10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to

Commission file number 000-21873

BIOSITE INCORPORATED

(Exact name of Registrant as specified in its charter)

Delaware	33-0288606
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11030 Roselle Street
San Diego, California,  92121
(Address of principal executive offices)
Registrant’s telephone number, including area code: (858) 455-4808

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  ý          No  o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes  ý          No  o

The number of shares of the Registrant’s Common Stock, $0.01 par value, outstanding at

May 1, 2003 was 14,992,057.

BIOSITE INCORPORATED

FORM 10-Q

INDEX

PART I.FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
Condensed Balance Sheets
Condensed Statements of Income (Unaudited)
Condensed Statements of Cash Flows (Unaudited)
Notes to Condensed Financial Statements (Unaudited)
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4.	CONTROLS AND PROCEDURES
PART II.  OTHER INFORMATION
ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS

Biosite®, Triage® and Omniclonal® are registered trademarks of Biosite Incorporated.  New Dimensions in Diagnosis ™ and the Company’s logo are trademarks of Biosite Incorporated.  Cardio ProfilER and ProfilER are the subject of pending trademark applications by Biosite Incorporated.

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Part I.     Financial Information

ITEM 1.  FINANCIAL STATEMENTS

BIOSITE INCORPORATED

Condensed Balance Sheets

(in thousands, except par value)

	March 31, 2003		December 31, 2002
	(Unaudited)		(Note)
Assets
Current assets:
Cash and cash equivalents	$	21,420	$	19,113
Marketable securities, available-for-sale	50,200		51,783
Accounts receivable, net	15,133		10,996
Inventories, net	14,883		12,295
Other current assets	4,810		4,574
Total current assets	106,446		98,761
Equipment and leasehold improvements, net	24,714		19,864
Patents and license rights, net	7,561		7,899
Other assets	5,268		4,730
	$	143,989	$	131,254
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,076	$	3,789
Accrued employee expenses	5,395		6,992
Income taxes and other current liabilities	7,609		5,055
Current portion of long-term obligations	2,626		2,224
Total current liabilities	21,706		18,060
Long-term obligations	7,262		5,253
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value, 5,000 shares authorized, none issued and outstanding at March 31, 2003 and December 31, 2002	—		—
Common stock, $.01 par value, 25,000 shares authorized; 14,948 and 14,895 shares issued and outstanding at March 31, 2003 and December 31, 2002, respectively	150		149
Additional paid-in capital	80,683		79,544
Unrealized net gain on marketable securities, net of related tax effect	359		385
Retained earnings	33,829		27,863
Total stockholders’ equity	115,021		107,941
	$	143,989	$	131,254

Note:The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

See accompanying notes.

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BIOSITE INCORPORATED

Condensed Statements of Income (Unaudited)

 (in thousands, except per share amounts)

	Three months ended March 31,
	2003			2002
Revenues:
Product sales	$	39,095		$	17,794
Contract revenues	846			854
Total revenues	39,941			18,648
Operating expenses:
Cost of product sales	13,834			5,647
Selling, general and administrative	11,440			6,059
Research and development	5,214			3,538
License and patent disputes	—			1,317
Total operating expenses	30,488			16,561
Operating income	9,453			2,087
Interest and other income, net	310			525
Income before provision for income taxes	9,763			2,612
Provision for income taxes	(3,797		)	(978		)
Net income	$	5,966		$	1,634
Net income per share:
- Basic	$	0.40		$	0.11
- Diluted	$	0.37		$	0.11
Shares used in calculating per share amounts:
- Basic	14,928			14,671
- Diluted	16,125			15,223

See accompanying notes.

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BIOSITE INCORPORATED

Condensed Statements of Cash Flows (Unaudited)

(in thousands)

	Three Months Ended March 31,
	2003			2002
OPERATING ACTIVITIES
Net income	$	5,966		$	1,634
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,162			1,164
Changes in operating assets and liabilities:
Accounts receivable	(4,137		)	1,555
Inventory	(2,587		)	(449		)
Other current assets	(486		)	(333		)
Income taxes	2,507			978
Accounts payable	2,288			121
Other current liabilities	(1,130		)	24
Net cash provided by operating activities	$	4,583		$	4,692
INVESTING ACTIVITIES
Proceeds from sales and maturities of marketable securities	12,867			5,066
Purchase of marketable securities	(11,328		)	(8,787		)
Purchase of property, equipment and leasehold improvements	(6,669		)	(1,308		)
Patents, license rights, deposits and other assets	(270		)	(778		)
Net cash used in investing activities	(5,400		)	(5,807		)
FINANCING ACTIVITIES
Proceeds from issuance of financing obligations	2,668			1,683
Principal payments under financing obligations	(257		)	(560		)
Proceeds from issuance of stock under stock plans, net	713			425
Net cash provided by financing activities	3,124			1,548
Increase in cash and cash equivalents	2,307			433
Cash and cash equivalents at beginning of period	19,113			13,011
Cash and cash equivalents at end of period	$	21,420		$	13,444
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	$	116		$	99
Income taxes paid	$	1,290		$	—
Income tax benefit of disqualifying dispositions of stock	$	422		$	18

See accompanying notes.

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BIOSITE INCORPORATED

Notes to Condensed Financial Statements (Unaudited)

1.BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with both generally accepted accounting principles for interim financial information, and the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  The accompanying financial statements reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, considered necessary for a fair presentation of the results for the interim periods presented.  Interim results are not necessarily indicative of results for a full year.  We have experienced significant quarterly fluctuations in our operating results and we expect that these fluctuations in sales, expenses and operating results may continue.

The financial statements and related disclosures have been prepared with the presumption that users of the interim financial information have read or have access to our audited financial statements for the preceding fiscal year.  Accordingly, these financial statements should be read in conjunction with the audited financial statements and the related notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2002.

Certain amounts in the financial statements for the three months ended March 31, 2002 have been reclassified to conform to the presentation of the financial statements for the three months ended March 31, 2003.

2.EARNINGS PER SHARE

Earnings per share, EPS, is computed in accordance with the Financial Accounting Standards Board’s Statement, or FAS, No. 128, Earnings Per Share.  FAS No. 128 requires dual presentation of basic and diluted earnings per share.  Basic EPS includes no dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period.  Diluted EPS reflects the potential dilution of securities that could share in our earnings, such as common stock equivalents that may be issuable upon exercise of outstanding common stock options.

Shares used in calculating basic and diluted earnings per share were as follows (in thousands):

	Three months ended March 31,
	2003	2002
Weighted average common shares outstanding – Shares used in calculating per share amounts – Basic	14,928	14,671
Net effect of dilutive common share equivalents using the treasury stock method	1,197	552
Shares used in calculating per share amounts – Diluted	16,125	15,223

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2.STOCK OPTIONS

We have elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, or APB 25, and related interpretations in accounting for our stock options.  Stock options issued to non-employees are recorded at their fair value as determined in accordance with FAS No. 123, Accounting for Stock-based Compensation, and Emerging Issues Task Force, or EITF, Issue No. 96-18, Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring or in Conjunction with Selling, Goods or Services, and are periodically re-measured as the stock options vest.

Adjusted pro forma information regarding net income is required by FAS No. 123, and has been determined as if we had accounted for our employee stock options under the fair value method of that Statement.  The weighted average fair value of options granted during the three months ended March 31, 2003 and 2002 were $36.22 and $16.52, respectively. The fair value for these options was estimated at the date of grant using the Black-Scholes method for option pricing with the following weighted-average assumptions for the three months ended March 31, 2003 and 2002:

	Three months ended March 31,
	2003		2002
Risk-free interest rate	2.78	%	3.02	%
Volatility	86	%	87	%
Dividend yield	0	%	0	%
Expected life of options	5.9 years		5.9 years

For purposes of adjusted pro forma disclosures, the estimated fair value of the options is amortized to expense over the options’ vesting period.  Our adjusted pro forma information is as follows:

	Three months ended March 31,
	2003			2002
	(in thousands, except per share data)
Net income, as reported	$	5,966		$	1,694
Pro forma FAS 123 compensation expense	(4,943		)	(4,005		)
Adjusted pro forma net income (loss)	$	1,023		$	(2,311	)
Adjusted pro forma basic net income (loss) per share	$	0.07		$	(0.16	)
Adjusted pro forma diluted net income (loss) per share	$	0.06		$	(0.16	)

The pro forma effects on net income for the three months ended March 31, 2003 and 2002 are not likely to be representative of the effects on reported net income or loss in future quarters or years.  In management’s opinion, existing stock option valuation models do not provide a reliable single measure of the fair value of employee stock options that have vesting provisions and are not transferable.  In addition, option valuation models require the input of highly subjective assumptions, including expected stock price volatility.  Changes in such subjective input assumptions can materially affect the fair value estimate of employee stock options.

3.BALANCE SHEET INFORMATION

Net inventories consist of the following:

	March 31, 2003		December 31, 2002
	(in thousands)
Raw materials	$	5,868	$	4,474
Work-in-process	6,091		6,027
Finished goods	2,924		1,794
	$	14,883	$	12,295

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4.COMPREHENSIVE INCOME

FAS No. 130, Comprehensive Income, establishes rules for the reporting and display of comprehensive income and its components.  FAS No. 130 requires the change in net unrealized gains or losses on marketable securities be included in comprehensive income.  As adjusted, our comprehensive income is as follows:

	Three months ended March 31,
	2003			2002
	(in thousands)
Net income	$	5,966		$	1,634
Change in unrealized net gain (loss) on marketable securities, net of tax	(26		)	(231		)
Comprehensive income	$	5,940		$	1,403

5.RECENT ACCOUNTING  PRONOUNCEMENTS

In November 2002, the EITF reached a consensus on Issue No. 00-21, Revenue Arrangements with Multiple Deliverables.  EITF Issue No. 00-21 provides guidance on how to account for arrangements that involve the delivery or performance of multiple products, services and/or rights to use assets. We will be required to adopt this provision for revenue arrangements entered into on or after June 15, 2003. Management is currently evaluating the effect that the adoption of EITF Issue No. 00-21 will have on the Company’s results of operations and financial condition.

In December 2002, the FASB issued FAS No. 148, Accounting for Stock-Based Compensation, Transition and Disclosure.  FAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. FAS No. 148 also requires that disclosures of the pro forma effect of using the fair value method of accounting for stock-based employee compensation be displayed more prominently and in a tabular format. Additionally, FAS No. 148 requires disclosure of the pro forma effect in interim financial statements. The transition and annual disclosure requirements of FAS No. 148 are effective immediately. The interim disclosure requirements are currently effective. The adoption of FAS No. 148 did not have a material effect on our results of operations or financial condition.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operation”s contain forward-looking statements that involve risks and uncertainties, including the extent to which our products and products under development are successfully developed and gain market acceptance; the impact of competition, including the introduction of products competitive with our Triage® BNP Test, from diagnostic companies with greater capital and resources; manufacturing capacity constraints, backlog, delays or inefficiencies; regulatory changes, uncertainties or delays; changing market conditions and the other risks and uncertainties described in “Risk Factors” below and throughout our Annual Report on Form 10-K for the year ended December  31, 2002.  Actual results may differ materially from those projected.  These forward-looking statements represent our judgment as of the date of the filing of this Form 10-Q.  We disclaim any intent or obligation to update these forward-looking statements.

Overview

Founded in 1988, Biosite Incorporated is a leading provider of novel, rapid medical diagnostics that improve a physician’s ability to diagnose critical diseases and conditions.  We believe that improvements in diagnosis of high-acuity diseases and conditions can positively impact medical decisions, improve the quality of patient care and contribute to cost-effective medical treatment.   We focus on large, poorly met medical needs for clinical tests that diagnose acute symptoms associated with serious health problems.

Our products are principally sold to hospitals, which number approximately 5,000 in the United States.  To market our products we utilize a clinically astute direct sales team that focuses its efforts on larger centers with more than 200 beds.  The Fisher HealthCare Division of the Fisher Scientific Company, or Fisher, distributes all of our products in U.S. hospitals and supports our direct sales force, particularly in smaller hospitals.  The term of the Fisher distribution agreement expires on December 31, 2003 and automatically renews for an additional two years unless a notice of non-renewal is delivered by either company.  We are in discussion with Fisher regarding options for a continued relationship.  Sales to Fisher represented 88% of our product sales in the first quarter of 2003 and 87% of our product sales for the full year 2002.  Fisher reported to us that end-user sales of our products by Fisher were $41.9 million in the first quarter of 2003 and $103.6 million for the full year 2002.  Fisher’s end-user sales are not directly comparable to our product sales because the timing of shipments from Biosite to Fisher may not match the timing of shipments from Fisher to the end-user hospitals and due to changes in the quantities of our products  that Fisher purchases and stocks in its inventory.  A field-based network of clinically experienced individuals supports the sales effort by providing pre- and post- sale education and training.  In international markets, we utilize a network of country-specific and regional distributors, as well as a small direct sales force.  Over the next few years, we anticipate transitioning the distribution of our products in some European countries to a direct sales and distribution basis.

