<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                Form 10-K/A NO. 1
[ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                 For the Fiscal Year Ended December 31, 1997, or

[   ]    TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15 (d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from         to        .

                         Commission File Number: 0-28078

                                   FemRx, Inc.
             (Exact name of registrant as specified in its charter)

          Delaware             .                           77-0389440    . 
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

                    1221 Innsbruck Drive Sunnyvale, CA 94089
                     (Address of principal executive office)

       Registrant's telephone number, including area code: (408) 752-8580

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, $0.001 par value per share
                   Preferred Stock, $0.001 par value per share

Indicate by check mark whether the registrant (1) has filed all reports required
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 reguired
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. [ X ] Yes [ ] No

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

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant  was  approximately  $7,623,000 as of March 16, 1998,  based upon the
closing price on the Nasdaq National  Market  reported for such date.  Shares of
Common Stock held by each officer and director and by each person who owns 5% or
more of the outstanding Common Stock have been excluded in that such persons may
be  deemed to be  affiliates.  This  determination  of  affiliate  status is not
necessarily a conclusive determination for other purposes.

There were 8,844,724 shares of Registrant's  Common Stock issued and outstanding
as of March 16, 1998.

                                       1
<PAGE>

                                            
                                    Part III.

Item 10. Directors and Executive Officers of the Registrant

     The information relating to Directors and Executive Officers of the Company
is contained in Part I, Item 1 of this report.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a)of the Securities Exchange Act of 1934, as amended,  requires
the Company's  directors and executive  officers,  and persons who own more than
ten percent of a registered  class of the Company's equity  securities,  to file
with the  Securities  and Exchange  Commission  (the "SEC")  initial  reports of
ownership  and reports of changes in  ownership of Common Stock and other equity
securities  of the  Company.  Officers,  directors  and greater than ten percent
stockholders  are required by SEC  regulation to furnish the Company with copies
of all Section 16(a)forms they file.

     To the Company's knowledge,  based solely on a review of the copies of such
reports  furnished  to the  Company and  written  representations  that no other
reports  were  required,  during the fiscal year ended  December 31,  1997,  all
Section 16(a) filing  requirements  applicable  to its  officers,  directors and
greater than ten percent beneficial owners were complied with.



Item 11. Executive Compensation

     The  following  table shows for the fiscal years ended  December 31,  1997,
1996, 1995,  compensation  awarded or paid to, or earned by, the Company's Chief
Executive Officer and its other four most highly compensated  executive officers
at December 31, 1997 (the "Named Executive Officers"):
<TABLE>
<CAPTION>


                           Summary Compensation Table

                                                          Annual
                                                       Compensation
                                                                   Securities
                                               Salary    Bonus     Underlying
 Name and Principal Position            Year    ($)       ($)      Options (1)
 ---------------------------            ----    ---       ---      -----------
<S>                                     <C>      <C>      <C>       <C>
 
 Andrew M. Thompson                     1997     172,464      ---   80,000
 President and Chief Executive Officer  1996     150,000   16,500      ---
                                        1995     106,714   25,000      ---

 George M. Savage, M.D.                 1997     172,486      ---   80,000
 Senior Vice President, Research and    1996     150,000   16,500      ---
 Development                            1995     106,714   25,000      ---
 Edward W. Unkart                       1997     144,357      ---   75,000
 Vice President, Finance and            1996     125,008   11,563      ---
 Administration, Chief Financial        1995(2)      ---      ---      --- 
 Officer and Assistant Secretary        
 

 Jeffrey J. Christian                   1997     155,458      ---   75,000
 Vice President, Engineering            1996     142,789   17,325      ---
                                        1995(2)      ---      ---    5,000

 Marshall Tsuruda                       1997     124,041     ---   110,000
 Vice President, Operations             1996(3)      ---     ---    50,000
                                        1995         ---     ---       ---   

</TABLE>

                                       2
<PAGE>
     

(1)  Repriced options treated as new grants.

(2)  Messrs.  Unkart and Christian  were employed by the Company for less than a
     full year  during the  fiscal  year ended  December  31,  1995 and for that
     reason, earned less than $100,000 in compensation from the Company.

(3)  Mr.  Tsuruda  was  employed by the Company for less than a full year during
     the fiscal year ended  December 31,  1996 and for that reason,  earned less
     than $100,000 in compensation from the Company.


