An intravascular balloon catheter device includes an outer member disposed about an inner member. A balloon has a proximal portion which is connected to the outer member and a distal portion which is connected to the inner member. A sheath is disposed about the outer member and adapted for movement relative to the balloon. A coating with a therapeutic agent is provided on at least the distal portion of the balloon. The distal portion fits snugly into the sheath so as to provide a substantially watertight engagement therebetween when inside the sheath. The sheath is configured to prevent the proximal portion of the balloon from inflating to a diameter larger than the sheath.
