises of stock options. When utilized, this portion of the Company's carryforwards, as tax effected, will be accounted for as a direct increase to contributed capital rather than as a reduction of that year's provision for income taxes. The principal differences between net operating loss carryforwards for tax purposes and the accumulated deficit result from capitalization of certain start-up costs and deductions related to the exercise of stock options for income tax purposes.

USE OF ESTIMATES

    The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

    Certain reclassifications have been made to the prior years' expenses to conform to the current year's presentation.

COMPREHENSIVE INCOME REPORTING

    In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). This statement establishes standards for reporting and displaying comprehensive income and its components in a full set of general purpose financial statements. The objective of SFAS 130 is to report a measure of all changes in the equity of an enterprise that result from transactions and other economic events of the period other than transactions with owners. The Company adopted SFAS 130 during the first quarter of fiscal 1999. Comprehensive loss did not differ from currently reported net loss in the periods presented.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

    In June 1999, the FASB issued Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 137"). SFAS 137 is an amendment to Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 137 establishes accounting and reporting standards for all derivative instruments. SFAS 137 is effective for fiscal years beginning after June 15, 2000. The Company does not currently have any derivative instruments and, accordingly, does not expect the adoption of SFAS 137 to have an impact on its financial position or results of operations.

NET LOSS PER SHARE

    Basic earnings per common share is computed using the weighted average number of shares of common stock outstanding for the period. Diluted earnings per common share is computed using the

13

weighted average number of shares of common stock and dilutive common equivalent shares outstanding during the year. Common equivalent shares from stock options and other common stock equivalents are excluded from the computation when their effect is antidilutive.

    The Company was in a loss position for all periods presented and, accordingly there is no difference between basic EPS and diluted EPS since the common stock equivalents and the effect of convertible preferred stock under the "if-converted" method would be antidilutive.

    Potentially dilutive securities that were not included in the diluted net loss per share calculations because they would be antidilutive are as follows:

		Year Ended March 31,
		2000	1999	1998
Stock options and warrants		2,412,061	1,701,720	2,315,699
Convertible preferred stock		2,447,077	2,575,569	1,654,054
	Total	4,859,138	4,277,289	3,969,753

STOCK SPLIT

    All share and per share amounts in the accompanying consolidated financial statements and footnotes have been retroactively adjusted for a 1:5 reverse stock split which was effective October 13, 1999.

3.  DISCONTINUED OPERATIONS:

    In May 1999, rather than continue to fund the cost of its development, the Company entered into negotiations to sell Marathon's blood glucose monitoring technology, and certain fixed assets related to developing the technology, to a third party. The sale was completed on June 30, 1999. The gross proceeds of the sale were $4.0 million. The gain realized on the sale was approximately $2.9 million, net of associated expenses of the transaction and a $500,000 provision for expenses to wind-up Marathon's operations. Accordingly, Marathon's assets, loss from operations, gain on sale and cash flows are reported as Discontinued Operations in the accompanying financial statements.

4.  401(K) RETIREMENT BENEFIT PLAN:

    The Company has a 401(k) Retirement Benefit Plan for its employees. All employees, subject to certain age and length of service requirements, are eligible to participate. The plan permits certain voluntary employee contributions to be excluded from the employees' current taxable income under provisions of the Internal Revenue Code Section 401(k) and regulations thereunder. Effective January 1, 1996, the Company amended the plan to provide for voluntary employer matches of employee contributions up to 6% of salary and for discretionary profit sharing contributions to all employees. Such employer matches and contributions may be either in cash or Company common stock. For calendar 1998, 1999 and 2000, the Company agreed to match 37.5% of employee contributions up to 6% of salary with Company stock. Effective April 1, 2000 the Company has agreed to match 50.0% of employee contributions up to 6% of salary with Company stock. In fiscal 2000, 1999, and 1998, the Company recorded an expense of $25,642, $29,884, and $21,755, respectively, related to voluntary employer matches under the 401(k) Plan. The Board of Directors has reserved up to 40,000 shares of common stock for these voluntary employer

14

matches, of which 8,526 shares have been issued and 23,351 shares have been committed through March 31, 2000.

5.  SHAREHOLDERS' EQUITY:

PREFERRED STOCK

    The Company has authorized 10 million shares of preferred stock to be issued from time to time with such designations and preferences and other special rights and qualifications, limitations and restrictions thereon, as permitted by law and as fixed from time to time by resolution of the Board of Directors. At March 31, 2000, the Company had preferred stock authorized and outstanding as follows (see also Note 2):

Series A Convertible Preferred Stock.  Series A Convertible Preferred Stock ("Series A Stock") accumulates dividends at 9% per annum, compounded semi-annually, payable in additional Series A Convertible Preferred Stock. In connection with the Company's purchase of Elan's interest in Marathon at June 30, 1999, the Company and Elan agreed to certain changes in the terms of Elan's Series A Stock. The modified terms fixed the conversion price of the Series A Stock at $7.50, eliminating a prior provision that, in certain circumstances, allowed the Series A Stock to be converted at 80% of the then current fair market value of the Company's stock, if such value was less than $7.50. The terms were also modified to give the Company the right to redeem the Series A Stock for cash within ninety days of receiving notice of the intent to redeem all or part of the Series A Stock into common stock of the Company. The redemption price is the original issuance price of the Series A Stock being converted plus accumulated preferred stock dividends thereon from the date of issuance of the Series A Stock. The Series A Convertible Preferred Stock has preference in liquidation to the common stock of the Company. A total of 692,694 shares with an original issuance value of $15.00 per share were issued.

Series B Preferred Stock.  In connection with the Company's purchase of Elan's interest in Marathon, the Company and Elan agreed to certain changes in Elan's equity holdings in the Company. Elan exchanged its Series B Convertible Preferred Stock ("Series B Stock"), which would have been convertible into a minimum of 268,000 shares of the Company's common stock without additional cash payments, for a Warrant that expires June 30, 2006 (the "Warrant"), to purchase 758,000 shares of Bioject's common stock for $7.50 per share. The Company has the right to redeem the Warrant if it is exercised prior to June 30, 2004. Under the redemption provisions, if Elan notifies the Company that it intends to exercise all or any part of the Warrant to acquire stock in the Company, the Company has the right to redeem the Warrant by paying Elan cash of $2.015 million, the original issuance price of the Series B Stock, plus accrued interest at 15%, compounded semi-annually from June 30, 1999. If Elan chooses to exercise less than all of the shares covered by the Warrant, Bioject may exercise its redemption right either for all of the shares covered by the warrant or for only that portion being exercised, in which case the payment is prorated in proportion to the portion of the warrant being exercised.