                        STOCK OPTION GRANTS AND EXERCISES

     The Company grants  options to its executive  officers under its 1995 Stock
Option  Plan  (the  "1995  Plan").  The 1995  Plan was  adopted  by the Board of
Directors in April 1995 and has been amended three times, most recently in March
1997,  subject to stockholder  approval.  Pursuant to the 1995 Plan, the Company
may grant incentive and nonstatutory  stock options to key employees,  directors
of or  consultants  or advisors to the Company.  A total of 1,955,625  shares of
Common Stock is authorized for issuance under the 1995 Plan.

     At February 28,  1998,  options  covering an aggregate of 109,816 shares of
the Company's  Common Stock had been  exercised  under the 1995 Plan,  1,520,911
shares were  outstanding,  and 324,898 shares (plus any shares that might in the
future be returned to the plan as a result of  cancellations  or  expiration  of
options)  remained  available  for future grant under the 1995 Plan.  During the
year ended  December 31,  1997,  under the 1995 Plan, the Company granted to all
current  executive  officers as a group options to purchase 420,000 shares at an
exercise prices ranging from $2.56 to $2.9375 per share and to all employees and
consultants  (excluding  current  executive  officers)  as a  group  options  to
purchase  904,000  shares at exercise  prices  ranging  from $2.00 to $4.125 per
share.

     The  1995  Plan  is   administered  by  the  Board  of  Directors  and  the
Compensation  Committee. No vesting is required under the 1995 Plan, although it
may be imposed by the Board of  Directors.  The maximum  term of a stock  option
under the 1995 Plan is 10 years,  but if the  optionee  at the time of grant has
voting power over more than 10% of the Company's  outstanding capital stock, the
maximum term of an incentive  stock option is five years.  The exercise price of
stock  options  granted  under  the  1995  Plan is  determined  by the  Board of
Directors.  Options granted under the 1995 Plan are generally  non-transferable.
The exercise price may be paid in cash or any other form of  consideration  that
may be acceptable to the Board of Directors.

     Options   generally   terminate  three  months  after  termination  of  the
optionee's  employment or  relationship  as a consultant or director unless such
termination is caused by the permanent disability or death of the optionee.  The
1995 Plan may be amended at any time by the Board of Directors, although certain
amendments would require stockholder  approval.  The 1995 Plan will terminate in
April 2005, unless earlier terminated by the Board of Directors.

     The  following  tables show for the fiscal year ended  December  31,  1997,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers:

                                       3
<PAGE>
<TABLE>
<CAPTION>

                        Option Grants in Last Fiscal Year

                       Individual Grants (4)                                 Potential Realizable                     
                                                                               Value at Assumed                                   
                        Number of    % of Total                                 Annual Rates of
                       Securities      Options                                   Stock Price
                       Underlying    Granted to    Exercise or                 Appreciation for
                         Option     Employees in   Base Price   Expiration    Option Term ($)(3)
Name                   Granted (#) Fiscal Year(1)   ($/Sh)(2)      Date      5% ($)      10% ($)                       
----                   ----------- --------------   ---------      ----      ------      -------                       
<S>                     <C>            <C>           <C>         <C>       <C>          <C>    
Andrew M. Thompson       80,000         6.04%        $2.9375     03/02/07  147,790      374,530
George M. Savage, M.D.   80,000         6.04%        $2.9375     03/02/07  147,790      374,530
Edward W. Unkart         75,000         5.66%        $2.9375     03/02/07  138,553      351,122
Jeffrey J. Christian     75,000         5.66%        $2.9375     03/02/07  138,553      351,122
Marshall Tsuruda         60,000         4.53%        $2.9375     03/02/07  110,843      280,897
                         50,000(5)      3.78%        $2.5675     03/26/06   75,487      196,093

</TABLE>

(1)  Based on an aggregate  of 1,324,000  options,  including  384,750  repriced
     options,  granted to employees and directors of the Company in fiscal 1997,
     including  the  Named   Executive   Officers  set  forth  in  the  "Summary
     Compensation Table" above and directors.

(2)  The exercise  price is equal to the closing price as reported on the Nasdaq
     National Market on the last market trading day preceding the date of grant.