Product sales for the first quarter of 2003 grew 120% over the same period of 2002.  This growth resulted largely from sales of our Triage BNP Test, which aids in the diagnosis of congestive heart failure, or CHF.  Sales of our Triage BNP Test represented 57% of our product sales in the first quarter of 2003, compared to 23% for the same period of 2002.  The test, which was launched domestically in 2001, was the first blood test available to aid in the detection of CHF and has benefited from a semi-exclusive position in the market.  We believe that the combination of innovation, medical relevance and semi-exclusivity has contributed to the success of the Triage BNP test and we seek to replicate this model for future products we hope to commercialize.

In 1999, we launched Biosite Discovery, a program dedicated to the validation of targets with novel therapeutic and/or diagnostic applications.  Through Biosite Discovery, we leverage our expertise in phage display antibody development to access protein targets via internal research, licensing or collaborations with clinical institutions or commercial companies.  Once promising targets are selected, we develop immunoassays for these targets and then conduct high throughput screening using patient samples procured from clinical collaborators, often leading medical institutions.  This process, which we refer to as marker mining, enables us to determine diagnostic utility and

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explore interrelations among multiple markers.  If the diagnostic utility of a marker or panel of markers is established, the marker or panel is then assessed for commercialization potential, with high-value markers or panels added to our product development pipeline.

We have reported consecutive quarterly operating profits since the third quarter of 1999, after incurring quarterly operating losses during the prior seven quarters.  Our operating results may fluctuate on a quarterly or annual basis in the future and our growth or operating results may not be consistent with predictions made by securities analysts.   We may not be able to maintain profitability in the future.  Some of the risks and uncertainties associated with our business and future operating results are discussed in the section entitled “Risk Factors” below.

Recent Developments

New Product – Triage Cardio ProfilER

In March 2003, we received clearance from the U.S. Food and Drug Administration, or FDA, to market our Triage Cardio ProfilER as an aid in the diagnosis of myocardial infarction (also known as heart attack), an aid in the diagnosis and assessment of severity of congestive heart failure (also referred to as heart failure), and for the risk stratification of patients with acute coronary syndromes.

Physician Office Practices Distributor

In May 2003, we entered into a distribution relationship with PSS World Medical, Inc. to market our products to physician office practices.  Under the terms of the multi-year agreement, PSS World Medical's physician business, Physician Sales & Service, or PSS, will be a distributor of the Triage BNP Test and other Biosite products to physician office practices.  In marketing our products, PSS is expected to use its 700 sales representatives, who serve physician offices in all 50 states.

Critical Accounting Policies Involving Management Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying financial statements and related footnotes.  In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality.  We do not believe there is a great likelihood that materially different amounts would be reported related to the accounting policies described below.  However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates.  Our senior management has discussed the development and selection of the critical accounting estimates, and related disclosures, with the Audit Committee of our Board of Directors.

Revenue Recognition.  We recognize product sales upon shipment unless there are significant post-delivery obligations or collection is not considered probable at the time of shipment.  Generally, we do not have any significant post-delivery obligations associated with our product sales.  We accrue for warranty costs and other allowances at the time of shipment based on historical experience, trends and estimates.

Our collaborative development agreements generally contain specific payments for specific activities or elements of the agreements.  Among the payments we might receive under the agreements are: up-front technology access fees, research funding, antibody development fees upon the delivery of antibodies, annual maintenance fees on targets for which we have produced antibodies for as long as the targets remain in development by our collaborators, milestone fees on drug targets that reach certain development milestones and royalties should products successfully be commercialized as a result of the collaboration.  Up-front technology access fees are recognized over the term of the agreement or ongoing research period, as applicable, unless we have no further continuing performance obligations related to the fees.  Research funding is recognized over the applicable research period on a straight-line basis, which approximates the underlying performance.  Milestone payments, such as antibody development fees and clinical milestones, are recognized when earned, as the milestone events are substantive and their achievability is not reasonably assured at the inception of the agreement.  Contract revenues that are based on the performance of and collection by our collaborators or their partners are deferred until such performance is complete and collection is

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probable.  We believe that each payment element of these agreements represents the fair value of the element at the date of the agreement.

The Securities and Exchange Commission’s Staff Accounting Bulletin, or SAB, No. 101, Revenue Recognition,  provides guidance on the application of generally accepted accounting principles to selected revenue recognition issues.  We believe that our revenue recognition policy is appropriate and in accordance with generally accepted accounting principles and SAB No. 101.

Inventories and Related Allowance for Obsolete and Excess Inventory.   Net inventories are valued at the lower of the first-in, first-out, or FIFO, cost or market value and have been reduced by an allowance for excess and obsolete inventories.  We utilize a standard cost system to track our inventories on a part-by-part, full absorption cost basis.   Adjustments are made to the standard labor and standard overhead costs to approximate actual labor and actual overhead costs on a FIFO cost basis.  The estimated allowance for excess and obsolete inventories is based on management’s review of inventories on hand compared to estimated future usage and sales and assumptions about the likelihood of obsolescence.

Intangible and Other Long-Lived Assets.  At March 31, 2003, we had approximately $37.6 million of long-lived assets, including $24.7 million of leasehold improvements and equipment and $7.4 million of capitalized license rights.  Leasehold improvements, equipment, intangible assets and certain other long-lived assets are amortized over the lesser of their useful lives or the remaining lease term.  Useful lives are based on management’s estimates of the period that the assets will generate revenue directly or indirectly.  License rights related to products for sale are amortized to cost of sales over the life of the license, not to exceed ten years, using a systematic method based on the estimated revenues generated from products during the shorter of the license period or ten years from the inception of the license.  The estimated revenues used as the base by which we amortize the license rights only includes estimated sales for products we are currently selling and does not include any estimated product sales expected to be realized during the license amortization term from products still in development today.  Our intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Deferred Income Taxes.  As of March 31, 2003, we have approximately $3.9 million of deferred tax assets, consisting primarily of temporary differences between book and tax treatment.  No valuation allowance has been recorded to offset the deferred tax assets as we have determined that it is more likely than not that these assets will be realized.  We will continue to assess the likelihood of realization of such assets; however, if future events occur which do not make the realization of such assets more likely than not, we will record a valuation allowance against all or a portion of the net deferred tax assets.  Examples of future events that may occur which would make the realization of such assets not likely are a lack of taxable income resulting from poor operating results or rising tax deductions generated from disqualifying dispositions of stock issued under our stock plans.

Results of Operations

Product Sales.   Product sales by product family were as follows (in thousands):

	Three months ended March 31,
Product Family	2003		2002
Cardiovascular products:
Triage BNP Test products	$	22,182	$	4,123
Triage Cardiac Panel products	5,371		3,427
Triage MeterPlus products	1,308		516
Other products:
Triage Drugs of Abuse Panel and TOX Drug Screen products	9,182		8,588
Triage Microbiology products	1,052		1,140
Total Product Sales	$	39,095	$	17,794

Product Sales. Product sales for the three months ended March 31, 2003 were $39.1 million, representing an increase of 120% compared to $17.8 million for the same period of 2002. The increase in total product sales was

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primarily attributable to the $18.1 million growth in sales of our Triage BNP Test, one of our cardiovascular diagnostic products.

Due to the continued acceleration in customer demand for the Triage BNP Test, distributor inventory levels of some of our products were below targeted stocking levels at March 31, 2003.  We are expanding our manufacturing capacity through added production shifts and through the implementation of additional automated manufacturing equipment.  Product sales in future quarters will increase or decrease as we and our distributors attempt to adjust distributor inventories to targeted stocking levels and will be dependent on our effectiveness and efficiency in expanding our manufacturing capacity.

Product sales of our cardiovascular products, consisting of our Triage Cardiac Panel, Triage BNP Test and Triage MeterPlus, totaled $28.9 million for the three months ended March 31, 2003, as compared to $8.1 million for same period of 2002.  The product sales growth of our cardiovascular products of 258% was primarily due to growth in sales volume of our Triage BNP Test.

The Triage BNP Test is currently one of only two FDA-approved tests used as an aid in the diagnosis of congestive heart failure.  Roche Diagnostics received FDA clearance to market its competitive product in November 2002.  Abbott Laboratories, Bayer Diagnostics and Shionogyi  & Co. Ltd have certain diagnostic rights to the BNP protein and we anticipate competition from these companies in the future.   These competitors may succeed in developing or marketing products that are more effective or commercially attractive than the Triage BNP Test.  Moreover, we may not have the financial resources, technical expertise or marketing, distribution or support capabilities to compete successfully with these and other competitors in the future.  Scios, Inc., the licensor of the BNP technology and patents was acquired by Johnson & Johnson in April 2003.

Product sales of the Triage Drugs of Abuse Panel, Triage TOX Drug Screen, Triage C. difficile Panel and Triage Parasite Panel were $10.2 million for the three months ended March 31, 2003, as compared to $9.7 million for same period of 2002.  The product sales increase of these products was primarily due to an increase in sales volume of our Triage Drugs of Abuse Panel and Triage TOX Drug Screen.  We believe that the domestic sales of the Triage Drugs of Abuse Panel products may decline as the available U.S. market becomes saturated and competitive pressures become more prominent in a maturing market.  The Triage TOX Drug Screen was launched in the United States in February 2002.

Contract Revenues.  Contract revenues consist of revenues associated with our research and development and licensing arrangements, including license fees, milestone revenues, royalties, research funding and antibody fees.  Contract revenues for the three months ended March 31, 2003 were $846,000, as compared to $854,000 for the same period of 2002.  Contract revenues recognized during the first quarter of 2003 and 2002 consisted primarily of research funding.  In June 2000, we entered into an alliance with Medarex Inc.  Under the terms of the agreement, we receive research funding of $3.0 million per year over eight years from Medarex, along with research fees and, if any products are generated through the collaboration, milestone payments and royalties. During each of the first quarters of 2003 and 2002, we recognized $750,000 of research funding from the alliance with Medarex.  Other contract revenues recognized during the first quarters of 2003 and 2002 included antibody fees, milestone payments and license fees.  Biosite Discovery activities are performed and its costs are incurred by certain of our research and development teams.  These Biosite Discovery research and development resources concurrently focus on programs for our partners, which generated our contract revenue, and on internal research and development programs.  Costs of the research and development resources performing collaborative and internal Biosite Discovery activities were approximately $1.4 million and $1.2 million in the first quarters of 2003 and 2002, respectively, and are included in research and development expenses.

Cost of Sales and Gross Profit From Product Sales. Gross profit from product sales increased 109% to $25.3 million for the three months ended March 31, 2003 from $12.1 million for the same period of 2002.   Gross profits increased primarily due to an overall increase in product sales.  The overall gross margin for the three months ended March 31, 2003 was 65%, compared to 68% for the same period of 2002.  The decrease in the overall gross margin primarily resulted from the changing mix of our sales of products that have different gross margins and from inefficiencies experienced as we attempt to increase our manufacturing capacity by adding production shifts and implementing semi-automated and automated manufacturing equipment into the manufacturing processes.  Our cardiovascular products have lower gross margins than our Triage Drugs of Abuse Panel.  Sales of our cardiovascular products represented 74% and 45% of our product sales for the three months ended March 31, 2003 and 2002, respectively.

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Our cardiovascular products are expected to continue to realize lower gross margins than the Triage Drugs of Abuse Panel as manufacturing capacity and production efficiency issues are addressed.  Although our gross profits may continue to grow, we expect that our overall gross margins may continue to decrease as a result of competitive pricing pressures and the changing mix of sales of products with different gross margins.

Selling, General and Administrative Expenses. Selling, general and administrative, orSG&A, expenses increased 89% to $11.4 million for the three months ended March 31, 2003 from $6.1 million for the same period of 2002.  The increase in SG&A expenses was primarily associated with the addition of sales, marketing, clinical education and technical service resources, expanded sales activities related to our broader product lines, additional marketing activities relating to new products, increased administrative resources and costs to support our expanded operations and higher performance-based compensation, such as sales commissions and bonuses based on financial performance.