Series C Convertible Preferred Stock.  Series C Convertible Preferred Stock ("Series C Stock") has all of the rights and preferences of the Series A Stock including optional conversion, optional redemption and mandatory conversion except that it does not accrue a mandatory dividend. It participates in any dividends paid pro rata with the common shareholders. Its issuance price is equal to ten times market value at the time it was issued. Its conversion price was equal to one-tenth of its issuance price. A total of 391,830 shares of Series C Stock with an original issuance value of $6.125 per share were issued and outstanding at March 31, 2000.

15

COMMON STOCK

    Holders of common stock are entitled to one vote for each share of record held on all matters to be voted on by shareholders. No shares have been issued subject to assessment, and there are no preemptive or conversion rights and no provision for redemption, purchase or cancellation, surrender or sinking or purchase funds. Holders of common stock are not entitled to cumulate their shares in the election of directors.

    All share and per share amounts in the accompanying consolidated financial statements and footnotes have been retroactively adjusted for a 1:5 reverse stock split which was effective October 13, 1999.

STOCK OPTIONS

    Options may be granted to directors, officers and employees of the Company by the Board of Directors under terms of the Bioject Medical Technologies Inc. 1992 Stock Incentive Plan (the "Plan"), which was approved by the Company's shareholders on November 20, 1992 and adopted by the Board effective December 17, 1992. Under the terms of the Plan, eligible employees may receive statutory and nonstatutory stock options, stock bonuses and stock appreciation rights for purchase of shares of the Company's common stock at prices and vesting as determined by a committee of the Board. Except for options whose terms were extended, options granted under a prior plan maintain their previous option price, vesting and expiration dates. As amended in fiscal 1999 and 2000, a total of up to 1,050,000 shares of the Company's common stock, including options outstanding at the date of initial shareholder approval of the Plan, may be granted under the Plan. Options outstanding at March 31, 2000, will expire through September 2007.

    At March 31, 2000, the Company had options covering 70,299 shares of its common stock available for grant and 803,386 shares of common stock reserved for issuance pursuant to stock option exercises.

    Stock option activity is summarized as follows:

		Shares Subject to Options		Weighted Average Exercise Price Per Share
Balances, March 31, 1997		386,312		$	12.31
	Options granted	417,328			3.61
	Options exercised	(27,220	)		5.69
	Options cancelled or expired	(313,436	)		13.33
Balances, March 31, 1998		462,984			4.16
	Options granted	68,215			6.80
	Options exercised	(71,627	)		4.56
	Options cancelled or expired	(22,124	)		5.53
Balances, March 31, 1999		437,448			4.44
	Options granted	396,222			8.04
	Options exercised	(51,273	)		4.07
	Options cancelled or expired	(49,310	)		6.28
Balances, March 31, 2000		733,087		$	6.29

16

    The following table summarizes information about stock options outstanding at March 31, 2000:

Options Outstanding
			Weighted Average Remaining Contractual Life (years)			Options Exercisable
Range of Exercise Prices		Number		Weighted Average Exercise Price		Number of Shares Exercisable	Weighted Average Exercise Price
$	1.91 - 3.12	142,931	5.35	$	3.05	13,800	$	3.12
	3.13 - 4.99	333,100	4.93		3.66	243,708		3.61
	5.00 - 6.25	35,295	4.54		5.24	34,946		5.23
	6.26 - 12.94	214,761	5.77		12.23	33,987		8.81
	12.95 - 20.47	7,000	0.64		20.47	7,000		20.47
$	1.91 - 20.47	733,087	5.19	$	6.29	333,441	$	4.64

    At March 31, 1999 and 1998, 304,343 and 260,245 options, respectively, were exercisable at weighted average exercise prices of $4.25 per share and $4.55 per share, respectively.

    In October 1995, the Financial Accounting Standards Board issued Statement No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), which establishes a fair value-based method of accounting for stock-based compensation plans and requires additional disclosures for those companies that elect not to adopt the new method of accounting. The Company has elected to continue to account for stock options under APB Opinion No. 25, Accounting for Stock Issued to Employees.

    However, as prescribed by SFAS 123 the Company has computed, for pro forma disclosure purposes, the value of all options granted during fiscal 2000, 1999 and 1998 using the Black-Scholes option pricing model and the following weighted average assumptions:

	Year ended March 31,
	2000	1999	1998
Risk-free interest rate	6%	6%	6%
Expected dividend yield	0%	0%	0%
Expected lives	1.5 years	1.5 years	1.5 years
Volatility	137%	97%	78%

    The total value of options granted during fiscal 2000, 1999 and 1998 totaled $3,186,216, $464,170 and $1,506,818, respectively, and is amortized on a pro forma basis over the vesting period of the options. Options generally vest equally over three years. If the Company had accounted for these plans in

17

accordance with SFAS 123, the Company's net loss and net loss per share would have increased as reflected in the following pro forma amounts:

		Year ended March 31,
(In thousands, except per share amounts)		2000			1999			1998
Net loss:
	As reported	$	(3,081	)	$	(7,076	)	$	(16,630	)
	Pro forma		(3,696	)		(7,378	)		(16,969	)
Basic and diluted loss per share:
	As reported		(0.53	)		(1.25	)		(3.59	)
	Pro forma		(0.68	)		(1.30	)		(3.65	)

    The above determination of pro forma expense has been calculated consistent with SFAS 123 which does not take into consideration limitations on exercisability and transferability imposed by the Company's Stock Incentive Plan. Further, the valuation model is heavily weighted to stock price volatility, even with a declining stock price, which tends to increase the calculated value. The actual value, if any, and, therefore, imputed pro forma expense, will vary based on the exercise date and the market price of the related common stock when sold.