(3)  The  potential  realizable  value  is  calculated  based on the term of the
     option at the time of grant (ten years or nine years in the case of options
     repriced on March 11, 1997).  Stock price  appreciation of five percent and
     ten percent is assumed pursuant to rules  promulgated by the Commission and
     does not represent the Company's prediction of its stock price performance.
     The potential  realizable value at 5% and 10% appreciation is calculated by
     assuming that the exercise price  appreciates at the indicated rate for the
     entire term of the option and that the option is  exercised at the exercise
     price and sold on the last day of its term at the appreciated price.

(4)  Each of the options listed in the table was granted under the 1995 Plan and
     was immediately exercisable.  The shares purchasable thereunder are subject
     to repurchase by the Company at the original  exercise price paid per share
     upon the  optionee's  cessation of service prior to vesting in such shares.
     The  repurchase  right lapses and the optionee  vests in the shares subject
     to, or issued  upon  exercise  of, the options as to 1/8th of the shares on
     the  sixth  month   anniversary  of  the  date  of  grant  and  in  monthly
     installments thereafter for 42 months.

(5)  Option repriced on March 11, 1997.

                                       4
<PAGE>
<TABLE>
<CAPTION>

  Aggregated Option Exercises in Fiscal 1997, and Fiscal Year-End Option Values

                                             Number of Securities
                                                 Underlying 
                                                Unexercised        Value of Unexercised
                                                 Options at            In-the-Money
                         Shares               December 31, 1997         Options at   
                        Acquired     Value           (#)           December 31, 1997 ($)
                       On Exercise  Realized     Exercisable/           Exercisable/       
Name                       (#)        ($)       Unexercisable         Unexercisable(1)      
----                       ---        ---       -------------         ----------------      
<S>                        <C>        <C>      <C>                     <C>  
Andrew M. Thompson         ---        ---      18,333/61,667                $0/$0
George M. Savage, M.D.     ---        ---      18,333/61,667                $0/$0
Edward W. Unkart           ---        ---      17,187/57,813                $0/$0
Jeffrey J. Christian       ---        ---      22,187/57,813            $9,453/$0
Marshall Tsuruda           ---        ---      34,583/75,417               $0/$0
</TABLE>
        

(1)  Based on the closing price as reported on the Nasdaq  National Market as of
     December 31,  1997 ($2.5625),  minus the exercise price,  multiplied by the
     number of shares underlying the option.

Employee Stock Purchase Plan

     In January 1996, the Company  adopted the Employee Stock Purchase Plan (the
"Purchase  Plan")  covering an aggregate of 150,000 shares of Common Stock.  The
Purchase Plan is intended to qualify as an employee  stock  purchase plan within
the meaning of Section 423 of the Code.  Under the Purchase  Plan,  the Board of
Directors may authorize participation by eligible employees, including officers,
in periodic offerings  following the adoption of the Purchase Plan. The offering
period for any offering will be no more than 27 months.

     Employees  are  generally  not  eligible  to  participate  unless  they are
employed by the Company or an affiliate of the Company for at least 20 hours per
week and are employed by the Company or a subsidiary  of the Company  designated
by the  Board  for at  least  five  months  per  calendar  year.  Employees  who
participate  in an offering  can have up to 15% of their  earnings  withheld and
applied to the  purchase of Common Stock on specified  dates  determined  by the
Board of Directors.  The price of Common Stock purchased under the Purchase Plan
will be equal to 85% of the lower of the fair market  value of the Common  Stock
on the commencement  date of each offering period or the relevant purchase date.
Employees  may end their  participation  in the  offering at any time during the
offering  period,   and  participation  ends  automatically  on  termination  of
employment with the Company.

     In the  event of a  merger,  dissolution,  consolidation,  certain  reverse
mergers  or certain  acquisitions,  the Board of  Directors  has  discretion  to
provide  that  each  right  to  purchase  Common  Stock  will be  assumed  or an
equivalent  right  substituted  by the successor  corporation,  or the Board may
shorten  the  offering  period and  provide  for all sums  collected  by payroll
deductions  to  be  applied  to  purchase  stock   immediately   prior  to  such
transaction. The Purchase Plan will terminate at the Board's discretion, subject
to the  limitation  that no such  action may  adversely  affect any  outstanding
rights to purchase Common Stock.

