Vol. 2, No. 5Published twice monthly by Innovation In Medtech, llc

WWW.MEDTECHSTRATEGIST.COM

MARKET TRACK

MARCH 13, 2015

New Funding ModelsSurgical Frontiers Focuses “Targeted Crowdfunding” on

Musculoskeletal MarketMary Thompson, 38

Conference Preview DUBLIN 2015: A Showcase for Early-Stage Biomedical Innovation

Wendy Diller, 30

Under the LensStimwave Advances Electroceuticals Market

with Injectable Device Mary Stuart, 24

Medtech Investing TheraNova:

Using Creative Financing to Drive an Incubator

Stephen Levin, 16

Industry SpotlightMaterialise NV:

Will 3-D Printing Disrupt Medtech?

David Cassak, 6

Global Trauma Market, 2012-2015E ($M)

See page 39

Start-Ups To Watch

Cardionomic: Targeting the Root of Acute Heart Failure

Mary Stuart, 40

3-D Printing and the Revolution in Medicine

Source: Matthew Taylor, Barclays Equity Research, US Medical Supplies & Devices Industry Update, January 2015

Global Trauma Market, 2012-2015E ($M)Figure 3

2012

$6,007$6,290

$6,613$6,906

2013 2014E 2015E

2012 2013 2014E 2015E

$6,007$6,290

$6,613$6,906

12

we’re back!After a short hiatus, the team that brought you the best global medtech coverage in publications like IN VIVO, START-UP and MEDTECH INSIGHT, and the IN3 investor conferences, has reunited to form a new information provider, Innovation In Medtech, focused exclusively on the under-served and rapidly changing medtech market.

David Cassak Editor-in-Chief

Stephen LevinEditor-in-Chief

THE MEDTECH STRATEGIST

will bring together in one publication

a level of device industry coverage

broader and deeper than any

other source.

Warmest regards,

As we look back on the 40-plus years we’ve spent covering this industry, the transformation has truly been dramatic on all fronts. We are seeing technology advances that people barely imagined, benefitting more patients than ever throughout the world as medtech indeed has become a global industry. With those advances have come increased challenges, be it the changing financing landscape that impacts early-stage compa-nies seeking funding, or the shifting healthcare economic climate that is altering the model of who decides which products to buy and what they will pay for them. This rapid evolution makes it more critical than ever that our industry have a go-to source for reliable, in-depth news and analysis to help decision-makers understand today’s device space, and prepare for tomorrow. That is our goal: to provide superior content backed by unparal-leled industry experience.

Our flagship product is a new bi-weekly publication, THE MEDTECH STRATEGIST (MTS), that will provide broad cover-age of the most important topics and trends in medical devices today, filling a void created by recent changes in the information landscape. Brought to you by the most experienced editorial team in the business – with more than 100 years of collective experience covering the industry – MTS will feature interviews with industry leaders, stories on leading companies, profiles of ground-breaking start-ups and analyses of dynamic clinical

markets and technology trends, all in an effort to not just explain what is going on in the device space today, but why these events are occurring and what they may lead to in the future on a worldwide scale.

You can look forward to a publication covering global medtech innovation in all of its various forms: clinical, techno-logical, business model, marketplace, and financing innovation. Our new pub-lication will offer a combination of the in-depth feature articles for which we are known, along with shorter industry pieces, profiles of emerging companies and overviews of critical clinical markets, providing insight and analysis currently missing in the medtech industry. And we look forward to hearing from you about the topics and issues you’d like to see covered. THE MEDTECH STRATEGIST will offer the best of the kind of writing we used to do for IN VIVO, START-UP, and MEDTECH INSIGHT, in a single, robust publication dedicated exclusively to the medical device industry.

Through THE MEDTECH STRATEGIST and upcoming conferences, we look forward to re-connecting with our many friends in the industry, while also introducing ourselves to a new group of readers by continuing to deliver the superior level of coverage and analysis that the medtech industry needs and deserves.

It’s good to be back.