WARRANTS

    Warrant activity is summarized as follows:

		Shares		Exercise Price		Amount
Balances, March 31, 1997		1,206,118		$	4.10-10.00	$	8,438,319
	Warrants issued in a private placement expiring June 2002	295,698			2.50-3.55		1,044,476
	Warrants issued in a private placement expiring September 2002	90,000			4.25-5.50		450,000
	Warrants issued in a private placement expiring October 2002	350,000			12.50		4,375,000
	Warrants issued for services expiring September 2002	26,049			5.50		143,267
	Warrants canceled or expired	(115,151	)		10.00		(1,151,505	)
Balances, March 31, 1998		1,852,714			2.50-12.50		13,299,557
	Warrants issued in 10% reload expiring March 2003	29,570			6.75		199,302
	Warrants exercised	(618,012	)		2.50-5.00		(2,642,221	)
Balances, March 31, 1999		1,264,272			2.50-12.50		10,856,638
	Warrants issued in connection with the Modification of the Elan Agreement, expiring June 2006	774,000			3.13-7.50		5,735,000
	Warrants issued in connection with equity transactions	12,000			2.80-8.36		75,926
	Warrants exercised	(371,298	)		2.80-12.50		(3,172,820	)
Balances, March 31, 2000		1,678,974		$	2.50-8.36	$	13,494,744

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6.  COMMITMENTS:

LEASES

    Bioject has operating leases for its manufacturing, sales and administrative facilities and warehouse facilities with options to renew for an additional five-year term upon expiration. Bioject also leases office equipment under operating leases for periods up to five years. At March 31, 2000, future minimum payments under noncancellable operating leases with terms in excess of one year are as follows:

For the Year Ending March 31,	Facilities		Equipment
2001	$	216,888	$	9,132
2002		108,624		8,501
2003		95,424		3,565
	$	420,936	$	21,198

    Lease expense for the years ended March 31, 2000, 1999 and 1998 totaled $212,000, $232,000 and $255,000 respectively.

7.  RELATED PARTY TRANSACTIONS:

    See Note 3, Discontinued Operations.

8.  QUARTERLY FINANCIAL DATA (UNAUDITED):

    Selected unaudited quarterly financial data for each of the eight quarters in the two-year period ended March 31, 2000 is as follows:

	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
	In thousands, except per share data
Year Ended March 31, 1999
Revenue	$	280		$	1,199		$	939		$	213
Operating expenses		1,124			1,493			1,121			1,667
Loss from continuing operations		(1,167	)		(608	)		(509	)		(1,780	)
Loss from discontinued operations		(986	)		(928	)		(925	)		(173	)
Net loss		(2,153	)		(1,536	)		(1,434	)		(1,953	)
Basic and diluted loss per share from continuing operations		(0.21	)		(0.11	)		(0.09	)		(0.31	)
Basic and diluted loss per share from discontinued operations		(0.18	)		(0.16	)		(0.16	)		(0.03	)
Basic and diluted net loss per share		(0.39	)		(0.27	)		(0.25	)		(0.34	)
Year Ended March 31, 2000
Revenue	$	213		$	581		$	270		$	161
Operating expenses		1,217			1,552			1,320			1,581
Loss from continuing operations		(1,362	)		(1,185	)		(1,269	)		(1,668	)
Gain from discontinued operations		2,403			—			—			—
Net income (loss)		1,041			(1,185	)		(1,269	)		(1,668	)
Basic and diluted loss per share from continuing operations		(0.23	)		(0.20	)		(0.22	)		(0.29	)
Basic and diluted loss per share from discontinued operations		(0.08	)		—			—			—
Basic and diluted gain per share from sale of discontinued operations		0.49			—			—			—
Basic and diluted net income (loss) per share		0.18			(0.20	)		(0.22	)		(0.29	)

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PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

Financial Statements and Schedules

    The Consolidated Financial Statements, together with the report thereon of Arthur Andersen LLP, are included on the pages indicated below:

	Page
Report of Independent Public Accountants	1
Consolidated Balance Sheets as of March 31, 2000 and 1999	2
Consolidated Statements of Operations for the years ended March 31, 2000, 1999 and 1998	3
Consolidated Statements of Shareholders' Equity for the years ended March 31, 2000, 1999 and 1998	4
Consolidated Statements of Cash Flows for the years ended March 31, 2000, 1999 and 1998	5
Notes to Consolidated Financial Statements	6

    There are no schedules required to be filed herewith.

Reports on Form 8-K

    The Company filed one report on Form 8-K during the quarter ended March 31, 2000. The filing on March 3, 2000 was pursuant to Item 5., "Other Events", and regarded an equity investment in the Company which occurred on February 29, 2000.

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Exhibits

    The following exhibits are filed herewith and this list is intended to constitute the exhibit index. An asterisk (*) beside the exhibit number indicates the subset of the exhibits containing each management contract, compensatory plan, or arrangement required to be identified separately in this report.

Exhibit Number		Exhibit Description
3.1		Articles of Incorporation of Bioject Medical Technologies Inc. incorporated by reference to the same exhibit number of the Company's Form 10-K for the year ended January 31, 1993.
3.1.1		Articles of Amendment to the Articles of Incorporation of the Incorporation of the Company incorporated by reference to the same exhibit number of the Company's Form 8-K filed March 6, 1998.
3.1.2		Articles of Amendment to the Articles of Incorporation of the Incorporation of the Company dated September 11, 1998, and filed October 15, 1998, incorporated by reference to the same exhibit number of the Company's Form 8-K filed April 20, 1999.
3.1.3		Articles of Amendment to the Articles of Incorporation of the Incorporation of the Company dated March 18, 1999, and filed March 24, 1999, incorporated by reference to the same exhibit number of the Company's Form 8-K filed April 20, 1999.
3.1.4		Articles of Amendment to the Articles of Incorporation of the Incorporation of the Company dated October 11, 1999, and filed October 12, 1999. Incorporated by reference to the Company's Form 10-Q for the quarter ended September 30, 1999.
3.2		Amended and Restated By-laws of Bioject Medical Technologies Inc. Incorporated by reference to the same exhibit number of the Company's Form 10-Q for the quarter ended September 30, 1994.
10.1	*	Employment Agreement with James C. O'Shea dated October 3, 1995 incorporated by reference to the Company's Form 10-Q for the quarter ended September 30, 1995.
10.2	*	Executive Employment Agreement dated April 17, 1998, between Bioject Medical Technologies Inc., Bioject Inc., and Michael A. Temple. Incorporated by reference to the Company's Form 10-K for the year ended march 31, 1998.
10.3	*	Employment Contract between Bioject JV Subsidiary Inc. and Bradley J. Enegren. Incorporated by reference to the Company's Form 10-Q for the quarter ended September 30, 1998
10.4	*	Confidentiality/Inventions/Noncompetition Agreement between Bioject JV Subsidiary Inc. and Bradley J. Enegren. Incorporated by reference to the Company's Form 10-Q for the quarter ended September 30, 1998.
10.5	*	Amended Employment Agreement between Bioject, Inc. and Joseph Michael Redmond dated February 8, 2000. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 2000 as filed with the Securities and Exchange Commission on June 29, 2000.
10.6	*	Restated 1992 Stock Incentive Plan.
10.7		Lease Agreement dated September 10, 1996 between Bridgeport Woods Business Park and Bioject Inc. for the Portland, Oregon facility. Incorporated by reference to the same exhibit number of the Company's Form  10-Q for the period ended September 30, 1996.
10.8		Lease Extension Agreement dated October 4, 1994, between Earl J. Itel and Loris Itel Trust and Bioject Inc., for the 6000 sq. ft. Tualatin, Oregon warehouse. Incorporated by reference to the Company's Form  10-Q/A for the period ended December 31, 1996.