We expect SG&A expenses in 2003 to be higher than in 2002, as we continue to increase our sales, marketing, clinical education and technical service resources.  A significant portion of the 2002 increase in sales and field support resources occurred during the latter half of the year and is expected to contribute to the growth we anticipate in 2003.  We also expect to expand our overall operations, including sales and marketing program activities for our new products and administrative support functions and infrastructure.  The timing of such increased expenditures and their magnitude are primarily dependent on the commercial success and sales growth of our products.

Research and Development Expenses. Research and development, or R&D, expenses increased 47% to $5.2 million for the three months ended March 31, 2003 from $3.5 million for the same period of 2002.  During the first quarters of 2003 and 2002, our research and development resources were focused primarily on product development for potential new diagnostics for critical health conditions such as stroke and acute coronary syndrome, the development of potential improvements to our existing products and manufacturing processes, and research activities associated with Biosite Discovery.  Expenses related to the performance of our obligations associated with earning our contract revenues were incurred by our research and development group, primarily Biosite Discovery.

License and Patent Disputes. Expenses associated with license and patent disputes incurred during the first quarter of 2002 totaled $1.3 million.  The expenses consisted primarily of legal costs related to our litigation with XOMA.  In September 2002, we announced that we resolved all outstanding disputes regarding patent and licensing issues with XOMA so as to permit each the freedom to operate its business.

Interest and Other Income, net. Interest and other income, net was $310,000 and $525,000 for the three months ended March 31, 2003 and 2002, respectively.  The decrease resulted primarily from lower interest income from our cash equivalents and marketable securities due to an overall decline in interest rates, offset by the higher average balance of cash and marketable securities during the three months ended March 31, 2003 compared to the same period of 2002.

Provision for Income Taxes. As a result of the pre-tax income and the estimated tax credits to be generated in 2003, we recorded a provision for income taxes of $3.8 million for the first three months of 2003.  For the same period in 2002, we recorded a provision for income taxes of $978,000. We will continue to assess the likelihood of realization of our tax credits and other net deferred tax assets.  If future events occur that do not make the realization of such assets more likely than not, a valuation allowance will be established against all or a portion of the net deferred tax assets.

Liquidity and Capital Resources

We have financed our operations through cash from operations, private and public placements of equity securities, debt and capital lease financing, cash received under collaborative agreements and interest income.  As of March 31, 2003, we had cash, cash equivalents and marketable securities of approximately $71.6 million compared to $70.9 million as of December 31, 2002.

The increase in cash, cash equivalents and marketable securities during the first quarter of 2003 as compared to the same period of 2002 was largely attributable to proceeds from equipment financing of $2.7 million, compared to $1.7 million for the same period of 2002.  Cash generated from operating activities was $4.6 million during the first quarter of 2003, compared to $4.7 million for the same period in 2002.  The primary contributor to cash generated from operating activities was our net income for the three months ended March 31, 2003 of $6.0 million.  Cash

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generated from operating activities also included increases in current liabilities totaling approximately $3.7 million and non-cash expenses such as depreciation and amortization of $2.2 million, offset by increases in accounts receivable of $4.1 million and inventory of $2.6 million.   Significant uses of cash during the first quarter of 2003 included expenditures for leasehold improvements and capital equipment of $6.7 million.

The increase in cash, cash equivalents and marketable securities during the first quarter of 2002 as compared to the same period of 2001 was largely attributable to cash generated from the operating activities of $4.7 million, compared to $8.7 million during the first quarter of 2001.  The cash generated from operating activities included the reduction of accounts receivable of $1.6 million, increases in income taxes payable, account payable and accrued liabilities of $1.1 million and non-cash expenses such as depreciation and amortization of $1.2 million.   Other sources of cash included the receipt of $1.7 million in proceeds from equipment financing.  Significant uses of cash during the first quarter of 2002 included the purchase of leasehold improvement and capital equipment of approximately $1.3 million and additional escrow deposits, totaling $750,000, related to purchase of land for our future corporate headquarters.

Our primary short-term needs for capital, which are subject to change, are for the payments related to the closing of escrow to purchase land to construct our new corporate facility, support of our commercialization efforts related to our products, including expansion of our direct sales force and field support resources, improvements in our manufacturing capacity and efficiency, facility expansion, new product development, clinical trials, and the continued advancement of research and development efforts.  We executed agreements to license technologies patented by others that call for milestone payments and future royalties based on product sales utilizing the licensed technologies.  We may enter into additional licensing agreements that may include up-front and annual cash payments, milestone payments and future royalties based on product sales utilizing the licensed technologies. We utilized and may continue to utilize credit arrangements with financial institutions to finance the purchase of capital equipment. Additionally, we may utilize cash generated from operating activities, if any, to meet our capital requirements.

We are also addressing our future facilities expansion needs. We are currently in escrow to purchase approximately 34.7 acres of land in San Diego for the relocation of our corporate headquarters, which would be adequate for our foreseeable future needs.  The estimated purchase price of the land is $28.1 million.  The acquisition of the land is to occur in a two-part escrow closing process.  The first escrow closing, expected to occur on May 28, 2003, is for the purchase of 68% of the land and will require us to pay an additional $18.4 million.  The second escrow closing for the remaining 32% of the land is scheduled to occur on September 30, 2003, and will require an additional payment of $8.7 million to be made by us.  We are pursuing financing for a portion of the land purchase price and the subsequent building construction costs.  We may not be able to obtain financing on commercially reasonable terms or at all.  The new headquarters will provide us with up to 800,000 square feet and will be constructed in phases as needed.  The first phase will provide us with approximately 350,000 square feet of space.  The total land and construction cost of the first phase is estimated to be approximately $95 million.  We expect the first phase of construction to be completed in 2004.  We may decide to seek additional capital to fund the purchase and construction of this new facility.  We would not anticipate expanding our operations to the new facility prior to 2004.  Expanding into a new facility would be expected to result in both cash expenditures, for the purchase of the land and construction costs, that would be partially reimbursed from loan proceeds if we are successful in obtaining financing, and an increase in occupancy costs.  We believe that the occupancy and financing costs of the new facility should impact our net income and earnings per share more favorably than other facilities expansion options such as leasing additional space adjacent to our current corporate headquarters.

We believe that our available cash, cash from operations and funds from existing credit arrangements will be sufficient to satisfy our funding needs for at least the next 24 months, except for the potential funding requirement of a portion of the cost of our facility expansion plan.

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RISK FACTORS

This report includes forward-looking statements about our business and results of operations that are subject to risks and uncertainties that could cause our actual results to vary materially from that indicated from such forward-looking statements. Factors that could cause or contribute to such differences include those discussed below, as well as those discussed elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2002.  In addition to the risk factors discussed below, we are also subject to additional risks and uncertainties not presently known to us or that we currently deem immaterial.  If any of these known or unknown risks or uncertainties actually occur, our business could be harmed substantially.

We have only a limited history of profitability and we may not maintain profitability.  In addition, our quarterly and annual results may fluctuate.

We have reported quarterly operating profits since the third quarter of 1999 after incurring quarterly operating losses during the prior seven quarters.  Our operating results may fluctuate on a quarterly or annual basis in the future.  We may not be able to maintain profitability in the future.  We believe that our future operating results may be subject to quarterly and annual fluctuations due to a variety of factors, including:

•market acceptance of current or new products

•competition, including the introduction of products competitive with our Triage BNP Test, from diagnostic companies with greater financial capital and resources

•changes in the mix of products sold

•seasonal or unanticipated changes in customer demand

•the timing and variability of significant orders

•manufacturing capacity constraints, backlog, delays or inefficiencies

•competitive pressures on average selling prices of our products

•regulatory changes, uncertainties or delays

•changes in reimbursement policies

•costs, timing and effectiveness of further expansion of our sales force and field support resources

•whether and when new products are successfully developed and introduced by us

•research and development efforts, including clinical trials and new product scale-up activities

•ability to execute, enforce, maintain and attain milestones under license and collaborative agreements necessary to earn contract revenues

•product recalls

•shipment problems

•enforcement, defense and resolution of license and patent disputes; and

•costs and timing associated with business development activities, including potential licensing of technologies.

Our operating results would also be adversely affected by a downturn in the market for our products.  Because we continue to increase our operating expenses to support our expanded sales and marketing activities, manufacturing operations and new product development, our operating results would be adversely affected if our sales and gross profits did not correspondingly increase or if our product development efforts are unsuccessful or subject to delays.  Our limited operating history makes accurate prediction of future operating results difficult or impossible. We may not sustain revenue growth or sustain profitability on a quarterly or annual basis and our growth or operating results may not be consistent with predictions made by securities analysts.

We are dependent on the market acceptance of our products for revenue growth and profitability.

We believe that our revenue growth and profitability will substantially depend upon our ability to continue to achieve a growing level of market acceptance of our newer products such as the Triage Cardiac Panel, Triage Cardio ProfilER and the Triage BNP Test, as well as our ability to appropriately manage our operating expenses and our capital expenditures to optimize our profitability.  We have made and continue to make significant additions in headcount, manufacturing equipment, facilities and infrastructure to address our current and planned future revenue growth.  These investments and commitments are predicated on assumptions of market acceptance of our products and revenue growth.

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If we fail to plan, establish and maintain:

•        reliable, cost-efficient, high volume manufacturing capacity

•a cost-effective sales force, implementation and customer support resources and administrative infrastructure

•        an effective product distribution system for our products; or

•        appropriate strategies or tactics to address competitors of our products,

market acceptance of our products may not meet our expectations and our profitability may suffer.  Unanticipated acceleration of customer demand for our products has and may continue to result in constraints or inefficiencies related to our manufacturing, sales force, implementation resources and administrative infrastructure.  Such constraints or inefficiencies may adversely affect us as a result of delays, lost potential product sales or loss of current or potential customers due to their dissatisfaction.

The Triage BNP Test may encounter significant competition from products to be developed and commercialized by companies with greater financial capital and resources

Product sales of our Triage BNP Test represented 57% of our product sales in the first quarter of 2003 and 38% of our product sales during the year 2002.  The Triage BNP Test is currently only one of two United States Food & Drug Administration, or FDA, cleared tests for use as an aid in the diagnosis of congestive heart failure.  Roche Diagnostics received its FDA clearance to market a product competitive  with our Triage BNP Test in November 2002.  Abbott Laboratories, Bayer Diagnostics and Shionogi  & Co., Ltd. have certain diagnostic rights to the BNP protein and we anticipate competition from these companies in the future.   These competitors may succeed in developing or marketing products that are more effective or commercially attractive than the Triage BNP Test.  Moreover, we may not have the financial resources, technical expertise or marketing, distribution or support capabilities to compete successfully against these companies and other competitors in the future.  Scios, Inc., the licensor of the BNP technology and patents was acquired by Johnson & Johnson in April 2003.

Competition and technological change may make our products less attractive or obsolete.

The market in which we compete is intensely competitive.  Our competitors include:

•        companies making laboratory-based tests and analyzers

•        clinical reference laboratories; and

•        other rapid diagnostic test manufacturers.

Currently, the majority of diagnostic tests used by physicians and other health care providers are performed by independent clinical reference laboratories and hospital-based laboratories.  We expect that these laboratories will compete vigorously to maintain their dominance of the testing market. In order to achieve market acceptance for our products, we will be required to demonstrate that our products provide cost-effective and time saving alternatives to tests performed by clinical reference laboratories or traditional hospital-based laboratory procedures.  This will require many physicians to change their established means of having such tests performed.  Our products may not be able to compete with the testing services provided by traditional laboratory services.

In addition, companies with a significant presence in the diagnostic market, such as:

•        Abbott Laboratories

•        Dade Behring

•        Roche Diagnostics

•        Bayer Diagnostics; and

•        Beckman Coulter,

have developed or are developing diagnostic products that do or will compete with our products.  These competitors have substantially greater financial, technical, research and other resources and larger, more established marketing, sales, distribution and service organizations than us.  Moreover, these competitors offer broader product lines and

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have greater name recognition than us, and offer discounts as a competitive tactic.  In addition, several smaller companies are currently making or developing products that compete with or will compete with our products.

Our competitors may succeed in developing or marketing technologies or products that are more effective or commercially attractive than our products, or that would render our technologies and products obsolete.  Moreover, we may not have the financial resources, technical expertise or marketing, distribution or support capabilities to compete successfully in the future.  The success of our competitors, many of which have made substantial investments in competing technologies, or our failure to compete successfully, may prevent, limit or interfere with our ability to make, use or sell our products either in the United States or in international markets.

Our limited manufacturing experience and our potential inability to scale-up manufacturing may adversely affect our ability to produce products.