                                       5
<PAGE>

401(k) Plan

     In December 1995, the Company adopted an employee savings plan (the "401(k)
Plan") covering the Company's  employees who have not elected out of 401(k) Plan
participation.  Pursuant to the 401(k)  Plan,  eligible  employees  may elect to
reduce  their  current  compensation  by up to the lesser of 20% of their annual
compensation  or the  statutorily  prescribed  annual limit ($9,500 in 1997) and
have the amount of such  reduction  contributed to the 401(k) Plan. In addition,
eligible  employees may make roll-over  contributions  to the 401(k) Plan from a
tax-qualified  retirement  plan.  The 401(k) Plan is  intended to qualify  under
Section 401 of the Code so that  contributions by employees or by the Company to
the 401(k) Plan,  and income  earned on the 401(k) Plan  contributions,  are not
taxable  to  employees  until  withdrawn  from  the  401(k)  Plan,  and so  that
contributions  by the Company,  if any,  will be  deductible by the Company when
made.  The trustee under the 401(k) Plan, at the direction of each  participant,
invests  the 401(k)  Plan  employee  salary  deferrals  in  selected  investment
options.


Compensation of Directors

     Directors do not currently  receive any cash  compensation from the Company
for their  service  as  members  of the Board of  Directors,  although  they are
eligible  for  reimbursement  for their  expenses  incurred in  connection  with
attendance at Board and Committee meetings in accordance with Company policy.

     Each non-employee director of the Company also receives stock option grants
under the 1996  Non-Employee  Directors'  Stock  Option  Plan  (the  "Directors'
Plan").  Only  non-employee  directors  of the Company  are  eligible to receive
options under the Directors' Plan. Options granted under the Directors' Plan are
intended by the  Company not to qualify as  incentive  stock  options  under the
Code.

     Option grants under the Directors' Plan are non-discretionary.  Pursuant to
the terms of the Directors' Plan, each non-employee  director who was serving on
the date of the Company's  initial  public  offering was granted on such date an
option to purchase 20,000 shares of Common Stock. In addition, each non-employee
director  subsequently elected to the Board will automatically be granted on the
date of his or her election to the Board an option to purchase  20,000 shares of
Common Stock (the  "Initial  Grant").  On the one year  anniversary  date of the
Company's  initial public  offering,  or the anniversary  date of a non-employee
directors' election to the Board, if such non-employee  director was not serving
in such capacity as of the date of the Company's  initial public  offering,  and
each one-year  anniversary  thereafter,  each member of the  Company's  Board of
Directors who is not an employee of the Company and has served as a non-employee
director for at least the full six month period prior, is automatically  granted
an option to purchase  5,000  shares of Common Stock of the Company (the "Annual
Grant").  No other options may be granted at any time under the Directors' Plan.
The exercise price of options  granted under the Directors'  Plan is 100% of the
fair market value of the Common  Stock  subject to the option on the date of the
option grant. The Initial Grant under the Directors' Plan will generally vest at
the rate of 1/48th of the shares  monthly.  Annual  Grants under the  Directors'
Plan will vest entirely on, but not before,  the first annual anniversary of the
Annual  Grant.  The term of options  granted  under the  Directors'  Plan is ten
years.  In the event of a merger,  dissolution,  consolidation,  certain reverse
mergers or certain  acquisitions,  options outstanding under the Directors' Plan
will automatically become fully vested and will terminate if not exercised prior
to the consummation of the transaction.

     At  February 28,  1998,  there were 200,000 shares of the Company's  Common
Stock authorized for issuance under the Directors' Plan.  During the last fiscal
year, the Company granted options  covering an aggregate of 25,000 shares to the
non-employee  directors of the Company,  at exercise prices ranging from $2.6875
to $3.00 per share.  The fair market  value of such Common  Stock on the date of
grants was $2.6875 and $3.00 per share  (based on the closing  price as reported
on the Nasdaq  National  Market for the day preceding the date of grant).  As of
February 28, 1998, no options had been exercised under the Directors' Plan.