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10.9	Form of Amended and Restated Registration Rights Agreement between Bioject Medical Technologies Inc. and the participants in the 1995 private placement incorporated by reference to exhibit 4.2 of the Company's Registration Statement on Form S-3 (No. 33-80679).
10.10	Form of Amended and Restated Series "A" Common Stock Purchase Warrant incorporated by reference to exhibit 4.3 of the Company's Registration Statement on Form S-3 (No. 33-80679).
10.11	Form of Amended and Restated Series "C" Common Stock Purchase Warrant incorporated by reference to exhibit 4.5 of the Company's Registration Statement on Form S-3 (No. 33-80679). Confidential treatment has been granted with respect to certain portions of this exhibit pursuant to an Application for Confidential Treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
10.12	Form of Series "D" Common Stock Purchase Warrant. Incorporated by reference to exhibit 4.6 of the Company's form 8-K dated December 11, 1996.
10.13	Form of Series "E" Common Stock Purchase Warrant. Incorporated by reference to exhibit 4.7 of the Company's Form 8-K dated December 11, 1996.
10.14	Form of Series "H" Common Stock Purchase Warrant. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1998.
10.15	Form of Series "I" Common Stock Purchase Warrant. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1998.
10.16	Form of Series "J" Common Stock Purchase Warrant. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1998.
10.17	Series K Warrant to Purchase Shares of Common Stock dated October 15, 1997. Incorporated by reference to the Company's Form 8-K filed October 31, 1997.
10.18	Form of Series "L" Common Stock Purchase Warrant. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1998.
10.19	Form of Series "M" Common Stock Purchase Warrant. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1998.
10.20	Form of Series "N" Common Stock Purchase Warrant. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1998.
10.21	Form of Series "O" Common Stock Purchase Warrant. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1999.
10.22	Form of Registration Rights Agreement between Bioject Medical Technologies Inc. and the participants in the 1996 private placement. Incorporated by reference to exhibit 4.8 of the Company's Form 8-K dated December 11, 1996.
10.23	Form of Registration Rights Agreement between Bioject Medical Technologies Inc. and the participants in the 1997 private placement. Incorporated by reference to the Company's Form 10-K for the year ended March  31, 1997.
10.24	Agreement between Elan Corporation, plc, Elan International Services, Ltd. and Bioject Medical Technologies, Inc. dated September 30, 1997. Incorporated by reference to the Company's Form 8-K filed October  3, 1997. Confidential treatment has been requested with respect to certain portions of this exhibit pursuant to an Application for Confidential Treatment filed with the Commission under Rule 24b-2(b) under the Securities Exchange Act of 1934, as amended.

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10.25	License Agreement between Elan Corporation, plc and Bioject JV Subsidiary Inc. dated October 15, 1997. Incorporated by reference to the Company's Form 8-K/A filed January 22, 1998. Confidential treatment has been granted with respect to certain portions of this exhibit pursuant to an application for Confidential Treatment filed with the Commission under Rule 24b-2(b) under the Securities Exchange Act of 1934, as amended.
10.25.1	Amendment to License Agreement between Elan Corporation, plc and Bioject JV Subsidiary Inc. dated October 15, 1997 incorporated by reference to the Company's Form 8-K filed on November 3, 1997.
10.26	Securities Purchase Agreement between Elan International Services, Ltd. and Bioject Medical Technologies Inc. dated October 15, 1997. Incorporated by reference to the Company's Form 8-K filed November  3, 1997.
10.26.1	Amendment to Securities Purchase Agreement between Elan International Services, Ltd. and Bioject Medical Technologies Inc. dated October 15, 1997 incorporated by reference to the Company's Form 8-K filed on November 3,1997.
10.27	Bioject Medical Technologies Inc. Registration Rights Agreement between Elan International Services, Ltd. and Bioject Medical Technologies Inc. dated October 15, 1997. Incorporated by reference to the Company's Form 8-K filed October 31, 1997.
10.28	Promissory Note dated October 15, 1997 in favor of Elan International Services, Ltd. Incorporated by reference to the Company's Form 8-K filed on November 3, 1997.
10.29	Newco Subscription and Stockholders Agreement between Elan International Services, Ltd., Bioject Medical Technologies Inc. and Bioject JV Subsidiary Inc. dated October 15, 1997. Incorporated by Reference to the Company's Form 8-K/A filed January 22, 1998.
10.29.1	Amendment to Newco Subscription and Stockholders Agreement between Elan International Services, Ltd., Bioject Medical Technologies Inc. and Bioject JV Subsidiary Inc. dated October 15, 1997 incorporated by reference to the Company's Form 8-K filed on November 3, 1997.
10.30	Bioject JV Subsidiary Inc. Registration Rights Agreement between Elan International Services, Ltd. and Bioject JV Subsidiary Inc. dated October 15, 1997. Incorporated by reference to the Company's Form  8-K filed November 3, 1997.
10.31	Asset Purchase Agreement among Bioject Medical Technologies, Inc. Vitajet Corporation and Sergio Landau and Mara C. Landau dated March 23, 1998. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1998.
10.32	Supply and Option Agreement between Merck & Co., Inc. and Bioject Medical Technologies Inc., effective as of June 8, 1998. Confidential treatment has been requested with respect to certain portions of this exhibit pursuant to an Application for Confidential Treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1999.
10.33	Collaborative Alliance Agreement between GeneMedicine, Inc. and Bioject, Inc., made as of June 26, 1998. Confidential treatment has been requested with respect to certain portions of this exhibit pursuant to an Application for Confidential Treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1999.