We must manufacture our products in compliance with regulatory requirements, in sufficient quantities and on a timely basis, while maintaining acceptable product quality and manufacturing costs. Significant additional resources, implementation of additional automated and semi-automated manufacturing equipment or changes in our manufacturing processes has been, and may continue to be, required for the scaling-up of each new product prior to commercialization or in order to meet increasing customer demand once commercialization begins, and this work may not be completed successfully or efficiently.

In addition, although we expect some of our newer products and products under development to share production attributes with our existing products, production of these products may require the development of new manufacturing technologies and expertise.  These products may not be able to be manufactured by us or any other party at a cost or in quantities to make these products commercially viable.  If we are unable to develop or contract for manufacturing capabilities on acceptable terms for our products under development, our ability to conduct pre-clinical and clinical testing will be adversely affected, resulting in the delay of submission of products for regulatory clearance or approval and initiation of new development programs, which would have a material adverse effect on us.

Manufacturing and quality problems have arisen and may arise as we attempt to scale-up our manufacturing capacity and such scale-up may not be achieved in a timely manner or at a commercially reasonable cost, or at all.  Unanticipated acceleration or deceleration in customer demand for our products has and may continue to result in manufacturing constraints or production inefficiencies.  Our manufacturing facilities and those of our contract manufacturers are, or will be, subject to periodic regulatory inspections by the FDA and other federal and state regulatory agencies and these facilities are also subject to Quality System Regulations requirements of the FDA.  We, or our contractors, may not satisfy such regulatory requirements, and any failure to do so would have a material adverse effect on us.

We are dependent on key distributors and have limited direct distribution experience.  If any of our distributors’ relationships are terminated, or our distributors fail to adequately perform, our product sales will suffer.

We rely upon a key distributor alliance with Fisher for distribution of our products in the U.S. hospital market segment and may rely upon Fisher or other distributors to distribute products under development or our products in other market segments. All of our products are currently marketed pursuant to distribution agreements in the U.S. hospital market segment by Fisher (which accounted for 88% of our product sales in the first quarter of 2003 and 87% of product sales in the full year 2002) and internationally by country-specific and regional distributors, as well as by our direct sales force.  The loss or termination of one or more of these distributors could have a material adverse effect on our sales.   The term of our distribution agreement with Fisher expires on December 31, 2003 and automatically renews for an additional two years unless a notice of non-renewal is delivered by either company.  We are in discussions with Fisher regarding options for a continued relationship.  Over the next few years, we anticipate transitioning the distribution of our products in some European countries to a direct sales and distribution basis.

If any of our distribution or marketing agreements are terminated and we are unable to enter into alternative agreements or if we elect to distribute our products directly, we would have to invest in additional sales and marketing resources, including additional field account executives and field support resources, which would significantly increase future SG&A expenses.  Changes in the distribution of our products may also result in contract termination fees, disruption of our business, increased competition and lower product sales and operating profits.  We have limited experience in direct sales, marketing and distribution of our products.  Our direct sales, marketing

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and distribution efforts may not be successful.  Further, we may not be able to enter into new distribution or marketing agreements on satisfactory terms, or at all.  A failure to enter into acceptable distribution agreements or our failure to successfully market our products would have a material and adverse effect on us.

A significant portion of our product sales is made to Fisher domestically and other distributors internationally.  As a result, our financial results, quarterly product sales, trends and comparisons are affected by fluctuations in the buying patterns of end-user customers, Fisher and our other distributors, and by the changes in inventory levels of our product held by these distributors.  We are unable to verify the inventory levels of our international distributors.  We only have limited visibility over the inventory levels of our products at Fisher.  While we attempt to assist Fisher in maintaining targeted stocking level of our products, we may not consistently be accurate or successful.  This process involves the exercise of judgment and use of assumptions as to future uncertainties including end-user customer demand and, as a result, actual results could differ from our estimates.  Inventory levels of our products held by distributors may exceed or fall below the levels we consider desirable on a going-forward basis.

We are dependent on sole-source suppliers for our products.  A supply interruption would harm us.

Key components and raw materials used in the manufacture of our products are provided by single-source vendors.  Any supply interruption in a sole-sourced component or raw material would have a material adverse effect on our ability to manufacture these products until a new source of supply is qualified or alternative manufacturing processes are implemented and, as a result, would have a material adverse effect on us.  In addition, an uncorrected impurity or supplier’s variation in a raw material, either unknown to us or incompatible with our manufacturing processes of our products, could have a material adverse effect on our ability to manufacture products.  We have under development products that, if developed, may require us to enter into additional supplier arrangements or implement alternative manufacturing processes.  We may not be able to enter into additional supplier arrangements on commercially reasonable terms, or at all.  We also may not be able to implement alternative manufacturing processes that are effective and cost efficient, or at all.  Failure to obtain a supplier or the implementation of alternative processes for the manufacture of our future products, if any, would have a material adverse effect on us.

We rely upon LRE Technology Partners GmbH, or LRE, for production of the fluorometer that is used with our Triage MeterPlus platform products, which includes the Triage Cardiac Panel, Triage BNP Test and Triage TOX Drug Screen and other products currently under development.  If LRE is unable to manufacture sufficient quantities or quality of the Triage MeterPlus, this may adversely affect

• our sales and profit margins

• our ability to develop and manufacture products on a timely and competitive basis; or

• the timing of market introductions and subsequent sales of products incorporating the Triage MeterPlus.

Health care reform and restrictions on reimbursement may adversely affect our results.

In the United States, health care providers that purchase our products and other diagnostic products generally rely on third-party payors to reimburse all or part of the cost of the procedure.  Third-party payors can affect the pricing or the relative attractiveness of our products by regulating the maximum amount of reimbursement provided by such payors for testing services.  In addition, the tests performed by public health departments, corporate wellness programs and other large volume users in the drug screening market are generally not subject to reimbursement.  Further, some health care providers utilize a managed care system in which providers contract to provide comprehensive health care for a fixed cost per patient.  We are unable to predict what changes will be made in the reimbursement methods utilized by third-party payors. We could be adversely affected by changes in reimbursement policies of governmental or private health care payors, particularly to the extent any such changes affect reimbursement for procedures in which our products are used.

Third-party payors are increasingly scrutinizing and challenging the prices charged for medical products and services. Decreases in reimbursement amounts for tests performed using our products may decrease amounts physicians and other practitioners are able to charge patients, which in turn may adversely affect our ability to sell our products on a profitable basis.  Failure by physicians and other users to obtain reimbursement from third-party payors, or changes in government and private third-party payors’ policies toward reimbursement of tests utilizing our products could have a material adverse effect on us.  Given the efforts to control and reduce health care costs in the United States in recent years, there can be no assurance that currently available levels of reimbursement will continue to be available in the future for our existing products or products under development.

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In addition, market acceptance of our products in international markets is dependent, in part, upon the availability of reimbursement within prevailing health care payment systems. Reimbursement and health care payment systems in international markets vary significantly by country, and include both government sponsored health care and private insurance.

We believe that the overall escalating cost of medical products and services has led to and will continue to lead to increased pressures on the health care industry, both foreign and domestic, to reduce the cost of products and services, including products offered by us.  Third-party reimbursement and coverage may not be available or adequate in either U.S. or foreign markets, current reimbursement amounts may be decreased in the future and future legislation, regulation or reimbursement policies of third-party payors may adversely affect the demand for our products or our ability to sell our products on a profitable basis.

Changes in laboratory regulations for our customers may adversely affect us.

The use of our products is affected by the Clinical Laboratory Improvement Amendments of 1988, or CLIA, and related federal and state regulations that provide for regulation of laboratory testing. The scope of these regulations includes quality control, proficiency testing, personnel standards and federal inspections.

Under CLIA quality control rules in effect from 1992 through 2002, laboratories using “unitized” test systems were in compliance with CLIA if they followed the manufacturers’ instructions for daily quality control, or QC, by relying on the internal controls built into unitized test systems, including our Triage products.

On April 24, 2003, a new CLIA rule regarding quality assessment and quality control requirements for clinical laboratories was implemented by the Centers for Medicare and Medicaid Services, or CMS.  In an April 25, 2003 notification of Department of Health & Human Service Regional Offices, CMS CLIA program management directed CLIA surveyors to not enforce the new, general quality control provisions of the rule that increase regulatory burden until final Interpretive Guidelines are published.   In the interim, CLIA surveyors are to inspect laboratories using the quality control guidelines in force from 1992 through 2002.

Future amendment of CLIA, the promulgation of additional regulations or guidelines impacting laboratory testing, and uncertainties relating to the enforcement of CLIA may have a material adverse effect on our ability to market our products, our business and financial condition, our results of operations and our customers’ access to our products.

Our patents and proprietary technology may not provide us with any benefit and the patents of others may prevent us from commercializing our products.

Our ability to compete effectively will depend in part on our ability to develop and maintain proprietary aspects of our technology, and to operate without infringing the proprietary rights of others or to obtain licenses to such proprietary rights.  Our patent applications may not result in the issuance of any patents.  Additionally, our patent applications may not have priority over others’ applications, or, if issued, our patents may not offer protection against competitors with similar technology.  Any patents issued to us may be challenged, invalidated or circumvented in the future and the rights created thereunder may not provide a competitive advantage.

Our products and activities may be covered by technologies that are the subject of patents issued to, and patent applications filed by, others.  We have obtained licenses, and we may negotiate to obtain other licenses, for technologies patented by others.  Some of our current licenses are subject to rights of termination and may be terminated.  Our licensors may not abide by their contractual obligations and, as a result, may limit the benefits we currently derive from their licenses.  We may not be able to renegotiate or obtain licenses for technology patented by others on commercially reasonable terms, or at all.  We may not be able to develop alternative approaches if we are unable to obtain licenses and our current and future licenses may not be adequate for the operation of our business.  The failure to obtain, maintain or enforce necessary licenses or to identify and implement alternative approaches would prevent us from operating some or all of our business and would have a material adverse effect on us.

We rely upon trade secrets, technical know-how and continuing invention to develop and maintain our competitive position. Others may independently develop substantially equivalent proprietary information and

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techniques or otherwise gain access to our trade secrets or disclose such technology.  We may not be able to meaningfully protect our trade secrets, or be capable of protecting our rights to our trade secrets.

Others may have filed and in the future are likely to file patent applications that are similar or identical to ours. To determine the priority of inventions, we may have to participate in interference proceedings declared by the United States Patent and Trademark Office, or USPTO, that could result in substantial cost to us.  No assurance can be given that any patent application of others will not have priority over patent applications filed by us.

The legal proceedings to obtain patents and litigation of third-party claims of intellectual property infringement could require us to spend substantial amounts of money and could impair our operations.

We may become subject to patent infringement claims and litigation or interference proceedings conducted in the USPTO to determine the priority of inventions. We also may receive correspondence from other parties calling to our attention the existence of patents that they believe cover technology that is or may be incorporated in our products and products under development.  Some of this correspondence may include offers to negotiate the licensing of the patented technologies.  There can be no assurance that these matters would not result in litigation.

Litigation may be necessary to enforce any patents issued to us, to protect trade secrets or know-how owned by us or to determine the enforceability, scope and validity of the proprietary rights of others.  Litigation related to these matters has in the past, and may in the future, result in material expenses to us and be a significant diversion of effort by our technical and management personnel, regardless of the outcome.  Litigation, if initiated, could seek to recover damages as a result of any sales of the products and to enjoin further sales of such products.  The outcome of litigation is inherently uncertain.  An adverse outcome in litigation or the failure to obtain a necessary license could subject us to significant liability and could prevent us from selling any or all of our products, which could have a material adverse effect on our business, financial condition and results of operations.

Our commercial success also depends in part on us neither infringing patents or proprietary rights of third parties nor breaching any licenses that may relate to our technologies and products.  We are aware of several third-party patents that may relate to our technology.  There can be no assurance that we do not or will not infringe these patents, or other patents or proprietary rights of third parties.  In addition, we have received and may in the future receive notices claiming infringement from third parties as well as invitations to take licenses under third-party patents. Any legal action against us or our collaborators claiming damages and seeking to enjoin commercial activities relating to our products and processes affected by third-party rights, in addition to subjecting us to potential liability for damages, may require us or our collaborative partner to obtain a license in order to continue to manufacture or market the affected products and processes.  There can be no assurance that we or our collaborators would prevail in any such action or that any license (including licenses proposed by third parties) required under any such patent would be made available on commercially acceptable terms, if at all.  There are a significant number of U.S. and foreign patents and patent applications in our areas of interest, and we believe that there may be significant litigation in the industry regarding patent and other intellectual property rights.  ..