                                       6
<PAGE>


         REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
                          ON EXECUTIVE COMPENSATION(1)

The Compensation  Committee of the Board of Directors  ("Committee") is composed
of Messrs. McLane and Young, none of whom are currently officers or employees of
the Company.  The  Committee  is  responsible  for  establishing  the  Company's
compensation  programs for all employees,  including  executives.  For executive
officers,  the  Committee  evaluates  performance  and  determines  compensation
policies and levels.

Compensation Philosophy

     The  goals  of the  compensation  program  are to align  compensation  with
business objectives and performance and to enable the Company to attract, retain
and reward  executive  officers and other key  employees  who  contribute to the
long-term  success of the  Company  and to  motivate  them to enhance  long-term
stockholder value. Key elements of this philosophy are:

     The Company pays  competitively  with leading medical device companies with
     which the Company  competes for talent.  To ensure that pay is competitive,
     the Company  regularly  compares its pay practices with these companies and
     sets it pay parameters based on this review.

     The Company maintains the FemRx Annual Bonus Plan to provide  motivation to
     achieve  specific  operating goals and to generate rewards that bring total
     compensation to competitive levels.

     The Company provides significant equity-based incentives for executives and
     other key employees to ensure that they are motivated over the long-term to
     respond to the Company's  business  challenges and  opportunities as owners
     and not just as employees.

     Base Salary. The Committee  annually reviews each executive  officer's base
salary.  When reviewing base salaries,  the Committee  considers  individual and
corporate performance,  levels of responsibility,  prior experience,  breadth of
knowledge and competitive pay practices.

     Annual  Incentive.  The FemRx Annual Bonus Plan, an annual  incentive award
plan, is the variable pay program for officers and other senior  managers of the
Company to earn  additional  annual  compensation.  The actual  incentive  award
earned  depends  on the  extent  to which  Company  and  individual  performance
objectives  are achieved.  At the start of each year, the Committee and the full
Board of Directors review and approve the annual performance  objectives for the
Company and individual  officers.  The Company  objectives consist of operating,
strategic  and  financial  goals  that  are  considered  to be  critical  to the
Company's fundamental long-term goal building stockholder value.

     After the end of the year, the Committee  evaluates the degree to which the
Company has met its goals and establishes a total incentive award pool under the
FemRx Annual Bonus Plan.  Individual  awards are  determined by evaluating  each
participant's  performance  against  objectives  and allocating a portion of the
award pool based on the participant's  contributions during the year. Awards are
paid  in  cash  and  distributions  are  made  in  the   February following  the
performance year.

     Long-Term Incentives. The Company's long-term incentive program consists of
the 1995 Plan and the Purchase Plan. The option program utilizes vesting periods
(generally  four years) to encourage  key employees to continue in the employ of
the Company.  Through  option  grants,  executives  receive  significant  equity
incentives to build long-term stockholder value. Grants are made at 100% of fair
market value on the date of grant.  Executives  receive  value from these grants
only if the Company's Common Stock  appreciates over the long-term.  The size of
option grants is determined based on competitive  practices at leading companies
in the medical  device  industry and the Company's  philosophy of  significantly
linking executive  compensation with stockholder  interests.  In March 1997, the
Board granted options to purchase an aggregate of 370,000 shares of Common Stock
of the Company to the Named Executive  Officers at an exercise price of $2.9375,
the fair market value of the Common Stock on the date of grant.

                                       7
<PAGE>


     The Company  established  the Purchase Plan both to encourage  employees to
continue  in  the  employ  of the  Company  and to  motivate  employees  through
ownership interest in the Company. Under the Purchase Plan, employees, including
officers,  may have up to 15% of their earnings withheld for purchases of Common
Stock on  certain  dates  specified  by the  Board.  The price of  Common  Stock
purchased  will not be less than the  lesser  of an  amount  equal to 85% of the
lower of the fair market value of the Common Stock on the  commencement  date of
the offering or the relevant purchase date.

Corporate Performance and Chief Executive Officer Compensation

     Mr. Thompson's  base salary  during 1997 as President  and Chief  Executive
Officer was $175,000.  Following the Committee's  review of compensation paid by
leading medical device companies,  the Committee set Mr. Thompson's  base annual
salary  through  1998 at  $175,000.  This  amount,  in  addition  to the  annual
incentive  provided by the FemRx Annual Bonus Plan,  was estimated to provide an
annual cash compensation level at the average as compared to a selected group of
leading  medical device  companies.  In setting this amount,  the Committee took
into  account  (i) its  belief that  Mr. Thompson  is one of the CEOs of leading
medical device  companies who has significant and broad-based  experience in the
medical device industry,  (ii) the scope of Mr. Thompson's  responsibility,  and
(iii) the  Board's  confidence in Mr. Thompson  to lead the Company's  continued
development.