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10.34	License and Distribution Agreement dated December 21, 1999 between Bioject, Inc. and Serono Laboratories, Inc. (An application for confidential treatment has been submitted to the SEC pursuant to Rule  24b-2 under the Securities Exchange Act of 1934, as amended. Confidential portions have been omitted and filed separately with the SEC.) Incorporated by reference to the Company's Form 10-Q for the quarter ended December 31, 1999.
10.34.1	Amendment dated March 15, 2000 to License and Distribution Agreement dated December 21, 1999 between Bioject, Inc. and Serono Laboratories, Inc. Incorporated by reference to the Company's Form  10-K for the year ended March 31, 2000 as filed with the Securities and Exchange Commission on June 29, 2000.
10.35	License and Development Agreement dated February 29, 2000 between Bioject Inc. and Amgen Inc. Confidential treatment has been requested with respect to certain portions of this exhibit pursuant to an Application for Confidential Treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
10.36	Form of Series R Common Stock Purchase Warrant. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 2000 as filed with the Securities and Exchange Commission on June 29, 2000.
10.37	Form of Registration Rights Agreement for Series R Common Stock, dated December 1, 1999. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 2000 as filed with the Securities and Exchange Commission on June 29, 2000.
10.38	Stock Purchase Agreement dated February 29, 2000 between Bioject Medical Technologies Inc. and Amgen Inc. Incorporated by reference to the Company's Registration Statement on Form S-3 (Registration No.  333-32848) filed March 20, 2000.
21	List of Subsidiaries. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 1999.
23	Consent of Independent Public Accountants
27	Financial Data Schedule. Incorporated by reference to the Company's Form 10-K for the year ended March 31, 2000 as filed with the Securities and Exchange Commission on June 29, 2000.

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SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Bioject Medical Technologies Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on August 3, 2000:

BIOJECT MEDICAL TECHNOLOGIES INC. (Registrant)
By:	/s/ JAMES C. O'SHEA James C. O'Shea Chairman of the Board, President and Chief Executive Officer

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Documents Incorporated by Reference
PART II
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
SIGNATURES

EX-10.6

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EXHIBIT 10.6

BIOJECT MEDICAL TECHNOLOGIES INC.
RESTATED 1992 STOCK INCENTIVE PLAN

    As Amended as of March 9, 2000

    1.  Purpose.  The purpose of this Restated 1992 Stock Incentive Plan (the "Plan") is to enable Bioject Medical Technologies Inc., an Oregon corporation (the "Company"), to attract and retain the services of (a) selected employees, officers and directors of the Company or of any parent or subsidiary corporation of the Company, and (b) selected nonemployee agents, consultants, advisers and independent contractors of the Company or any parent or subsidiary.

    2.  Shares Subject to the Plan.  Subject to adjustment as provided below and in paragraph 11, up to 1,050,000 shares of Common Stock of the Company (the "Shares") shall be offered and issued under the Plan. No more than 900,000 of such Shares offered and issued under the Plan may be offered and issued pursuant to (a) grants of Incentive Stock Options as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and (b) grants to directors or officers of the Company. If an option or a stock appreciation right granted under the Plan expires, terminates or is cancelled, the unissued Shares subject to such option or stock appreciation right shall again be available under the Plan. If Shares sold or awarded as a bonus under the Plan are forfeited to the Company or repurchased by the Company, the number of Shares forfeited or repurchased shall again be available under the Plan.

    3.  Effective Date and Duration of Plan.

    (a)  Effective Date.  The Plan shall become effective when adopted by the Board of Directors of the Company (the "Board"). However, no option granted under the Plan shall become exercisable until the Plan is approved by the affirmative vote of the holders of a majority of the Common Stock of the Company represented at a shareholder meeting at which a quorum is present, and any such awards under the Plan prior to such approval shall be conditioned on and subject to such approval. Subject to this limitation, options and stock appreciation rights may be granted and Shares may be awarded as bonuses or sold under the Plan at any time after the effective date and before termination of the Plan.

    (b)  Duration.  No options or stock appreciation rights may be granted under the Plan, no stock bonuses may be awarded under the Plan, and no Shares may be sold pursuant to paragraph 8 of the Plan on or after July 29, 2002. However, the Plan shall continue in effect until all Shares available for issuance under the Plan have been issued and all restrictions on such Shares have lapsed. The Board may suspend or terminate the Plan at any time, except with respect to options, stock appreciation rights and Shares subject to restrictions then outstanding under the Plan. Termination shall not affect any outstanding options, stock appreciation rights, any right of the Company to repurchase Shares or the forfeitability of Shares issued under the Plan.

    4.  Administration.

    (a)The Plan shall be administered by a committee appointed by the Board consisting of not less than two directors (the "Committee"). The Committee shall determine and designate from time to time the individuals to whom awards shall be made, the amount of the awards, and the other terms and conditions of the awards; provided, however, that only the Board may amend or terminate the Plan as provided in paragraphs 3 and 14. At any time when the officers and directors of the Company are subject to Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), the Committee shall consist solely of "non-employee" directors as such term is defined from time to time in SEC Rule 16b-3(b)(3)(i) or successor rule. No member of the Committee shall be eligible to receive any award under the Plan while such person serves as a Committee member, except pursuant to paragraph 10.

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    (b)Subject to the provisions of the Plan, the Committee may from time to time adopt and amend rules and regulations relating to administration of the Plan, advance the lapse of any waiting period, accelerate any vesting or exercise date, waive or modify any restriction applicable to Shares (except those restrictions imposed by law) and make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan. The interpretation and construction of the provisions of the Plan and related agreements by the Committee shall be final and conclusive. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect, and it shall be the sole and final judge of such expediency.

    5.  Types of Awards; Eligibility.  The Committee may, from time to time, take the following actions under the Plan: (i) grant Incentive Stock Options, as provided in paragraph 6(b); (ii) grant options other than Incentive Stock Options ("Nonstatutory Stock Options") as provided in paragraph 6(c); (iii) award stock bonuses as provided in paragraph 7; (iv) sell Shares as provided in paragraph 8; and (v) grant stock appreciation rights as provided in paragraph 9. Any such awards may be made to employees (including employees who are officers or directors) of the Company or of any parent or subsidiary corporation of the Company, and to other individuals described in paragraph 1 who the Committee believes have made or will make an important contribution to the Company or its parent or subsidiaries; provided, however, that only employees of the Company or a parent or subsidiary shall be eligible to receive Incentive Stock Options under the Plan, and, provided further, that directors who are not employees shall receive awards only pursuant to paragraph 10. The Committee shall select the individuals to whom awards shall be made and shall specify the action taken with respect to each individual to whom an award is made under the Plan. At the discretion of the Committee, an individual may be given an election to surrender an award in exchange for the grant of a new award.