Long-lived and intangible assets may become impaired and result in an impairment charge

At March 31, 2003, we had approximately $24.7 million of leasehold improvements and equipment and $7.4 million of capitalized license rights.  The carrying amounts of these long-lived and intangible assets are affected whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such events or circumstances might include a significant decline in market share, a significant decline in profits, rapid changes in technology, significant litigation or other matters. Adverse events or changes in circumstances may affect the estimated undiscounted future operating cash flows expected to be derived from long-lived and intangible assets. In the event impairment exists, an impairment charge would be determined by comparing the carrying amount of the asset to the applicable estimated future cash flows, discounted at a risk-adjusted interest rate. An impairment charge may result in a material adverse effect on our operating results.  In addition, the remaining amortization period for the impaired asset would be reassessed and revised if necessary.

As of March 31, 2003, we have approximately $3.9 million of deferred tax assets, consisting primarily of temporary differences between book and tax treatment of certain items such as depreciation.  No valuation allowance has been recorded to offset the deferred tax assets as we have determined that it is more likely than not that these assets will be realized.  We will continue to assess the likelihood of realization of such assets; however, if future events occur which do not make the realization of such assets more likely than not, we will record a valuation

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allowance against all or a portion of the net deferred tax assets.  Examples of future events that may occur which would make the realization of such assets not likely would be a lack of taxable income resulting from poor operating results or rising tax deductions generated from disqualifying dispositions of stock issued under our stock plans.

We may need additional capital.  If additional capital is not available, we may have to curtail or cease operations.

If cash generated from operations is insufficient to satisfy our working capital and capital expenditure requirements, we may be required to sell additional equity or debt securities or obtain additional credit facilities.  Additional capital, if needed, may not be available on satisfactory terms, or at all.

Furthermore, any additional equity financing may be dilutive to stockholders, and debt financing, if available, may include restrictive covenants.  Our future liquidity and capital funding requirements will depend on numerous factors, including:

•the extent to which our new products and products under development are successfully developed, gain market acceptance and become and remain competitive

•the timing and variability of significant orders

•seasonal or unanticipated changes in customer demand

•regulatory changes, uncertainties or delays

•the costs, timing and effectiveness of further expansion of sales, marketing and manufacturing activities and resources, expansion of our manufacturing capacity and Biosite Discovery activities and our facilities expansion needs

•competition, including the introduction of products competitive with our Triage BNP Test, from diagnostic companies with greater financial capital and resources

•the ability to execute, enforce and maintain license and collaborative agreements and attain the milestones under these agreements necessary to earn contract revenues

•the enforcement, defense and resolution of license and patent disputes

•the timing and results of research and development efforts including clinical studies and regulatory actions regarding our potential products

•changes in third-party reimbursement policies; and

•the costs and timing associated with business development activities, including potential licensing of technologies patented by others.

The failure by us to raise capital on acceptable terms when needed would cause us to have to scale back our operations, reduce our work force and license to others products we would otherwise seek to develop or commercialize ourselves.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

Changing facilities costs may negatively impact operating results

We are currently in escrow to purchase approximately 34.7 acres of land in San Diego for the relocation of our corporate headquarters, which would be adequate for our foreseeable future needs.  The new headquarters will provide us with up to 800,000 square feet and will be constructed in phases as needed.  The first phase will provide us with approximately 350,000 square feet of space.  The total cost of the land and construction costs of the first phase is estimated to be approximately $95 million.  We are pursuing financing for a portion of the land purchase price and the subsequent building construction costs.  We may not be able to obtain financing on commercially reasonable terms or at all.  We expect the first phase of construction to be completed in 2004.   We expect our occupancy costs to increase primarily due to increased square footage.  Should there be a downturn in our business or the markets in which we compete, we may not have a need to expand our facilities as we have planned.  As a result, we may then seek an alternative use for all or a portion of the property, or seek to sell the property, which may have a negative impact on our operating results.

Additionally, in order to meet the increasing customer demand for our products, short-term investments in additional facility space and related leasehold improvements have been, and continue to be, made in order to increase our manufacturing capacity prior to our relocation to the new corporate headquarters.  Because of their short-term nature, these investments in additional facility space and related leasehold improvements may not be done as efficiently or cost effectively as longer-term investments or improvements.

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The regulatory approval and compliance process is expensive, time consuming and uncertain.  As a result, we may not obtain required approvals or previously acquired approvals for the commercialization of our products may be rescinded.

The testing, manufacture and sale of our products are subject to regulation by numerous governmental authorities, principally the FDA and corresponding state and foreign regulatory agencies. Pursuant to the Federal Food, Drug and Cosmetic Act, the FDA regulates the pre-clinical and clinical testing, manufacture, labeling, distribution and promotion of medical devices.  We are not able to commence marketing or commercial sales in the United States of new products under development until we receive clearance or approval from the FDA, which can be a lengthy, expensive and uncertain process.  Clearance or approval to commercially distribute new medical devices would generally be received in one of two ways.  We must obtain the FDA’s authorization through clearance of a 510(k) notification or approval of a pre-market approval, or PMA, application.

The 510(k) clearance process requires us to demonstrate that our new product is substantially equivalent to a medical device first marketed prior to May 1976.  We must submit data that supports our claim of substantial equivalence.  The FDA recently has been requiring more rigorous demonstration of substantial equivalence than in the past, including in some cases requiring submission of clinical data and other performance data. It generally takes from four to twelve months from submission to obtain 510(k) pre-market clearance but may take longer. The FDA may determine that a proposed device is not substantially equivalent to a device first marketed prior to May 1976 or that additional information is needed before a substantial equivalence determination can be made.  A “not substantially equivalent” determination, or a request for additional information, could prevent or delay the market introduction of new products that fall into this category. The FDA may determine we must adhere to the more costly, lengthy and uncertain PMA application process.

For any devices that are cleared through the 510(k) process, modifications or enhancements that could significantly affect safety or effectiveness, or constitute a major change in the intended use of the device, will require new 510(k) submissions.  We have made modifications to our products since receipt of initial 510(k) clearance. With respect to several of these modifications, we filed new 510(k) notices describing the modifications and have received FDA clearance of those 510(k) notices. We made other modifications to some of our products that we believe do not require the submission of new 510(k) notices. There can be no assurance, however, that the FDA would agree with any of our determinations not to submit, or would not require us to submit, a new 510(k) notice for any of these modifications made to our products.  If the FDA requires us to submit a new 510(k) notice for any device modification, we may be prohibited from marketing the modified products until the 510(k) notice is cleared by the FDA.

A PMA application must be filed if a proposed device is not substantially equivalent to a medical device first marketed prior to May 1976.  A PMA application must be supported by valid scientific evidence to demonstrate the safety and effectiveness of the device, typically including the results of human clinical investigations, bench tests, laboratory and animal studies. The PMA application must also contain a complete description of the device and its components and a detailed description of the methods, facilities and controls used to manufacture the device. In addition, the submission must include the proposed labeling, advertising literature and any training materials. The PMA approval process can be expensive, uncertain and lengthy, and a number of devices for which FDA approval of a PMA application has been sought by other companies have never been approved for marketing.

We are also subject to the regulatory approval and compliance requirements for each foreign country to which we export our products.  In the European Union, a single regulatory approval process has been created, and approval is represented by the CE Mark.

Both before and after a product is commercialized, we have ongoing responsibilities under the regulations of the FDA and other agencies.  Noncompliance with applicable laws and the requirements of the FDA and other agencies can result in, among other things, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure of the government to grant pre-market clearance or pre-market approval for devices, withdrawal of marketing clearances or approvals, and criminal prosecution. The FDA has the authority to request recall, repair, replacement or refund of the cost of any device manufactured or distributed by us.  The FDA also administers certain controls over the export of medical devices from the United States.

We are subject to routine inspection by the FDA and certain state agencies for compliance with Quality System Requirement, or QSR, and Medical Device Reporting requirements and other applicable regulations. Changes in

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existing requirements or adoption of new laws or requirements could have a material adverse effect on our business, financial condition and results of operation. We may incur significant costs to comply with laws and regulations.

We are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with laws and regulations or such laws or regulations in the future may have a material adverse effect upon our business, financial condition and results of operations.

The Food and Drug Administration Modernization Act of 1997 makes changes to the device provisions of the FD&C Act and other provisions in the FD&C Act affecting the regulation of devices.  Among other things, the changes will affect the Investigational Device Exemption, 510(k) and PMA processes, and also will affect device standards and data requirements, procedures relating to humanitarian and breakthrough devices, tracking and post-market surveillance, accredited third-party review, and the dissemination of off-label information.  We cannot predict how or when these changes will be implemented or what effect the changes will have on the regulation of our products.  Any new legislation may impose additional costs or lengthen review times of our products.

We are uncertain of the regulatory approval path that the FDA will ultimately apply to our products currently in development.  We may not be able to obtain necessary regulatory approvals or clearances for our products on a timely basis, if at all.  Delays in receipt of or failure to receive such approvals or clearances, the loss of previously received approvals or clearances, limitations on intended use imposed as a condition of such approvals or clearances, or failure to comply with existing or future regulatory requirements would have a material adverse effect on our business, financial condition and results of operations.

We are dependent on others for the development of products.  The failure of our collaborations to successfully develop products would harm our business.

Our strategy for the research, development, commercialization and distribution of some of our products entails entering into various arrangements with third parties.  We are or will be dependent upon the success of these parties in performing their responsibilities. These parties may not perform their obligations as expected and no revenue may be derived from these arrangements.

We entered into agreements with clinical and commercial collaborators for the development and marketing of products. The agreements are subject to rights of termination and may be terminated.  Our collaborators may not abide by their contractual obligations and may discontinue or sell their current lines of business.  The research for which we receive or provide funding may not lead to the development of products.  We intend to enter into additional development and marketing agreements.  We may not be able to enter into agreements on acceptable terms, or at all.

We may not be able to manage our growth.

We have experienced growth and anticipate continued growth in the number of our employees, the scope of our operating and financial systems and the geographic area of our operations if market acceptance of our products increases and potential new products are developed and commercialized.  This growth will result in an increase in responsibilities for both existing and new management personnel. Our ability to manage growth effectively will require us to continue to implement and improve our operational, financial and management information systems and to train, motivate and manage our employees.  We may not be able to manage our expansion, and a failure to do so could have a material adverse effect on us.

Unanticipated acceleration of customer demand for our products has and may continue to result in constraints or inefficiencies related to our manufacturing, sales force, implementation resources and administrative infrastructure.  Such constraints or inefficiencies may adversely affect us as a result of delays, lost potential product sales or loss of current or potential customers due to their dissatisfaction.

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If we lose our key personnel or are unable to attract and retain additional personnel, we may not be able to pursue collaborations or develop our own products.

Our future success depends in part on the continued service of our key technical, sales, marketing and executive personnel, and our ability to identify, hire and retain qualified personnel.  Competition for such personnel is intense and we may not be able to retain existing personnel or identify or hire additional personnel.  If we are unable to retain existing personnel or identify or hire additional personnel, we may not be able to research, develop, commercialize or market our products, and as a result, our business may be harmed.

We May Have Significant Product Liability Exposure.

The testing, manufacturing and marketing of medical diagnostic devices entails an inherent risk of product liability claims.  Potential product liability claims may exceed the amount of our insurance coverage or may be excluded from coverage under the terms of the policy.  Our existing insurance may not be renewed at a cost and level of coverage comparable to that presently in effect, or at all.  In the event that we are held liable for a claim against which we are not indemnified or for damages exceeding the limits of our insurance coverage, our liabilities could exceed our total assets.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to changes in interest rates, primarily from our investments in available-for-sale marketable securities.  Under our current policies, we do not use interest rate derivatives instruments to manage this exposure to interest rate changes.  A hypothetical 1% adverse move in interest rates along the entire interest rate yield curve would not materially affect the fair value of our financial instruments that are exposed to changes in interest rates.

Additionally, our purchases of Triage MeterPlus from LREare denominated in Euros and sales of some products to some international customers are denominated in the local currency of customers.  We have on occasion purchased forward exchange contracts to manage this exposure to exchange rate changes.  As of March 31, 2003, we had no outstanding forward exchange contracts.  Total receivables and payables denominated in foreign currencies as of March 31, 2003 were not material.

ITEM 4.CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including the Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, an evaluation was performed of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) as of a date (the “Evaluation Date”) within 90 days prior to the filing date of this quarterly report.  Based upon that evaluation, the CEO and CFO concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective in timely alerting them to material information relating to us required to be disclosed in our periodic SEC filings.  There were no significant changes in our internal controls or, to our knowledge, in other factors that could significantly affect these internal controls subsequent to the Evaluation Date.