Federal Tax Consideration

     Section  162(m) of the Code limits the  Company to a deduction  for federal
income tax purposes of no more than $1 million of  compensation  paid to certain
Named Executive Officers in a taxable year. Compensation above $1 million may be
deducted  if it is  "performance-based  compensation"  within the meaning of the
Code.

     The 500,000  shares per person  limitation  in the 1995 Plan is intended to
comply with the  provisions  of  Section 162(m)  of the Code.  The  Compensation
Committee  intends to continue  to  evaluate  the effects of the statute and the
Treasury regulations and to comply with Code Section 162(m) in the future to the
extent consistent with the best interests of the Company.

Option Repricing Information

     On March 3, 1997, the Compensation Committee approved an offer to employees
of the Company to reprice  outstanding  options granted between January 30, 1996
and December 17, 1996 (the "Repricing Program"). Under the Repricing Program, as
of March 11, 1997,  384,750 options were converted into repriced options with an
exercise  price of $2.5625 (based on the closing price as reported on the Nasdaq
National  Market on the last market trading day preceding the day of grant).  As
consideration for the grant of repriced options,  optionees were prohibited from
exercising  the repriced  options for a period of six months after the date such
repriced options were granted.

     The  following  table  sets  forth,  as to all  executive  officers  of the
Company,  certain information  concerning the repricing of all officers' options
since the Company's inception.
<TABLE>
<CAPTION>

                           Option Repricing Since Inception

                                                                         Length of
                             Number of    Market                          Original 
                            Securities   Price of   Exercise             Option Term 
                            Underlying   Stock at   Price at     New    Remaining at
                              Options    Time of    Time of    Exercise   Date of  
      Name          Date     Repriced   Repricing   Repricing   Price    Repricing
      ----          ----     --------   ---------   ---------   -----    ---------
<S>               <C>         <C>        <C>         <C>        <C>      <C>
Marshall Tsuruda  03/11/97    50,000     $2.5625      $9.00     $2.5625   9 years
</TABLE>


                                       8
<PAGE>


                                   CONCLUSION

     Through the plans described  above, a significant  portion of the Company's
compensation  program and Mr. Thompson's  compensation are contingent on Company
performance,  and  realization  of benefits is closely  linked to  increases  in
long-term stockholder value. The Company remains committed to this philosophy of
pay for  performance,  recognizing  that the  competitive  market  for  talented
executives  and the  volatility of the  Company's  business may result in highly
variable compensation for a particular time period.

                             COMPENSATION COMMITTEE

                                 James W. McLane
                                 Philip M. Young



Compensation Committee Interlocks and Insider Participation

     As stated above, the Compensation Committee consists of Messrs.  McLane and
Young. The Compensation Committee makes recommendations  concerning salaries and
incentive compensation,  awards stock options to employees and consultants under
the Company's stock option plans and otherwise  determines  compensation  levels
and  performs  such  other  functions  regarding  compensation  as the Board may
delegate.

(1)  Notwithstanding  anything to the contrary set forth in any of the Company's
     previous  filings  under the  Securities  Act of 1933,  as amended,  or the
     Securities Exchange Act of 1934, as amended,  that might incorporate future
     filings,  including  this form 10-K/A,  in whole or in part,  the following
     report and  Performance  Graph shall not be  incorporated by reference into
     any  such  filings.   The   Committee's   objective  is  to  set  executive
     compensation  at the market  average when compared to leading  companies in
     the  medical  device   industry.   The  primary   components  of  executive
     compensation  are base  salary,  annual  incentives  and  long-term  equity
     incentives.