    6.  Option Grants

    (a)  Grant.  Each option granted under the Plan shall be evidenced by a stock option agreement in such form as the Committee shall prescribe from time to time in accordance with the Plan. With respect to each option grant, the Committee shall determine the number of Shares subject to the option, the option price, the period of the option, and the time or times at which the option may be exercised and whether the option is an Incentive Stock Option or a Nonstatutory Stock Option.

    (b)  Incentive Stock Options.  Incentive Stock Options granted under the Plan shall be subject to the following terms and conditions:

     (i) No employee may be granted Incentive Stock Options under the Plan such that the aggregate fair market value, on the date of grant, of the Shares with respect to which Incentive Stock Options are exercisable for the first time by that employee during any calendar year under the Plan and under any other incentive stock option plan (within the meaning of Section 422 of the Code) of the Company or of any parent or subsidiary corporation of the Company exceeds $100,000.

    (ii) An Incentive Stock Option may be granted under the Plan to an employee possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any parent or subsidiary corporation of the Company only if the option price is at least 110 percent of the fair market value, as described in paragraph 6(b)(iv), of the Shares subject to the option on the date it is granted, and the option by its terms is not exercisable more than five years from the date of grant.

    (iii) Subject to paragraphs 6(b)(ii) and 6(d), Incentive Stock Options granted under the Plan shall continue in effect for the period fixed by the Committee, except that no Incentive Stock Option shall be exercisable more than 10 years from the date of grant.

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    (iv) The option price per Share shall be determined by the Committee at the time of grant. Subject to paragraph 6(b)(ii), the option price shall not be less than 100 percent of the fair market value of the Shares covered by the Incentive Stock Option at the date the option is granted. The fair market value shall be deemed to be the average of the closing bid and asked prices for the Common Stock of the Company as reported on the National Association of Securities Dealers, Inc. Automated Quotation System on the day preceding the day the option is granted, or if there has been no sale on that date, on the last preceding date on which a sale occurred, or such other reported value of the Common Stock of the Company as shall be specified by the Committee.

    (v) The Committee may at any time without the consent of the optionee convert an Incentive Stock Option into a Nonstatutory Stock Option.

    (c)  Nonstatutory Stock Options.  Nonstatutory Stock Options shall be subject to the following additional terms and conditions:

     (i) The option price for Nonstatutory Stock Options shall be determined by the Committee at the time of grant. The option price may not be less than 75 percent of the fair market value of the Shares covered by the Nonstatutory Stock Option on the date of grant. The fair market value of the Shares covered by a Nonstatutory Stock Option shall be determined pursuant to paragraph 6(b)(iv).

    (ii) Nonstatutory Stock Options granted under the Plan shall continue in effect for the period fixed by the Committee.

    (d)  Exercise of Options.  Except as provided in paragraphs 6(e) and (f) or as determined by the Committee, no option granted under the Plan may be exercised unless at the time of such exercise the optionee is employed by or in the service of the Company or any parent or subsidiary corporation of the Company and shall have been so employed or have provided such service continuously since the date such option was granted. Absence on leave or on account of illness or disability under rules established by the Committee shall not, however, be deemed an interruption of employment for purposes of the Plan. Unless otherwise determined by the Committee, vesting of options shall not continue during an absence on leave (including an extended illness) or on account of disability. Except as provided in paragraphs 6(f), 11 and 12, options granted under the Plan may vest and be exercised from time to time over the period stated in each option in such amounts and at such times as shall be prescribed by the Committee, provided that options shall not be exercised for fractional shares. Unless otherwise determined by the Committee, if the optionee does not exercise an option in any one year with respect to the full number of Shares to which the optionee is entitled in that year, the optionee's rights shall be cumulative and the optionee may purchase those Shares in any subsequent year during the term of the option.

    (e)  Restrictions on Transfer.  Each option granted under the Plan by its terms shall be nonassignable and nontransferable by the optionee, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the optionee's domicile at the time of death, and each option by its terms shall be exercisable during the optionee's lifetime only by the optionee; provided, however, that, with the consent of the Committee, which consent may be withheld in its sole discretion or conditioned on such requirements as the Committee shall deem appropriate, an officer or director of the Company who is subject to Section 16(b) of the Exchange Act may assign or transfer without consideration all or any portion of a Nonstatutory Stock Option granted under the Plan to such officer's or director's spouse (or former spouse) pursuant to a qualified domestic relations order. The holder of any Nonstatutory Stock Option that has been transferred pursuant to this paragraph 6(e) may be subject to treatment under tax and securities laws with respect to the transferred option which differs from the treatment to which the applicable officer or director was subject with respect to the option prior to the transfer.

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    (f)  Termination of Employment or Service.

     (i) In the event the employment or service of the optionee by the Company or a parent or subsidiary corporation of the Company terminates for any reason other than because of death or physical disability, the option may be exercised at any time prior to the expiration date of the option or the expiration of three months (one year in the case of officers and two years in the case of directors)after the date of such termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of such termination.

    (ii) In the event of the termination of the optionee's employment or service with the Company or a parent or subsidiary corporation of the Company because the optionee becomes disabled (within the meaning of Section 22(e)(3) of the Code), the option may be exercised at any time prior to the expiration date of the option or the expiration of one year after the date of such termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of such termination.

    (iii) In the event of the death of an optionee while employed by or providing service to the Company or a parent or subsidiary corporation of the Company, the option may be exercised at any time prior to the expiration date of the option or the expiration of one year after the date of such death, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option on the date of death, and only by the person or persons to whom such optionee's rights under the option shall pass by the optionee's will or by the laws of descent and distribution of the state or country of domicile at the time of death.

    (iv) The Committee, at the time of grant or at any time thereafter, may extend the three-month and one-year expiration periods any length of time not later than the original expiration date of the option, and may increase the portion of an option that is exercisable, subject to such terms and conditions as the Committee may determine.