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Part II.  Other Information

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits

3.(i)(1)	Restated Certificate of Incorporation of Biosite, as amended.
3.(ii)	Amended and Restated Bylaws of Biosite Incorporated.
4.1(2)	Form of Common Stock Certificate with rights legend.
99.1	Section 1350 Certification of Kim D. Blickenstaff, Chief Executive Officer
99.2	Section 1350 Certification of Christopher J. Twomey, Chief Financial Officer
10.34	Biosite Incorporated Executive Bonus Plan

(1)	Incorporated by reference to the exhibits of the same number to Biosite’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.
(2)	Incorporated by reference to the exhibits of the same number to Biosite’s Registration Statement on Form S-1, No. 333-17657

(b)     Reports on Form 8-K

          None

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:  May 14, 2003	BIOSITE INCORPORATED
	By:	/s/ CHRISTOPHER J. TWOMEY
		Christopher J. Twomey
		Vice President, Finance and Chief Financial Officer
		(Principal Financial and Accounting Officer)

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CERTIFICATIONS

BIOSITE INCORPORATED

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Kim D. Blickenstaff, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Biosite Incorporated;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003
	/s/ Kim D. Blickenstaff
	Kim D. Blickenstaff
	President, Chief Executive Officer,
	Secretary and Treasurer

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BIOSITE INCORPORATED

CHIEF FINANCIAL OFFICER CERTIFICATIONS

I, Christopher J. Twomey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Biosite Incorporated;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003
	/s/ Christopher J. Twomey
	Christopher J. Twomey
	Vice President, Finance and
	Chief Financial Officer

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EX-3.II

Exhibit 3.(ii)

Amended and Restated Effective March 28, 2003

AMENDED AND RESTATED

BYLAWS

OF

BIOSITE INCORPORATED

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1.  Place of Meetings.  All meetings of the stockholders shall be held at such place within or without the State of Delaware as may be fixed from time to time by the Board of Directors or the chief executive officer, or if not so designated, at the registered office of the corporation.

Section 2.  Annual Meeting.  Annual meetings of stockholders shall be held at such date and time as shall be designated from time to time by the Board of Directors or the chief executive officer and stated in the notice of meeting.  At the annual meeting the stockholders shall elect by a plurality vote the number of directors equal to the number of directors of the class whose term expires at such meetings (or, if fewer, the number of directors properly nominated and qualified for election) to hold office until the third succeeding annual meeting of stockholders after their election.

At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting.  To be properly brought before an annual meeting, business must be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, otherwise properly brought before the meeting by or at the direction of the Board of Directors, or otherwise properly brought before the meeting by a stockholder.  In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the corporation.  To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the corporation, not less than 120 calendar days prior to the date the corporation’s proxy statement is released to stockholders in connection with the previous year’s annual meeting; provided, however, if the corporation did not hold an annual meeting the previous year of if the date of the current year’s annual meeting has been changed by more than 30 days from the date of the previous year’s meeting, then the deadline shall be a reasonable time before the corporation begins to mail and print its proxy materials.  A stockholder’s notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class and number of shares

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of the corporation which are beneficially owned by the stockholder and (iv) any material interest of the stockholder in such business.

Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section 2 by any stockholder of any business properly brought before the annual meeting in accordance with said procedure.

The chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section, and if the chairman should so determine, the chairman shall so declare to the meeting, and any such business not properly brought before the meeting shall not be transacted.

Section 3.  Special Meetings.  Special meetings of the stockholders, for any purpose or purposes, may, unless otherwise prescribed by statute or by the certificate of incorporation, be called only by the chairman of the Board of Directors or the chief executive officer or by a resolution adopted by the affirmative vote of a majority of the Board of Directors.  Business transacted at any special meeting shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

Section 4.  Notice of Meetings.  Except as otherwise provided by law, written notice of each meeting of stockholders, annual or special, stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder entitled to vote at such meeting.    If mailed, such notice shall be directed to a stockholder at his address as it shall appear on the stock record book of the corporation, unless the stockholder shall have filed with the secretary a written request that notices intended for him or her be mailed to some other address, in which case it shall be mailed to the address designated in such request.  Notice shall be deemed given when personally delivered or five days after deposited to the United States mail, as the case may be; provided, however, that such notice may also be given, pursuant to applicable law, by telegram, cablegram, facsimile, electronic mail, or other means of electronically transmitted written copy and in such case shall be deemed given when ordered or, if delayed delivery is ordered, as of such delayed delivery time, or when transmitted, as the case may be.

Section 5.  Voting List.  The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city or town where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

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Section 6.  Quorum.  The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute, the certificate of incorporation or these bylaws.

Section 7.  Adjournments.  Any meeting of stockholders may be adjourned from time to time to any other time and to any other place at which a meeting of stockholders may be held under these bylaws, which time and place shall be announced at the meeting, by a majority of the stockholders present in person or represented by proxy at the meeting and entitled to vote, though less than a quorum, or, if no stockholder is present or represented by proxy, by any officer entitled to preside at or to act as secretary of such meeting, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such reconvened meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the original meeting.  If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the reconvened meeting, a notice of the reconvened meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 8.  Action at Meetings.  When a quorum is present at any meeting, the vote of the holders of a majority of the stock present in person or represented by proxy and entitled to vote on the question shall decide any question brought before such meeting, unless the question is one upon which by express provision of law, the certificate of incorporation or these bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 9.  Voting and Proxies.  Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote for each share of capital stock having voting power held of record by such stockholder.  Each stockholder entitled to vote at a meeting of stockholders, or to express consent or dissent to corporate action in writing without a meeting, may authorize another person or persons to act for such stockholder by proxy; provided that the instrument authorizing such proxy to act shall have been executed in writing (which shall include telegraphing, cabling or other means of electronically transmitted written copy) by the stockholder personally or by the stockholder’s duly authorized attorney in fact.  No such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.

Section 10.  Action Without Meeting.  No action required or permitted to be taken at any annual or special meeting of the stockholders of the corporation may be taken without a meeting and the power of the stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied.

Section 11.  Inspector of Elections.   The Board of Directors may appoint inspectors of election to serve at any election of directors and at balloting on any other matter that may properly come before a meeting of stockholders.  If no such appointment shall be made, or if any of the inspectors so appointed shall fail to attend, or refuse or be unable to serve, then such appointment may be made by the presiding officer of the meeting at the meeting.

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ARTICLE II

DIRECTORS

Section 1.  Number, Election, Tenure and Qualification.  The number of directors which shall constitute the whole board shall not be less than three nor more than eight.  Within such limit, the number of directors shall be determined by resolution of the Board of Directors or by the stockholders at the annual meeting or at any special meeting of stockholders.  The directors shall be elected at the annual meeting or at any special meeting of the stockholders, except as provided in Section 3 of this Article, and each director elected shall hold office until such director’s successor is elected and qualified, unless sooner displaced.  Directors need not be stockholders.

Section 2.  Enlargement.  The number of the Board of Directors may be increased at any time by vote of a majority of the directors then in office.

Section 3.  Nominations.  Subject to the rights of holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, nominations for election to the Board of Directors of the corporation at a meeting of stockholders may be made on behalf of the board by the nominating committee appointed by the board, or by any stockholder of the corporation entitled to vote for the election of directors at such meeting.  Such nominations, other than those made by the nominating committee on behalf of the board, shall be made by notice in writing delivered or mailed by first class United States mail or a nationally recognized courier service, postage prepaid, to the secretary or assistant secretary of the corporation, and received by such officer not less than one hundred twenty (120) days prior to any meeting of stockholders called for the election of directors.  Such notice shall set forth as to each proposed nominee who is not an incumbent director (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice; (ii) the principal occupation or employment of each such nominee; (iii) the number of shares of stock of the corporation which are beneficially owned by each such nominee and by the nominating stockholder; and (iv) any other information concerning the nominee that must be disclosed of nominees in proxy solicitations regulated by Regulation 14A of the Securities Exchange Act of 1934, as amended.

The chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if the chairman should so determine, the chairman shall so declare the meeting and the defective nomination shall be disregarded.

Section 4.  Vacancies.  Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election at which the term of the class to which they have been elected expires and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by statute.  In the event of a vacancy in the Board of Directors, the

4

remaining directors, except as otherwise provided by law or these bylaws, may exercise the powers of the full board until the vacancy is filled.

Section 5.  Resignation and Removal.  Any director may resign at any time upon written notice to the corporation at its principal place of business or to the chief executive officer or the secretary.  Such resignation shall be effective upon receipt of such notice unless the notice specifies such resignation to be effective at some other time or upon the happening of some other event.  Any director or the entire Board of Directors may be removed, but only for cause, by the holders of a majority of the shares then entitled to vote at an election of directors, unless otherwise specified by law or the certificate of incorporation.

Section 6.  General Powers.  The business and affairs of the corporation shall be managed by its Board of Directors, which may exercise all powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

Section 7.  Chairman of the Board.  If the Board of Directors appoints a chairman of the board, such chairman shall, when present, preside at all meetings of the stockholders and the Board of Directors.  The chairman shall perform such duties and possess such powers as are customarily vested in the office of the chairman of the board or as may be vested in the chairman by the Board of Directors.

Section 8.  Place of Meetings.  The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware.

Section 9.  Regular Meetings.  Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the board; provided that any director who is absent when such a determination is made shall be given prompt notice of such determination.  Whenever the time or place of regular meetings shall be fixed or changed, notice of such action shall be mailed promptly to each director who shall not have been present at the meeting at which such action was taken.  A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.

Section 10.  Special Meetings.  Special meetings of the board may be called by the chief executive officer, secretary, or on the written request of two or more directors, or by one director in the event that there is only one director in office.  Four (4) hours’ notice to each director, either personally or by telegram, cable, telecopy, commercial delivery service, telex, electronic mail, or similar means sent to his business or home address, or three days’ notice by written notice deposited in the mail or delivered by a nationally recognized courier service, shall be given to each director by the secretary or by the officer or one of the directors calling the meeting.  A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting unless otherwise required by statute, the certificate of incorporation or these bylaws..

Section 11.  Quorum, Action at Meeting, Adjournments.  At all meetings of the board, a majority of directors then in office, but in no event less than one third of the entire board, shall

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constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by law or by the certificate of incorporation.  For purposes of this section, the term “entire board” shall mean the number of directors last fixed by the stockholders or directors, as the case may be, in accordance with law and these bylaws; provided, however, that if less than all the number so fixed of directors were elected, the “entire board” shall mean the greatest number of directors so elected to hold office at any one time pursuant to such authorization.  If a quorum shall not be present at any meeting of the Board of Directors, a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 12.  Action by Consent.  Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 13.  Telephonic Meetings.  Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board of Directors or of any committee thereof may participate in a meeting of the Board of Directors or of any committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 14.  Committees.  The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.  Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution designating such committee or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock.  Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.  Each committee shall keep regular minutes of its meetings and make such reports to the Board of Directors as the Board of Directors may request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these bylaws for the conduct of its business by the Board of Directors.

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Section 15.  Compensation.  Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board of Directors shall have the authority to fix from time to time the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and the performance of their responsibilities as directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors and/or a stated salary as director.  No such payment shall preclude any director from serving the corporation or its parent or subsidiary corporations in any other capacity and receiving compensation therefor.  The Board of Directors may also allow compensation for members of special or standing committees for service on such committees.

ARTICLE III

OFFICERS

Section 1.  Enumeration.  The officers of the corporation shall be chosen by the Board of Directors and shall be a president, a secretary and a chief financial officer and such other officers with such titles, terms of office and duties as the Board of Directors may from time to time determine, including one or more vice-presidents, and one or more assistant secretaries and assistant financial officers.  If authorized by resolution of the Board of Directors, the chief executive officer may be empowered to appoint from time to time assistant secretaries and assistant financial officers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these bylaws otherwise provide.

Section 2.  Election.  The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a president, a secretary and a chief financial officer.  Other officers may be appointed by the Board of Directors at such meeting, at any other meeting, or by written consent.

Section 3.  Tenure.  The officers of the corporation shall hold office until their successors are chosen and qualify, unless a different term is specified in the vote choosing or appointing such officer, or until such officer’s earlier death, resignation or removal.  Any officer elected or appointed by the Board of Directors or by the chief executive officer may be removed at any time by the affirmative vote of a majority of the Board of Directors or a committee duly authorized to do so, except that any officer appointed by the chief executive officer may also be removed at any time by the chief executive officer.  Any vacancy occurring in any office of the corporation may be filled by the Board of Directors, at its discretion.  Any officer may resign by delivering such officer’s written resignation to the corporation at its principal place of business or to the chief executive officer or the secretary.  Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

Section 4.  President.  The president shall be the chief operating officer of the corporation.  The president shall also be the chief executive officer unless the Board of Directors otherwise provides.  The president shall, unless the Board of Directors provides otherwise in a specific instance or generally, preside at all meetings of the stockholders and the Board of Directors, have general and active management of the business of the corporation and see that all orders and resolutions of the Board of Directors are carried into effect.  The

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president shall execute bonds, mortgages, and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.  The president shall also perform such duties as are assigned by these bylaws or as from time to time may be assigned by the Board of Directors.

