Small heart-device developer Xtent Inc. (XTNT) is calling it quits after striking out in efforts to find a strategic or financial deal that would bring in needed resources to market and research its heart stents.

The Menlo Park, Calif., company announced late Friday that its board of directors has approved a plan to liquidate the company. The plan will require approval from stock holders who may only receive cents on the dollar for shares they currently have.

"On May 11, 2009, the Company's board of directors concluded that it appeared unlikely that a strategic transaction at a valuation materially in excess of the estimated liquidation value would be achieved in the near term," Xtent said in a filing with the Securities and Exchange Commission.

In a separate filing, the company said it currently estimates it will ultimately distribute between 11 cents and 40 cents per share of common stock by dissolving the company, which compares with its closing price Friday at $1 per share. Shareholder payouts could improve if Xtent lands good deals to sell off its intellectual property.

The company's stock has improved modestly after bottoming out around the end of last year, although it remains far off the $16 initial public offering price from early 2007.

Buyout group Morgenthaler Partners is Xtent's largest shareholder by a long shot with nearly 22% of outstanding shares, according to data compiled by FactSet Research. Investment firms Advanced Technology Ventures and Latterell Venture Partners are also big holders.

Xtent developed a novel stent device, used to prop open clogged heart arteries, which can be cut to size while inside arteries and can also be deployed in multiple places from one delivery tool. It differs from anything big stent makers such as Boston Scientific Corp. (BSX) and Abbott Laboratories (ABT) have, and Xtent finally gained European clearance in March to sell the device.

But the company had long said it would need additional cash to actually produce and market the stent, and this was ultimately its undoing as the credit crisis made financing very difficult to find. It also appears the technology hasn't captured the interest of stent heavyweights that could easily snap up Xtent in a relatively small deal.

Xtent also required cash to research the "Custom NX" stent for the U.S. market.

The company's recent travails aren't unique among the ranks of smaller medical companies that are burning cash to develop products and often represent high-risk, high-reward investment propositions. On Thursday, shareholders of Northstar Neuroscience Inc. (NSTR), which was tripped by the failure of a major study for brain-stimulation technology, voted to dissolve the company.

In Xtent's case, the company had an approved device in recent weeks and it was exploring several different strategic alternatives with the help of Piper Jaffray. Chief Executive Gregory Casciaro expressed confidence in recent interviews that winning European regulatory approval improved Xtent's outlook.

In late March, for example, he said the company had been "flooded with interest" since getting European approval. But the company at the same time laid off nearly all of its 121 workers because it couldn't afford to burn too much cash without knowing what lay ahead.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com