Contact us for subscription information:Kristy J. Kennedy | 480-985-9512 | k.kennedy@medtechinno.com

Managing Partners

David Cassak Stephen Levin

THE MEDTECH STRATEGIST © 2015 Innovation In Medtech, LLC. All rights reserved.

40 START-UPS TO WATCH

A neuromodulation device inserted in the pulmonary artery has the potential to increase heart contractility without the negative effects of inotropic drugs.

Forest Lake MINNESOTA

contactSteve Goedeke President & CEO

sgoedeke@ cardionomicinc.com

who’s behind itNew Enterprise Associates, the Cleveland Clinic, and Greatbatch Inc.

year founded2011

unmet clinical needAcute Decompensated Heart Failure still has high rates of hospitalization, morbidity, and mortality

solutionA neuromodulation platform that increases heart contractility

funding to date$2.35 million

investorsNEA, Greatbatch Inc., and the Cleveland Clinic

board of directorsAli Behbahani, MD (NEA); Jon Heavey, MD (Cleveland Clinic Innovations); Karen Shanahan (Cleveland Clinic); Dan Kaiser, PhD (Greatbatch Inc.); Steve Goedeke

medical advisoryboardWilliam T. Abraham, MD (Ohio State University), Michael Bristow, MD, PhD (University of Colorado Cardiovascular Institute); Michael Felker, MD (Duke University); Gary Francis, MD (University of Minnesota Medical School); Brian Olshansky, MD (Professor Emeritus, University of Iowa Carver College of Medicine)

For more than one million patients hospitalized with acute decompensated heart failure (ADHF) the prognosis is bleak. Only one in three patients hospitalized with heart failure survives for five years or more. These patients experience rapid weight gain due to fluid buildup in the lungs and throughout the body, which makes it difficult for them to breathe and sleep. Once hospitalized, it’s likely they’ll soon return to the hospital with the same symptoms. Half of them return within six months and 24% within the first month. Because

US hospitals are now financially penalized for ex-cess 30-day readmissions in heart failure patients who are on Medicare, developing technologies to keep these patients out of the hospital has be-come a top priority.

According to heart failure expert William T. Abraham, MD, “In more than three decades, we have seen little improvement in the outcomes of ADHF patients.” Abraham, Professor of Internal Medicine and Chief of the Division of Cardiovas-cular Medicine at Ohio State University College of Medicine, has participated in more than 100 multicenter clinical drug and device trials focused on heart failure and cardiac transplantation. “This is one area of cardiology in which we have made little progress,” he says. “A new approach

is needed, one that targets the primary cause of worsening heart failure, namely, decreased car-diac contractility.”

That’s the goal of start-up Cardionomic Inc., where Abraham serves as chief medical officer. Cardionomic is developing a neuromodulation therapy designed to increase heart contractility and “rebalance hemodynamics and restore renal function, thereby treating both the root cause and the symptoms of acute heart failure,” says

Abraham.

Cardionomic was founded around tech-nology licensed from the Cleveland Clinic to Denali Medical II, an incubator backed by the venture capital firm New Enter-prise Associates (NEA). The company’s core patents have issued, and funding of $2.35 million has been provided by NEA, the Cleveland Clinic, and Greatbatch Inc., a manufacturer of products for cardiac rhythm management and neuromodula-

tion. Steven Goedeke, the president and CEO of Denali II and a long-time veteran of Medtronic Inc., leads Cardionomic.

Goedeke explains that patients with ADHF currently have three medical therapy options, all with limitations. Intravenous diuretics relieve the symptoms of fluid overload but are associ-ated with worsening renal function and worse outcomes. Vasodilators also provide symptom-atic relief. They improve cardiac output by di-lating blood vessels but can cause dangerous drops in blood pressure. Finally, a class of drugs known as inotropes does get at the root cause of ADHF by increasing contractility. However, these drugs can cause vasoconstriction or vaso-dilation and are known to stimulate tachycardia

Cardionomic: Targeting the Root of Acute Heart Failure

by MARY STUART

“A new approach is needed, one that targets the primary cause of worsening heart failure, namely, decreased cardiac contractility.”