Section 5.  Vice-Presidents.  In the absence of the president or in the event of the president’s inability or refusal to act, the vice-president, or if there be more than one vice-president, the vice-presidents in the order designated by the Board of Directors or the chief executive officer (or in the absence of any designation, then in the order determined by their tenure in office) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the Board of Directors or the chief executive officer may from time to time prescribe.

Section 6.  Secretary.  The secretary shall have such powers and perform such duties as are incident to the office of secretary.  The secretary shall maintain a stock ledger and prepare lists of stockholders and their addresses as required and shall be the custodian of corporate records.  The secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be from time to time prescribed by the Board of Directors or chief executive officer, under whose supervision the secretary shall be.  The secretary shall have custody of the corporate seal of the corporation and the secretary, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the secretary’s signature or by the signature of such assistant secretary.  The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by such officer’s signature.

Section 7.  Assistant Secretaries.  The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the Board of Directors, the chief executive officer or the secretary (or if there be no such determination, then in the order determined by their tenure in office), shall, in the absence of the secretary or in the event of the secretary’s inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the Board of Directors, the chief executive officer or the secretary may from time to time prescribe.  In the absence of the secretary or any assistant secretary at any meeting of stockholders or directors, the person presiding at the meeting shall designate a temporary or acting secretary to keep a record of the meeting.

Section 8.  Chief Financial Officer.  The chief financial officer shall perform such duties and shall have such powers as may be assigned to such officer by the Board of Directors or the chief executive officer.  The chief financial officer shall also be the treasurer unless the Board of Directors otherwise provides.  In addition, the chief financial officer shall perform such

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duties and have such powers as are incident to the office of chief financial officer.  The chief financial officer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors.  The chief financial officer shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the chief executive officer and the Board of Directors, when the chief executive officer or Board of Directors so requires, an account of all such officer’s transactions as chief financial officer and of the financial condition of the corporation.

Section 9.  Assistant Financial Officers.  The assistant financial officer, or if there shall be more than one, the assistant financial officers in the order determined by the Board of Directors, the chief executive officer or the chief financial officer (or if there be no such determination, then in the order determined by their tenure in office), shall, in the absence of the chief financial officer or in the event of the chief financial officer’s inability or refusal to act, perform the duties and exercise the powers of the chief financial officer and shall perform such other duties and have such other powers as the Board of Directors, the chief executive officer or the chief financial officer may from time to time prescribe.

Section 10.  Bond.  If required by the Board of Directors, any officer shall give the corporation a bond in such sum and with such surety or sureties and upon such terms and conditions as shall be satisfactory to the Board of Directors, including without limitation a bond for the faithful performance of the duties of such officer’s office and for the restoration to the corporation of all books, papers, vouchers, money and other property of whatever kind in such officer’s possession or under such officer’s control and belonging to the corporation.

Section 11.  Delegation of Authority.  The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.

ARTICLE IV

NOTICES

Section 1.  Delivery.  Whenever, under the provisions of law, or of the certificate of incorporation or these bylaws, written notice is required to be given to any director or stockholder, such notice may be given by mail, addressed to such director or stockholder, at such person’s address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail or delivered to a nationally recognized courier service.  Unless written notice by mail is required by law, written notice may also be given by telegram, cable, facsimile, commercial delivery service, telex or similar means, addressed to such director or stockholder at such person’s address as it appears on the records of the corporation, in which case such notice shall be deemed to be given when delivered into the control of the persons charged with effecting such transmission, the transmission charge to be paid by the corporation

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or the person sending such notice and not by the addressee.  Oral notice or other in-hand delivery (in person or by telephone) shall be deemed given at the time it is actually given.

Section 2.  Waiver of Notice.  Whenever any notice is required to be given under the provisions of law or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

INDEMNIFICATION

Section 1.  Actions Other Than by or in the Right of the Corporation.  The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceedings, had no reasonable cause to believe such person’s conduct was unlawful.  The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

Section 2.  Actions by or in the Right of the Corporation.  The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of such person’s duty to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.

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Section 3.  Success on the Merits.  To the extent that any person described in Section 1 or 2 of this Article V has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in said Sections, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

Section 4.  Specific Authorization.  Any indemnification under Section 1 or 2 of this Article V (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of any person described in said Sections is proper in the circumstances because such person has met the applicable standard of conduct set forth in said Sections.  Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding; or (ii) if such a quorum is not obtainable, or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or (iii) by the stockholders of the corporation.

Section 5.  Advance Payment.  Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the manner provided for in Section 4 of this Article V upon receipt of an undertaking by or on behalf of any person described in said Section to repay such amount unless it shall ultimately be determined that such person is entitled to indemnification by the corporation as authorized in this Article V.

Section 6.  Non-Exclusivity.  The indemnification provided by this Article V shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be director, officer, employee or agent of the corporation and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 7.  Insurance.  The Board of Directors may authorize, by a vote of the majority of the full board, the corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of this Article V.

Section 8.  Severability.  If any word, clause or provision of this Article V or any award made hereunder shall for any reason be determined to be invalid, the provisions hereof shall not otherwise be affected thereby but shall remain in full force and effect.

Section 9.  Intent of Article.  The intent of this Article V is to provide for indemnification to the fullest extent permitted by section 145 of the General Corporation Law of Delaware.  To the extent that such Section or any successor section may be amended or

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supplemented from time to time, this Article V shall be amended automatically and construed so as to permit indemnification to the fullest extent from time to time permitted by law.

ARTICLE VI

CAPITAL STOCK

Section 1.  Certificates of Stock.  Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the chairman or vice-chairman of the Board of Directors, or the president or a vice-president and the chief financial officer or an assistant financial officer, or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such stockholder in the corporation.  Any or all of the signatures on the certificate may be a facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.  Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor, and the amount paid thereon shall be specified.

Section 2.  Lost Certificates.  The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed.  When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner’s legal representative, to give reasonable evidence of such loss, theft or destruction, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of such new certificate.

Section 3.  Transfer of Stock.  Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares, duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, and proper evidence of compliance with other conditions to rightful transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 4.  Record Date for Action at a Meeting or for Other Purposes.  In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action to which such record date relates.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to

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any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held.  The record date for determining stockholders for any other purpose within this Section 4 shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

Section 5.  Registered Stockholders.  The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII

CERTAIN TRANSACTIONS

Section 1.  Transactions with Interested Parties.  No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee thereof which authorizes the contract or transaction or solely because the vote or votes of such director or officer are counted for such purpose, if:

(a)           the material facts as to such person’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

(b)           the material facts as to such person’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

(c)           the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders.

Section 2.  Quorum.  Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

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ARTICLE VIII

GENERAL PROVISIONS

Section 1.  Dividends.  Dividends upon the capital stock of the corporation, if any, may be declared by the Board of Directors at any regular or special meeting or by written consent, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Section 2.  Reserves.  The directors may set apart out of any funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.

Section 3.  Checks.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 4.  Fiscal Year.  The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

Section 5.  Seal.  The Board of Directors may, by resolution, adopt a corporate seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the word “Delaware.”  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.  The seal may be altered from time to time by the Board of Directors.

ARTICLE IX

AMENDMENTS

The Board of Directors is expressly empowered to adopt, amend or repeal these bylaws, provided, however, that any adoption, amendment or repeal of these bylaws by the Board of Directors shall require the approval of at least sixty-six and two-thirds percent (66 ²/₃%) of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any resolution providing for adoption, amendment or repeal is presented to the board).  The stockholders shall also have power to adopt, amend or repeal these bylaws, provided, however, that in addition to any vote of the holders of any class or series of stock of this corporation required by law or by the certificate of incorporation of this corporation, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 ²/₃%) of the voting power of all of the then outstanding shares of the stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for such adoption, amendment or repeal by the stockholders of any provisions of these bylaws.

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CERTIFICATE OF SECRETARY

I hereby certify:

1.             That I am the duly elected and acting Secretary of Biosite Incorporated, a Delaware corporation; and

2.             That the foregoing bylaws, comprising 14 pages, constitute the amended and restated bylaws of such corporation as duly adopted by directors of the corporation at a duly held meeting of the Board of Directors on March 28, 2003, became effective as of that date.

IN WITNESS WHEREOF, I have hereunder subscribed my name this 28 day of March, 2003.

/s/ CHRISTOPHER J. TWOMEY

Christopher J. Twomey

Secretary

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EX-10.34

Exhibit 10.34

BIOSITE INCORPORATED

EXECUTIVE BONUS PLAN

Adopted Effective January 1, 2003

1.PURPOSE OF PLAN.

Biosite Incorporated (the “Company”) hereby establishes this Executive Bonus Plan (the “Plan”) to permit Participants in this Plan to earn incentive bonuses in reward for superior performance in their positions with the Company and to align their interests with those of the stockholders of the Company.  Capitalized terms not explicitly defined in the text will have the meanings given them in Section 10 below.

2.PARTICIPATION.

Only Executives of the Company who are designated by the Board or the Compensation Committee to participate in this Plan shall be Participants in this Plan.  Participation in the Plan shall be determined on an annual basis by the Board or the Compensation Committee.

3.BONUS TERMS.

Each fiscal year of the Company, the Board or the Compensation Committee shall designate which of the Executives of the Company shall be Participants in this Plan and determine the terms and conditions and the potential amounts of bonuses each of such Executives shall be eligible to earn and receive under this Plan based on an assessment by the Compensation Committee of the performance of such Executives as provided herein.

(a)Grant of Bonus Rights.  The terms and conditions of any Bonus Rights granted to a Participant under this Plan are set forth herein and in any Bonus Rights Notice delivered to the Participant.  The terms and conditions of such Bonus Rights shall be as set forth herein unless different provisions are expressly provided in the Bonus Rights Notice delivered to the Participant.

(b)Terms and Conditions of Bonus Rights.  Subject to the provisions of this Plan, the Board or the Compensation Committee shall have the discretionary authority to establish the terms and conditions for any Bonus Rights granted under this Plan.

(i)Determination of Performance Goals.  The Board or the Compensation Committee shall determine the performance goals on which each Participant shall be evaluated for a fiscal year.  By example and not as a limitation, such performance goals may include:

(A)Financial Goals.  Financial goals may include targeted revenue, targeted net income, targeted operating income, revenue growth, earnings growth, operating income growth, profitability, earnings per share and earnings per share growth.

(B)Qualitative Goals.  Qualitative goals may include achievements in areas such as product and technology leadership, growth in market share, implementation of key business programs, customer satisfaction, cash flow, and cost and expense management.

(C)Milestone Goals.  Milestone goals may include the achievement of specific objectives for a particular Participant for the fiscal year.

(ii)Measurement of Performance.  The Compensation Committee shall have the authority and discretion to determine if the Participants, and any of them, have achieved the pre-determined goals for such Participants and to measure their performance for purposes of the Plan.

(iii)Additional Terms of Bonus Rights. The provisions of individual Bonus Rights Notices need not be identical, but each Bonus Rights Notice shall include (through incorporation of provisions hereof by reference in the Bonus Rights Notice or otherwise) the substance of each of the following provisions:

(A)Termination of Employment.  Except as otherwise provided below in this Section 3(b), no portion of a Bonus Right shall be paid to a Participant who does not remain in Employment with the Company through the payment date for the bonus under such Bonus Right.  Any portion of a Bonus Right so forfeited by the Participant who has terminated his or her Employment shall not be reallocated to other Participants in the Plan.

(B)Termination for Cause, Death or Disability.  Notwithstanding any provision herein to the contrary, in the event that the Employment of a Participant is terminated:

(1)for Cause as determined in good faith by the Board, then such Participant shall not be entitled to receive any bonuses under this Plan; and

(2) due to the death or Disability of the Participant, then the Participant or his or her probate estate shall be entitled to any bonuses otherwise payable to the Participant under this Plan.

Notwithstanding any provision herein to the contrary, if the employment of a Participant is terminated for reasons other than (i) Cause, (ii) death, or (iii) Disability, the Participant will continue to have the right to retain a Bonus Right for any bonuses payable in the current quarter of such termination.

(iii)Other Terms.  The Board or the Compensation Committee may establish additional terms of the Bonus Rights of a Participant, including imposing vesting requirements, as the Board or the Compensation Committee may determine in its sole discretion.