    (v) To the extent that the option of any deceased optionee or of any optionee whose employment or service terminates is not exercised within the applicable period, all further rights to purchase Shares pursuant to such option shall cease and terminate.

    (g)  Purchase of Shares.  Unless the Committee determines otherwise, Shares may be acquired pursuant to an option only upon receipt by the Company of notice in writing from the optionee of the optionee's intention to exercise, specifying the number of Shares as to which the optionee desires to exercise the option and the date on which the optionee desires to complete the transaction, and, if required to comply with the Securities Act of 1933, as amended, or state securities laws, the notice shall include a representation that it is the optionee's present intention to acquire the Shares for investment and not with a view to distribution. The certificates representing the Shares shall bear any legends required by the Committee. Unless the Committee determines otherwise, on or before the date specified for completion of the purchase of Shares pursuant to an option, the optionee must have paid the Company the full purchase price of such Shares in cash (including, with the consent of the Committee, cash that may be the proceeds of a loan from the Company), or, with the consent of the Committee, in whole or in part, in Shares valued at fair market value, as determined pursuant to paragraph 6(b)(iv). Unless the Committee determines otherwise, all payments made to the Company in connection with the exercise of an option must be made by a certified or cashier's bank check or by the transfer of immediately available federal funds. No Shares shall be issued until full payment therefor has been made. With the consent of the Committee, an optionee may request the Company to apply automatically the Shares to be received upon the exercise of a portion of a stock option (even though stock certificates have not yet been issued) to satisfy the purchase price for additional portions of the option. Each optionee who has exercised an option shall immediately upon notification of the amount due, if any, pay to the Company in cash amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If additional withholding is or becomes required beyond any amount deposited before delivery of the certificates, the optionee shall pay such

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amount to the Company on demand. If the optionee fails to pay the amount demanded, the Company or any parent or subsidiary corporation of the Company may withhold that amount from other amounts payable to the optionee by the Company or the parent or subsidiary corporation, including salary, subject to applicable law. With the consent of the Committee, an optionee may deliver Shares to the Company to satisfy the withholding obligation.

    7.  Stock Bonuses.  The Committee may award Shares under the Plan as stock bonuses. Shares awarded as a stock bonus shall be subject to such terms, conditions, and restrictions as shall be determined by the Committee, all of which shall be evidenced in a writing signed by the recipient prior to receiving the bonus Shares. The Committee may not require the recipient to pay any monetary consideration other than amounts necessary to satisfy tax withholding requirements. The certificates representing the Shares awarded shall bear any legends required by the Committee. The Company may require any recipient of a stock bonus to pay to the Company in cash upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the recipient fails to pay the amount demanded, the Company or any parent or subsidiary corporation of the Company may withhold that amount from other amounts payable to the recipient by the Company or the parent or subsidiary corporation, including salary, subject to applicable law. With the consent of the Committee, a recipient may deliver Shares to the Company to satisfy the withholding obligation.

    8.  Stock Sales.  The Committee may issue Shares under the Plan for such consideration (including promissory notes and services) as determined by the Committee, provided that in no event shall the consideration be less than 75 percent of the fair market value of the Shares at the time of issuance, determined pursuant to paragraph 6(b)(iv). Shares issued under this paragraph 8 shall be subject to the terms, conditions and restrictions determined by the Committee. The restrictions may include restrictions concerning transferability, repurchase by the Company and forfeiture of the Shares issued, together with such other restrictions as may be determined by the Committee. The certificates representing the Shares shall bear any legends required by the Committee. The Company may require any purchaser of stock issued under this paragraph 8 to pay to the Company in cash upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the purchaser fails to pay the amount demanded, the Company or any parent or subsidiary corporation of the Company may withhold that amount from other amounts payable to the purchaser by the Company or any parent or subsidiary corporation, including salary, subject to applicable law. With the consent of the Committee, a purchaser may deliver Shares to the Company to satisfy the withholding obligation.

    9.  Stock Appreciation Rights.

    (a)  Grant.  Stock appreciation rights may be granted under the Plan by the Committee, subject to such rules, terms, and conditions as the Committee prescribes.

    (b)  Exercise.

     (i) A stock appreciation right shall be exercisable only at the time or times established by the Committee. If a stock appreciation right is granted in connection with an option, the stock appreciation right shall be exercisable only to the extent and on the same conditions that the related option could be exercised. Upon exercise of a stock appreciation right, any option or portion thereof to which the stock appreciation right relates terminates. If a stock appreciation right is granted in connection with an option, upon exercise of the option, the stock appreciation right or portion thereof to which the option relates terminates.

    (ii) The Committee may withdraw any stock appreciation right granted under the Plan at any time and may impose any conditions upon the exercise of a stock appreciation right or adopt rules and regulations from time to time affecting the rights of holders of stock appreciation rights. Such rules and regulations may govern the right to exercise stock appreciation rights granted

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before adoption or amendment of such rules and regulations as well as stock appreciation rights granted thereafter.

    (iii) Each stock appreciation right shall entitle the holder, upon exercise, to receive from the Company in exchange therefor an amount equal in value to the excess of the fair market value on the date of exercise of one Share over its fair market value on the date of grant (or, in the case of a stock appreciation right granted in connection with an option, the option price per Share under the option to which the stock appreciation right relates), multiplied by the number of Shares covered by the stock appreciation right or the option, or portion thereof, that is surrendered. No stock appreciation right shall be exercisable at a time that the amount determined under this subparagraph is negative. Payment by the Company upon exercise of a stock appreciation right may be made in Shares valued at fair market value, in cash, or partly in Shares and partly in cash, all as determined by the Committee.

    (iv) For purposes of this paragraph 9, the fair market value of the Shares shall be determined pursuant to paragraph 6(b)(iv), on the trading day preceding the date the stock appreciation right is exercised.

    (v) No fractional Shares shall be issued upon exercise of a stock appreciation right. In lieu thereof, cash may be paid in an amount equal to the value of the fraction or, if the Committee shall determine, the number of Shares may be rounded downward to the next whole Share.

    (vi) Each participant who has exercised a stock appreciation right shall, upon notification of the amount due, pay to the Company in cash amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the participant fails to pay the amount demanded, the Company or any parent or subsidiary corporation of the Company may withhold that amount from other amounts payable to the participant by the Company or any parent or subsidiary corporation, including salary, subject to applicable law. With the consent of the Committee, a participant may satisfy this obligation, in whole or in part, by having the Company withhold from any Shares to be issued upon the exercise that number of Shares that would satisfy the withholding amount due or by delivering Shares to the Company to satisfy the withholding amount.