–William Abraham, MD

MARCH 13, 2015

41START-UPS TO WATCH

and atrial fibrillation. As a result, ino-tropes are associated with high rates of in-hospital mortality.

Cardionomic believes it has found a way to increase contractility with a device therapy that avoids the harm-ful systemic effects of inotropes. Goedeke explains that the company is developing an acute neuromodulation therapy that stimulates, from within the pulmonary artery, nerve branches associated with the autonomic ner-vous system. The concept is to de-liver the acute therapy for a few days while a patient is in the hospital, and by doing so, “calm the neurohormonal storm that leads to ADHF, and improve end-organ perfusion and thus patient outcomes.”

The Cardionomic therapy aims to selectively stimulate nerve branches that head into the ventricle where they are specifically responsible for contractility. “We have a local, nonsys-temic, controllable ability to drive con-tractility without the negatives associ-ated with inotropes,” says Goedeke.

The company is first developing an acute therapy for patients who pres-ent at the hospital with ADHF while also building the foundation for a chronic implantable device.

The first embodiment of the com-pany’s platform will be a catheter that goes into the pulmonary artery via jugular access, in the manner of the Swan Ganz catheter used for blood pressure monitoring, and a pulse gen-erator located on the outside of the patient’s body, where it is controlled by a clinician. Once inside the artery, the device will deploy electrodes to stimulate the nerve branches that sig-nal heart cells to contract.

Many clinical specialists are familiar with delivering Swan Ganz catheters, Goedeke says. “We wanted to match

the skill sets of the providers in the care pathway.” According to Abraham, “This will be a technology that will ul-timately be able to be used by virtu-ally any cardiologist who has the basic skills for right heart catheterization:

interventional cardiologists, electro-physiologists, heart failure special-ists, or general cardiologists.” Notes Goedeke, “We are designing this prod-uct so that it is deliverable by a range of physicians in a range of settings, including the ED [emergency depart-ment] in rural Minnesota at 2 o’clock Sunday morning.” That will take some time and evidence generation, he ac-knowledges, but that’s the goal.

At this stage of development, how-ever, Goedeke notes that the ideal pairing is a cardiologist or heart fail-ure doctor with an electrophysiologist who is comfortable with navigation and fluoroscopy so investigators can confirm what is happening. The com-pany has tested its therapy in 18 hu-man subjects, the majority of them in Europe. “We have extensive human and preclinical data that shows that we can selectively improve contractil-ity without driving heart rate.”

Ultimately, Cardionomic expects its therapy to be offered as a chronic

implantable device for ambulatory patients who have responded well to the acute therapy. The device would activate upon sensing the on-set of ADHF and apply the therapy to “avoid fluid overload, the neuro-hormonal response, and hospital-izations,” according to Goedeke. He admits that’s many years away but believes that such a device would have a significant positive impact on patient outcomes over the long term.

The company is now raising a $6 mil-lion round to develop a custom prod-uct (proof of concept was obtained with off-the-shelf components) and take it to the clinic to demonstrate additional therapeutic efficacy. Go-edeke notes that at this point, several major risks have been taken off the table. Initial human studies demon-strated that the therapy did not cause arrhythmias in the treated subjects (an unknown when the company first started) and that it can improve con-tractility in heart failure patients even when they are on beta blockers. In effect, “We have critical evidence of safety and efficacy,” says Goedeke.

Cardionomic’s value proposition is its potential to improve outcomes and lower the cost of care by avoid-ing hospitalizations, shortening the length of stay, and avoiding wors-ening heart failure. “Worsening heart failure has a high prevalence, so it is a win for all stakeholders,” says Goedeke. Abraham adds, “If it works and is safe, it will do very well in the marketplace. At the present time, there are few if any evidence-based therapies for acute decom-pensated heart failure. If Cardio-nomic can demonstrate that [its device] improves in-hospital and post-discharge outcomes, it could become a standard of care for these patients.”

Initial human studies demonstrated that the therapy did not cause

arrhythmias in the treated subjects and that it can

improve contractility in heart failure patients

even when they are on beta blockers.