(c)Amounts and Types of Bonuses.  The Board or the Compensation Committee may in its discretion establish the target bonus amount and potential bonuses based on a formula or schedule or a fixed amount for each Participant which formula or schedule or fixed amount

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shall be set forth in the Bonus Rights Notice to the Participant.  As provided in a Bonus Rights Notice, a Participant may be entitled to earn and receive one or more bonuses as described below.

(i)Formula or Schedule.  Bonuses for Participants under this Plan may be based on a predetermined formula or schedule adopted by the Board or the Compensation Committee prior to (1) the end of the fiscal quarter for which the bonuses shall be paid for bonuses based on performance over the fiscal quarter and for which the bonus is payable, and (2) the 90^th day of the fiscal year for which the bonuses shall be paid for bonuses based on performance over the fiscal year.

(ii)Fixed Bonus Amount.   Bonuses for Participants under this Plan may be set at fixed amounts as adopted by the Board or the Compensation Committee prior to the end of the fiscal year for which the bonuses shall be paid.

(iii)Discretionary Bonus.  The Board or the Compensation Committee shall have the discretion, but not the obligation, to grant a discretionary bonus (in a fixed bonus amount or pursuant to a formula or schedule) under the Plan for superior performance.

(d)Form of Bonus Payments.  Bonuses shall be payable in cash unless another form of payment as determined by the Board or the Compensation Committee is provided for in the Bonus Rights Notice.

(e)Determination of Amounts of and Entitlement to Bonuses Payable under this Plan.  The Compensation Committee shall determine the entitlement of a Participant to a bonus under the Plan based on an assessment of his or her performance for the fiscal year or other time period specified in the Bonus Rights Notice.  Such determination shall be made in good faith.

(f)Accrual and Time of Payment of Bonuses.   Any bonuses payable under this Plan shall be paid to eligible Participants by the Company within a reasonable period of time in which it can practicably make such distributions, except as otherwise provided herein.

(g)Consequences of Restatement of Financial Reports.  To the extent required by the provisions of the Sarbanes-Oxley Act of 2002, in the event that the Company is required to restate its financial statements due to an error in such financial statements, then any bonuses payable under this Plan to the Chief Executive Officer and Chief Financial Officer of the Company shall be disgorged by such officers and returned to the Company.

(h)Deferral of Receipt of Bonuses.  The receipt of bonuses payable under this Plan may be deferred by a Participant as permitted under a nonqualified deferred compensation plan or the tax-qualified 401(k) plan of the Company as provided in such plans.

4.ADMINISTRATION.

The Compensation Committee shall be responsible for the administration of this Plan and may exercise such additional powers and authorities as the Board may delegate to the Compensation Committee which are not otherwise provided for herein.  The Compensation

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Committee shall have the power, subject to, and within the limitations of, the express provisions of this Plan:

(a)To construe and interpret this Plan and any Bonus Rights granted under it in the Compensation Committee’s sole discretion, and to establish, amend and revoke rules and regulations for its administration. The Compensation Committee, in the exercise of this power, may correct any defect, omission or inconsistency in this Plan or in any Bonus Rights, in a manner and to the extent it shall deem necessary or expedient to make this Plan fully effective.

(b)Generally, to exercise such powers and to perform such acts as the Compensation Committee deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of this Plan.

(c)Where the Compensation Committee is granted authority under this Plan to take any action described in this Plan, the Company Committee may exercise such authority to take the action described in this Plan or make a recommendation to the Board for the Board to consider in taking such action.

To the extent this Plan and the Bonus Rights granted under this Plan are intended to qualify for the performance-based exemption from the tax deduction limit of Section 162(m) of the Code, the Compensation Committee (or a sub-committee of the Compensation Committee appointed by the Board that satisfies the requirements for a compensation committee comprised of outside directors within the meanings of such terms in Section 162(m) of the Code and the income tax regulations promulgated thereunder including but not limited to Treasury Regulation section 1.162-27(e)) shall have the authority and responsibility of the Compensation Committee under this Plan after such Plan has satisfied such other conditions for such exemption as required by Section 162(m) of the Code and the income tax regulations promulgated thereunder.

5.MISCELLANEOUS.

(a)Nonexclusivity. Nothing herein shall prevent, limit or affect any Participant’s continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company and for which the Participant may otherwise qualify. Except as otherwise expressly provided herein, amounts which are vested benefits or payments or which a Participant is otherwise entitled to receive under any other plan, policy, practice or program, or as a stockholder of the Company shall be payable in accordance with such plan, policy, practice or program.

(b)Acceleration of Payment and Vesting of Bonus.

(i)In General.  The Board and the Compensation Committee shall have the power to accelerate the time at which a Bonus Right may be paid or the time during which a Bonus Right or any part thereof will vest in accordance with this Plan, or the provisions in the Bonus Right stating the time during which a bonus will be paid or vest.

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(ii)Corporate Transactions.  Except and to the extent as waived or consented to by Participants, the Company will not, through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, Change of Control or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Plan and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Participants to receive Bonus Rights without impairment.

In the event of a Change of Control, then any surviving corporation or acquiring corporation shall assume the Company’s obligation for any Bonus Rights outstanding under the Plan. In the event any surviving corporation or acquiring corporation refuses to assume the Company’s obligation for such Bonus Rights, then with respect to the Bonus Rights held by a Participant whose Employment has not terminated, the Bonus Rights shall be payable in full on or prior to such event.

(c)No Employment or Other Service Rights. Nothing in this Plan or any instrument executed or Bonus Rights granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Bonus Rights was granted or shall affect the right of the Company to terminate the employment of an Executive with or without notice and with or without Cause and any applicable provisions of the corporate law of the state in which the Company is incorporated, as the case may be.

(d)Withholding Obligations. All payments of Bonus Rights will be subject to withholding of applicable income and employment taxes.

(e)No Transferable Rights. Except as provided in Section 6 or in the Participant’s Bonus Rights Notice or otherwise consented to by the Company in writing, a Participant in this Plan shall not have any rights or interests under this Plan which may be transferred, assigned, pledged or hypothecated, and any attempts to transfer, assign, pledge or hypothecate a right or interest in this Plan without the consent of the Company shall be void and unenforceable and shall cause the Bonus Rights of the Participant to be forfeited.

(f)Non-ERISA Plan. This Plan is a bonus plan and not an “employee benefit plan” within the meaning of that term as defined in Section 3(3) of the federal Employee Retirement Income Security Act of 1974, as amended.

6.SUCCESSORS.

Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) of all or substantially all of the Company’s business and/or assets shall assume the obligations under this Plan and agree expressly to perform the obligations under this Plan in the same manner and to the same extent as the Company would be required to perform such obligations. The terms of this Plan and all rights of a Participant hereunder shall inure to the benefit of, and be enforceable by, the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

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7.AMENDMENT OF THIS PLAN AND BONUS RIGHTS.

(a)Amendment of this Plan. The Board and the Compensation Committee at any time, and from time to time, may amend this Plan; provided, however, that rights under any Bonus Rights granted before an amendment of this Plan shall not be impaired by such amendment of this Plan unless the Board or the Compensation Committee requests the consent of the Participant and the Participant consents in writing.

(b)Amendment of Bonus Rights. The Board and the Compensation Committee at any time, and from time to time, may amend the terms of any one or more Bonus Rights; provided, however, that the rights under any Bonus Rights shall not be impaired by any such amendment unless the Board or the Compensation Committee requests the consent of the Participant and the Participant consents in writing.

8.TERMINATION OR SUSPENSION OF THIS PLAN.

(a)Plan Term.  This Plan, as set forth herein, shall become effective as of the Effective Date.  The Board may suspend or terminate the Plan at any time.  No Bonus Rights may be granted under this Plan while this Plan is suspended or after it is terminated.

(b)No Impairment of Rights. Except as otherwise provided for below, a suspension or termination of this Plan shall not impair rights and obligations under any Bonus Rights granted while this Plan is in effect except with the written consent of the Participant. This Plan shall not terminate or expire with respect to any Participant who becomes entitled to any Bonus Rights hereunder until such Participant shall have received any bonus payment pursuant to such Bonus Right in full in accordance with the terms of this Plan.

9.CHOICE OF LAW.

The laws of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

10.DEFINITIONS.

(a)“Board” means the Board of Directors of the Company, provided that any Participant who is a member of the Board shall not be permitted to take part in any action or determination by the Board with respect to the Plan or any Bonus Rights awarded under the Plan.

(b)“Bonus Right” means the right to earn a bonus as provided for in Section 3 of this Plan which shall be subject to the terms of this Plan and the terms and conditions of the Bonus Rights Notice and such other agreements that the Board or the Compensation Committee may reasonably require.

(c)“Bonus Rights Notice” means a written notice delivery by the Board or the Compensation Committee to a Participant evidencing the terms and conditions of his or her

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individual Bonus Right.  Each Bonus Rights Notice shall be subject to the terms and conditions of this Plan except as otherwise provided in this Plan.

(d)“Cause” means that, prior to termination of Employment, a Participant shall have committed, based upon a reasonable determination by the Company: (i) an intentional act of fraud, embezzlement or theft in connection with the Participant’s duties or in the course of the Participant’s Employment, (ii) conduct demonstrating gross unfitness to serve or job abandonment, (iii) intentional wrongful disclosure of secret processes or confidential information of the Company, or (iv) intentional, material violation of any employee policy of the Company or contract between the Company and the Participant or any statutory duty of the Participant to the Company in which such violation shall have been harmful to the Company or an Affiliate.

(e)“Change of Control” means any one of the following transactions:

(i)a sale, lease or other disposition of all or substantially all of the assets of the Company,

(ii)a consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than 50% of the Company’s outstanding voting power of the surviving entity (or its parent) following the consolidation, merger or reorganization, or

(iii)any transaction (or series of related transactions involving a person or entity, or a group of affiliated persons or entities) in which in excess of fifty percent (50%) of the Company’s outstanding voting power is transferred.

Notwithstanding the foregoing, the term shall not include a reincorporation by the Company to change the state of its incorporation.

(f)“Code” means the Internal Revenue Code of 1986, as amended.

(g)“Compensation Committee” means the Compensation Committee of the Board, provided that any Participant who is a member of the Compensation Committee shall not be permitted to take part in any action or determination by the Compensation Committee with respect to the Plan or any Bonus Rights awarded under the Plan..

(h)“Company” means Biosite Incorporated, a Delaware corporation, and any successor or acquiring entity as the result of an acquisition or asset sale of the Company.

(i)“Disability” means the permanent and total disability of a Participant within the meaning of the term in Section 22(e)(3) of the Code as determined by the Board or the Compensation Committee in good faith or as determined by a physician appointed by the Board or the Compensation Committee licensed in the state in which the Participant resides or works for the Company.

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(j)“Effective Date” means the effective date of this Plan which shall be January 1, 2003.

(l)“Employment” means continuous employment as an employee on the payroll of the Company.

(m)“Executive” means a person employed by the Company as an officer or other executive employee on or after the Effective Date.

(n)“Participant” means an Executive designated to participate in the Plan as provided in Section 2 of this Plan.

To record the adoption of this Plan by the Company, the Board has caused the authorized member of the Board below to execute the same as of the 1st day of April, 2003, to be effective as of January 1, 2003.

BIOSITE INCORPORATED
By:	/s/ Timothy J. Wollheger
Name:		Timothy J. Wollheger
Member of Board of Directors of Biosite Incorporated

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EX-99.1

EXHIBIT 99.1

CERTIFICATION PURSUANT TO

SECTION 1350 OF CHAPTER 63 OF 18 U.S.C.

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Biosite Incorporated (the “Company”) on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kim D. Blickenstaff, Chief Executive Officer of the Company, certify pursuant to § 1350 of Chapter 63 of 18 U.S.C., as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the ecurities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by the Report.

/s/ Kim D. Blickenstaff

Kim D. Blickenstaff

Chief Executive Officer

May 14, 2003

A signed original of this written statement required by Section 906 has been provided to Biosite Incorporated and will be retained by Biosite Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-99.2

EXHIBIT 99.2

CERTIFICATION PURSUANT TO

SECTION 1350 OF CHAPTER 63 OF 18 U.S.C.

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Biosite Incorporated (the “Company”) on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher J. Twomey, Chief Financial Officer of the Company, certify pursuant to § 1350 of Chapter 63 of 18 U.S.C., as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by the Report.

/s/ Christopher J. Twomey

Christopher J. Twomey

Chief Financial Officer

May 14, 2003

A signed original of this written statement required by Section 906 has been provided to Biosite Incorporated and will be retained by Biosite Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.