                                       9
<PAGE>



Performance Measurement Comparison(1)

The following graph shows the total stockholder  return of an investment of $100
in cash on March 27,  1996 for (i) the  Company's Common Stock,  (ii) the Nasdaq
Stock Market (U.S.) Index and (iii) the  Standard &  Poor's Health Care (Medical
Products and Supplies) Index. All values assume  reinvestment of the full amount
of all dividends and are calculated as of the end of each month:

               COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT

           EDGAR Representation of Data Points used in Printed Graphic

                                                              S&P Health Care
                                             Nasdaq Stock   (Medical Products
                         FemRx, Inc.          Market - US       and Supplies)

         3/27/96                $100                 $100                $100
            3/96                 108                  100                  99
            6/96                 120                  109                  98
            9/96                  92                  112                 109
           12/96                  50                  118                 110
            3/97                  30                  112                 109
            6/97                  42                  132                 130
            9/97                  29                  154                 135
           12/97                  28                  145                 137




___________

(1) This Section is not  "soliciting  material," is not deemed  "filed" with the
SEC and is not to be  incorporated  by  reference  in any filing of the  Company
under the Securities Act of 1933, as amended,  or the Securities Exchange Act of
1934, as amended  whether made before or after the date hereof and  irrespective
of any general incorporation language in any such filing.


                                       10
<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth certain information  regarding the ownership
of the Company's Common Stock as of February 28,  1998 by: (i) each director and
nominee for director;  (ii) each of the executive  officers named in the Summary
Compensation  Table  employed  by the Company in that  capacity on  February 28,
1998;  (iii) all executive officers and directors of the Company as a group; and
(iv) all  those known by the Company to be  beneficial  owners of more than five
percent of its Common Stock.
<TABLE>
<CAPTION>

                                                    Beneficial Ownership(1)
                                                 ------------------------------

                                                    Number of   Percent of 
  Beneficial Owner                                    Shares      Total 
  ----------------                                    ------      ----- 
<S>                                                 <C>           <C>                                                       
  Sprout Group (2) ..............................   2,222,184      25.03%
  3000 Sand Hill Road
  Building 3, Suite 170
  Menlo Park, CA 94025
  U.S. Venture Partners (3) .....................   1,093,748      12.37%
  2180 Sand Hill Road, Suite 300
  Menlo Park, CA 94025
  Andrew M. Thompson (4) ........................     483,128      5.45%
  George M. Savage, M.D. (5) ....................     483,128      5.45%
  Arnold J. Kresch, M.D. (6) ....................     461,001      5.21%
  Gail Gaumer Schulze (7) .......................      31,040        *
  Kathleen D. LaPorte (8) .......................   2,222,184      25.03%
  James W. McLane (9) ...........................      22,083        *
  Philip M. Young (10) ..........................   1,124,788      12.67%
  Jeffrey J. Christian (11) .....................     199,008      2.24%
  Edward W. Unkart (12) .........................     108,819      1.23%
  Marshall Tsuruda (13)..........................      53,863        *
  All executive officers and directors as 
  a group (12 persons)(14) ......................   4,469,469      52.19%
</TABLE>

  *  Less than one percent.

(1)  This table is based upon  information  supplied by officers,  directors and
     principal  stockholders and Schedules 13D and 13G filed with the Securities
     and Exchange Commission (the  "Commission").  Unless otherwise indicated in
     the  footnotes to this table and subject to community  property  laws where
     applicable,  the Company  believes that each of the  stockholders  named in
     this table has sole voting and investment  power with respect to the shares
     indicated  as  beneficially  owned.  Applicable  percentages  are  based on
     8,844,464 shares outstanding on February 28,  1998, adjusted as required by
     rules promulgated by the Commission.

(2)  Represents  1,359,618  shares held by Sprout  Capital VII,  L.P.  ("SVII"),
     714,700 shares held by Sprout  Capital VI, L.P.  ("SVI") and 113,181 shares
     held by DLJ  Capital  Corporation  ("DLJ").  Also  includes  34,685  shares
     issuable pursuant to option exercisable within 60 days of February 28, 1997
     by  DLJ.  DLJ is the  Managing  General  Partner  of  both  SVI  and  SVII.
     Ms. LaPorte,  a  director  of the  Company,  is a  general  partner  of DLJ
     Associates VI, L.P. and DLJ Associates  VII, L.P., the general  partners of
     SVI and SVII,  respectively.  Ms. LaPorte disclaims beneficial ownership of
     the shares  held by such  entities,  except to the extent of her  pecuniary
     interest  therein.  Ms. LaPorte  may  be  deemed  to  exercise  voting  and
     investment power over the shares held by affiliates of Sprout Group.