Online print subscriptions, reprints, and web posting and distribution licenses are available.Contact Kristy Kennedy at 480.985.9512 • k.kennedy@medtechinno.com

Vol. 1, No. 2Published twice monthly by Innovation In Medtech, llc

OCTOBER 10, 2014

WWW.MEDTECHSTRATEGIST.COM

Money Matters

FIRE 1: A New Model for Early-Stage

Device IncubationDavid Cassak, 30

Under the Lens: ENTSinuSys Finds Great Promise

in Kinder, Gentler Sinusitis Treatment

Mary Stuart, 26Start-Ups To WatchFIBRALIGN: Regenerative Medicine Approach to Secondary LymphedemaTracy Neilssien, 46

EMT PreviewEmerging Ortho/Spine Companies Target Unmet Needs with NOVEL,

LESS-INVASIVE SOLUTIONS

Mary Thompson, 39

Market TrendsBD/CareFusion:

MEDTECH CONSOLIDATION

CONTINUES David Cassak & Wendy Diller, 50

TRANSPLANT GENOMICS: Improving Organ Transplant

Management with Gene-Based TestsWendy Diller, 48

US TAVI Market Forecast 2013-2018E ($M) CAGR: 31.9%

See page 24

Industry SpotlightDirect Flow Medical:

LEADING TAVI’S NEXT WAVE

Stephen Levin, 16

Inside Story MegaMergers and the Evolving Medical Device Industry

Part II of our Interview with Medtronic’s Geoff Martha

David Cassak, 4

Edwards LifesciencesMedtron-

ic

Others10%

36% 54%

US TAVI Market Forecast, 2013-2018E

600900

1,200

2013

$302.4

$445.5$562.5

$726.6

$902.4

$1,208.3

$ Mill

ions

2014E 2015E 2016E 2017E 2018E

CAGR: 31.9%

MARKET TRACK

Vol. 1, No. 4Published twice monthly by Innovation In Medtech, llc

NOVEMBER 13, 2014

WWW.MEDTECHSTRATEGIST.COM

Medtech InvestingVCs Favor

Ophthalmology,Orthopedics Devices

Wendy Diller, 30

Under the LensAcuMEMS:

Wireless Pressure Sensing for the EyeImproves Glaucoma

ManagementMary Stuart, 26

Start-Ups To WatchCONSANO MEDICAL:

“Intelligent” Urinary Catheter Aimed at Early Sepsis Detection

Stephen Levin, 32

Start-Ups To WatchEXTREMITY MEDICAL:

Addressing Unmet Needs in the Distal Extremities

Wendy Diller, 34

Start-Ups To WatchENDOSPHERE SURGICAL: Enabling Laparoscopy and Notes with Better VisualizationMary Stuart, 36

Top Indications for Device VCs

2012-2013

Industry Spotlight

THE BIOARTIFICIAL PANCREAS: Edging Toward Reality

Mary Thompson, 18

Inside StoryLaunching the TAVR Revolution –

THE PVT STORYDavid Cassak, 4

MARKET TRACK

See page 30

0 1

2 3 4 5

6

Ophthalmology

Orthopedics

Surgica

l

Cardiova

scular

Diagnosti

cs

Vascular

Aesthetic

Neuro

Uro/Gyn

# of

Dea

ls

56% 44% Late (Series C+)

Early (Series A-B)

Editors-in-Chief: David Cassak & Stephen Levin

Mobile device-friendly digital magazine format – dazzling display on your computer, mobile phone or tablet

Insights that fuel your company’s growth

Read by senior life science executives, investors, physicians, entrepreneurs, and many others with a stake in the evolving device space

Superior content backed by a writing team with unparalleled industry experience

A level of coverage of the device marketplace broader and deeper than any other source

Reliable, In-Depth News and Analysis for Medical Device Decision Makers

www.InnovationInMedtech.com • www.medtechstrategist.com

Proud Provider of the

“So What” to the

Medical Device Industry!