   (vii) Upon the exercise of a stock appreciation right for Shares, the number of Shares reserved for issuance under the Plan shall be reduced by the number of Shares issued. Cash payments of stock appreciation rights shall not reduce the number of Shares reserved for issuance under the Plan.

    10.  Option Grants to Non-Employee Directors.

    (a)  Automatic Grants.  Immediately after the close of each annual shareholder meeting (commencing with the 1993 annual meeting), each person then serving as a Non-Employee Director, including any such person who is elected at such meeting, shall automatically be granted a Nonstatutory Stock Option to purchase 3,500 Shares. For purposes of this paragraph, a "Non-Employee Director" is a director of the Company who is not an employee of the Company or of any parent or subsidiary corporation of the Company on the date the option is granted.

    (b)  Terms of Options.  The exercise price for options granted under this paragraph 10 shall be the fair market value of the Shares on the date of grant, determined pursuant to paragraph 6(b)(iv). Each such option shall have an eight-year term from the date of grant, unless earlier terminated as provided in paragraph 6(f), and shall vest and become exercisable with respect to 1,750 shares six months after the date of grant, with the remaining 1,750 shares vesting and becoming exercisable on the first anniversary of the date of grant.

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    11.  Changes in Capital Structure.  If the outstanding shares of Common Stock of the Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of any recapitalization, reclassification, stock split, combination of shares or dividend payable in shares, the Committee shall make appropriate adjustments (i) in the number and kind of shares available for awards under the Plan; and (ii) in the number and kind of shares as to which outstanding options and stock appreciation rights, or portions thereof then unexercised, shall be exercisable, so that the participant's proportionate interest before and after the occurrence of the event is maintained, provided that this paragraph 11 shall not apply with respect to transactions referred to in paragraph 12. The Committee may also require that any securities issued in respect of or exchanged for Shares issued hereunder that are subject to restrictions be subject to similar restrictions. Notwithstanding the foregoing, the Committee shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Committee. Any such adjustment made by the Committee shall be conclusive.

    12.  Effect of Reorganization or Liquidation.

    (a)  Cash, Stock or Other Property for Stock.  Except as provided in paragraph 12(b), upon a merger, consolidation, reorganization, plan of exchange or liquidation involving the Company, as a result of which the shareholders of the Company receive cash, stock or other property in exchange for or in connection with their Common Stock (any such transaction to be referred to in this paragraph 12 as an "Accelerating Event"), any option or stock appreciation right granted hereunder shall terminate, but the optionee shall have the right during a 30-day period immediately prior to any such Accelerating Event to exercise his or her option or stock appreciation right, in whole or in part, without any limitation with respect to vesting or exercisability

    (b)  Stock for Stock.  If the shareholders of the Company receive capital stock of another corporation ("Exchange Stock") in exchange for their Common Stock in any transaction involving a merger, consolidation, reorganization, or plan of exchange, all options granted hereunder shall be converted into options to purchase shares of Exchange Stock and all stock appreciation rights granted hereunder shall be converted into stock appreciation rights measured by the Exchange Stock, unless the Committee, in its sole discretion, determines that any or all such options or stock appreciation rights granted hereunder shall not be converted, but instead shall terminate in accordance with the provisions of paragraph 12(a). The amount and price of converted options and stock appreciation rights shall be determined by adjusting the amount and price of the options or stock appreciation rights granted hereunder to take into account the relative values of the Exchange Stock and the Common Stock in the transaction.

    (c) The rights set forth in this paragraph 12 shall be transferable only to the extent the related option or stock appreciation right is transferable.

    13.  Corporate Mergers, Acquisitions, Etc.  The Committee may also grant options, grant stock appreciation rights, award stock bonuses and sell stock under the Plan having terms, conditions and provisions that vary from those specified in the Plan; provided that any such awards are granted in substitution for, or in connection with the assumption of, existing options, stock appreciation rights, stock bonuses and stock sold or awarded by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation to which the Company or a parent or subsidiary corporation of the Company is a party.

    14.  Amendment of Plan.  The Board may at any time, and from time to time, modify or amend the Plan in such respects as it shall deem advisable because of changes in the law while the Plan is in effect or for any other reason. Except as provided in paragraphs 6(b)(v), 11, 12 and 13, however, no change in an award already granted shall be made without the written consent of the holder of such award.

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    15.  Approvals.  The obligations of the Company under the Plan are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter. The Company shall not be obligated to issue or deliver Shares under the Plan if such issuance or delivery would violate applicable state or federal securities laws, or if compliance with such laws would, in the opinion of the Company, be unduly burdensome or require the disclosure of information which would not be in the Company's best interests.

    16.  Employment and Service Rights.  Nothing in the Plan or any award pursuant to the Plan shall (i) confer upon any employee any right to be continued in the employment of the Company or any parent or subsidiary corporation of the Company or shall interfere in any way with the right of the Company or any parent or subsidiary corporation of the Company by whom such employee is employed to terminate such employee's employment at any time, for any reason, with or without cause, or to increase or decrease such employee's compensation or benefits; or (ii) confer upon any person engaged by the Company or any parent or subsidiary corporation of the Company any right to be retained or employed by the Company or the parent or subsidiary or to the continuation, extension, renewal, or modification of any compensation, contract, or arrangement with or by the Company or the parent or subsidiary.

    17.  Rights as a Shareholder.  The recipient of any award under the Plan shall have no rights as a shareholder with respect to any Shares until the date of issue to the recipient of a stock certificate for such Shares. Except as otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued.

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BIOJECT MEDICAL TECHNOLOGIES INC. RESTATED 1992 STOCK INCENTIVE PLAN

EX-23

Exhibit 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

    As independent public accountants, we hereby consent to the incorporation of our report dated April 28, 2000 included in this Form 10-K for the year ended March 31, 2000, into the Company's previously filed Registration Statements on Form S-3, File Nos. 333-80679, 333-18933, 333-30955, 333-39421 and 333-62889, 333-31542, 333-94907, 333-32848 and Registration Statements on Form S-8, File Nos. 333-94400, 333-56454, 333-42156 and 333-37017.

/s/ ARTHUR ANDERSEN LLP

Portland, Oregon
August 3, 2000