                                       11
<PAGE>

(3)  Represents  946,093 shares held by U.S.  Venture  Partners IV, L.P.  ("USVP
     IV"),  114,843  shares held by Second  Ventures  II, L.P.  ("SVLP II")  and
     32,812  shares held by USVP  Entrepreneur  Partners II, L.P.  ("USVEP II").
     Mr. Young,  a director  of the  Company,  is a general  partner of Presidio
     Management  Group IV, L.P., the general partner of each of USVP IV, SVLP II
     and USVEP II. Mr. Young disclaims  beneficial  ownership of the shares held
     by such entities,  except to the extent of his pecuniary  interest therein.
     Mr. Young may be deemed to exercise  voting and  investment  power over the
     shares held by affiliates of U.S. Venture Partners.

(4)  Represents  448,128  shares held by The  Thompson  Family  Trust,  of which
     Mr. Thompson  and  his  wife  are  trustees,  and  10,000  shares  held  by
     Savage-Thompson  Management,  of  which  Mr. Thompson  is a  partner.  Also
     includes 25,000 shares issuable pursuant to options  exercisable  within 60
     days of February 28, 1998.

(5)  Represents 448,128 shares held by The George and Nancy Savage Living Trust,
     of which  Dr. Savage  and his wife are trustees,  and 10,000 shares held by
     Savage-Thompson Management, of which Dr. Savage is a partner. Also includes
     25,000 shares issuable  pursuant to options  exercisable  within 60 days of
     February 28, 1998.

(6)  Represents  451,626  shares  held by Kresch  Medical  Research,  LLC.  Also
     includes 9,375 shares issuable  pursuant to options  exercisable  within 60
     days of  February 28,  1998 by  Dr. Kresch.  Dr. Kresch is an owner and the
     sole manager of Kresch Medical Research,  LLC and may be deemed to exercise
     voting and investment power over the shares held by such entity.

(7)  Represents 31,040 shares issuable pursuant to options exercisable within 60
     days of February 28, 1998.

(8)  Includes  2,187,499  shares held by entities  affiliated with Sprout Group.
     Also includes 34,685 shares issuable pursuant to options exercisable within
     60  days  of  February 28,  1998 to DLJ.  Ms. LaPorte,  a  director  of the
     Company,  disclaims  beneficial  ownership  of  the  shares  held  by  such
     entities, except to the extent of her pecuniary interest therein.

(9)  Includes 17,083 shares issuable pursuant to options  exercisable  within 60
     days of February 28, 1998.

(10) Includes  1,093,748  shares held by entities  affiliated with U.S.  Venture
     Partners.  Mr. Young,  a  director  of the  Company,  disclaims  beneficial
     ownership of the shares held by such entities,  except to the extent of his
     pecuniary  interest therein.  Also includes 31,040 shares issuable pursuant
     to options exercisable within 60 days of February 28, 1998.

(11) Includes  1,721 shares held by Mr.  Christian's  son. Also includes  28,437
     shares  issuable  pursuant  to  options   exercisable  within  60  days  of
     February 28, 1998.

(12) Includes  78,125  shares  held by  Takei  Unkart  Family  Trust,  of  which
     Mr. Unkart and his wife are trustees.  Also includes 23,437 shares issuable
     pursuant to options exercisable within 60 days of February 28, 1998.

(13) Includes 43,750 shares issuable pursuant to options  exercisable  within 60
     days of February 28, 1998.

(14) Includes 306,450 shares issuable pursuant to options  exercisable within 60
     days of February 28, 1998 by the officers and directors as a group.

                                       12
<PAGE>

Item 13. Certain Relationships and Related Transactions

     The Company has entered into indemnity agreements with certain officers and
directors  which  provide,  among other things,  that the Company will indemnify
such officer or director, under the circumstances and to the extent provided for
therein,  for expenses,  damages,  judgments,  fines and  settlements  he may be
required to pay in actions or proceedings  which he is or may be made a party by
reason of his position as a director, officer or other agent of the Company, and
otherwise to the full extent  permitted  under  Delaware  law and the  Company's
By-laws.

                                       13
<PAGE>