MULTIPLE USERS AND GLOBAL LICENSES ARE AVAILABLE – for details, please contact: Kristy Kennedy, 480-985-9512 k.kennedy@medtechinno.com

Sharlene Whalen, 888-202-5939, ext 7 s.whalen@medtechinno.com

Vol. 2, No. 1Published twice monthly by Innovation In Medtech, llc

WWW.MEDTECHSTRATEGIST.COM

MARKET TRACK

Industry Outlook2014: The Year ofMedtech Mega-Mergers

MTS Editorial Team, 12

Under the LensCost and Reimbursement Trends:

What’s in Store for US Hospitals in 2015?

Mary Thompson, 22

Inside Story

Where is Medtech Innovation Headed?

–A Discussion with Medtronic’s Steve Oesterle, MD

David Cassak, 4

JANUARY 16, 2015

Appian Medical: Simplicity in Sleep Testing

Mary Stuart, 32

NVS Technologies Bets on “Plug and Play” Molecular Diagnostics

Wendy Diller, 34

Geneva Healthcare: Liberating CRM Data from the Cloud

Mary Thompson, 30

Start-Ups To Watch

NovioSense: Tracking Glucose in Tears

Mary Thompson, 26

InSpark Technologies: Predictive Patterns Guide Diabetes Management

Mary Stuart, 28

Briteseed: Intraoperative Vessel Sensing Makes MIS Safer

Tracy Neilssien, 36

Drug-coated Balloon Sales ($M)

Source: Larry Biegelsen, Wells Fargo Securities

$59M$91M

$221M

$339M

$446M

$524M

$589M$617M

$37M

Market Forecast: Drug Coated Balloon Sales ($M)

See page 21

Vol. 2, No. 2Published twice monthly by Innovation In Medtech, llc

WWW.MEDTECHSTRATEGIST.COM

market track

Market Update Cataract & Refractive Surgery:

All Eyes on Extended Depth-of-Focus IOLs

Michael Lachman, 20

Technology Trends

Using IT Innovation to Engage Hospital Patients

–An Interview with NY-Presbyterian’s Associate Chief

Innovation Officer Peter Fleischut Wendy Diller, 26

Industry Outlook

Looking Forward to 2015 in the Medtech Industry

MTS Editorial Team, 4

JANUARY 30, 2015

Start-Ups To Watch

Sano LLC: A “Litmus Test” for Wounds

Mary Stuart, 32

Start-Ups To Watch

4Dx: Improving Lung Disease Detection

Tracy Neilssien, 34

Start-Ups To Watch

Verisante Technology:Enabling Real-Time, Multispectral Noninvasive Cancer Diagnosis

Wendy Diller, 36

Presbyopic Populations Eligible for Surgical Corrrection

See page 25

Figure 2

Presbyopic Populations Eligible for Surgical Correction13 Developed Countries*, Age 45-64**, Year 2020

*13 countries included: Americas (US, Canada, Argentina, Brazil, Colombia), Europe (France, Germany, Italy, Spain, UK), Asia-Pacific (Japan, South Korea, Australia)

** Cataract surgery and prior cataract populations not limited to age 45-64

SOURCE: EyeQ Research

Presbyopic Population Pool:333 million

Surgical Upgrade Opportunity:6 million patients per year

103M Myopes

27M Prior Cataract** (prev. 5 yrs)

100M Hyperopes

103M Emmetropes 5.7M

Cataract Surgery**

300,000 LASIK (age 45+)

Figure 2

Presbyopic Populations Eligible for Surgical Correction13 Developed Countries*, Age 45-64**, Year 2020

*13 countries included: Americas (US, Canada, Argentina, Brazil, Colombia), Europe (France, Germany, Italy, Spain, UK), Asia-Pacific (Japan, South Korea, Australia)

** Cataract surgery and prior cataract populations not limited to age 45-64

SOURCE: EyeQ Research

Presbyopic Population Pool:333 million

Surgical Upgrade Opportunity:6 million patients per year

103M Myopes

27M Prior Cataract** (prev. 5 yrs)

100M Hyperopes

103M Emmetropes 5.7M

Cataract Surgery**

300,000 LASIK (age 45+)

TWICE-MONTHLY

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