1. Next Generation Ventricular Assist Devices Society for Medical Innovation and Technology 11-14 May 2006 Pebble Beach, Monterey, CA, USA presented to Jeffrey L. Helfer - Overview -

2. 2 Introduction Cardiovascular disease is the number one cause of death in the U.S. Approximately 1 million deaths per year in the United States alone. Nearly 2500 Americans die of CVD each day, an average of 1 death every 35 seconds. It is directly responsible for nearly twice as many deaths per year as ALL types of cancer. Cardiovascular disease is the most expensive disease in the U.S. Anticipated $403 billion in 2006 due to health expenditures and lost productivity. By comparison, the estimated cost of all cancers in 2004 was $190 billion, and in 1999 HIV infections totaled $29 billion. Existing treatments are woefully inadequate

3. 3 - Briefly - Types of Heart Failure Acute Heart Failure Chronic Heart Failure Acute-On-Chronic Heart Failure Heart failure developed over a long period of time Example: Serial MIs have turned large portions of the heart into scar tissue which does not contract and which impairs the function of remaining myocardium Quick onset usually closely preceding clinical presentation Example: Myocardial infarction (MI) with revascularization at less than ~ 6 hours after onset of symptoms Longstanding cardiac dysfunction who suffer recent de-compensation Example: Longstanding cardiomyopathy with the onset of atrial fibrillation. Surgery to correct the disease may result in worsened cardiac function Example: Mitral regurgitation with the onset of atrial fibrillation. Biophan’s product provides the potential for superior Rx across the full range heart failure conditions

4. 4 - Briefly - Infarct Expansion in Ventricle LV Before InfarctLV After Infarct During acute MI, the initial loss of contractile tissues adversely affects workload and wall stress on the remaining viable myocardium, providing a “substrate” for progressive ventricular enlargement.

5. 5 Infarct Expansion in LV - continued

6. 6 For each 25-mL increment in end-systolic volume, the risk for death increased exponentially over that of other survivors of myocardial infarction with preserved left ventricular volume. - Briefly - Relative Risk for Death in MI Survivors Factors that influence ventricular remodeling after MI can be modified to improve clinical outcome. Limiting the extent of ventricular remodeling in asymptomatic patients after MI can be considered as preventive therapy for symptomatic congestive heart failure. White HD, Norris RM, Brown MA, et al.: Left ventricular end-systolic volume as the major determinant of survival after recovery from myocardial infarction. Circulation 1987, 76: 44–51.

7. 7 Current Ventricular Assist Device (“VAD”) Technology Benefits Systolic support of a single ventricle Increase coronary perfusion and oxygen delivery via increased systemic pressure Patient mobility Problems Perforates the heart and great vessels High risk of patient complications due to clotting and stroke, bleeding, and infection Average procedure cost: $205,800 1 Limited applications at specialized transplant and cardiac centers [1] Oz. M., Annetine, C., Miller L. et al., Left Ventricular Assist Devices as permanent Heart Failure Therapy: The price of progress, Annals of Surgery. 238(4): 577-83, October 2003.

8. 8 Validation of the VAD Market Ventricular Assist Devices or “VADs” have already been shown to be superior to medical management for the treatment of heart failure. REMATCH patient survival data 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 135791113151719212325272931 Month Survival rate (%) OMM PatientsLVAD Patients The huge investment in VAD technologies continues to be a great indication of the potential of this market - despite serious short term and long term complications, While the therapeutic benefit of VADs is exciting, complications severely restrict their use

9. 9 Analysts project VAD sales to grow from $400M 1 (2003) to $7.2B 1 (2009) based upon existing VAD technologies and their (limited) indications for use. The total addressable VAD market is much larger than this – potentially as large as $25 billion for devices alone. Realization of this potential requires a product with significant improvements in device safety, efficacy, cost, and ease of use as well as additional diagnostic and therapeutic capabilities. Market Potential 1. According to ABN-AMRO, Morgan Stanley and S.G. Cowan’s senior medical device industry securities analysts.

10. 10  Single use, fluid-driven heart assist device called the “MYO-VAD” and proprietary Drive Unit  MYO-VAD composed of a dynamic outer shell and flexible inner diaphragm – fits the heart like a glove and avoids surgical trauma  Vacuum delivered to MYO-VAD inner cavity provides non-traumatic means of heart attachment  Drive Unit generates forces to power the inner diaphragm and actuate the myocardium  System generates normal hemodynamics without cardiac trauma  Small chest incision allows device positioning on the heart  Chest can be closed to provide temporary or extended support  Scientific term: Direct Mechanical Ventricular Actuation (“DMVA”) Prototypes have already been used to save human lives The Paradigm Shift Energize the best known blood pump – the native human heart!

11. 11 The Product Simple installation (~3 min’s) and removal Anticipated total procedure cost: $60,000 Likely to be available at nearly every community and rural hospital Benefits Non-blood contact promises to provide very low risk of patient complications and more rapid recovery Systolic and diastolic support to both ventricles. Enhanced myocardial perfusion Normal pulsatile flow Support of all size hearts in nearly all acute and chronic disease states (including long-term support) A “healing environment” with means to effectively deliver multiple therapies directly to the heart Current Limitations Not yet FDA approved Thoracotomy (Minimally invasive delivery anticipated) Not yet fully implantable (anticipated)

12. 12 A Rx for Acute Heart Failure 1. Technically simple, rapid installation & broad availability at virtually every hospital. 2. Potential for significantly improved outcomes A. Enhanced reperfusion (including therapeutic agents into the myocardium) limits the ischemic process. B. Likely to be utilized much earlier in the treatment process due to ease of installation/removal and reduced rate of complications 3. Complete support even to a fully asystolic heart (biventricular support with active systolic emptying and diastolic filling). 4. Pulsatile flow (proven to be important for the recovery of vital organs). 5. Likely to reduce side effects due to absence of anti-coagulation drugs. 6. Low total procedure cost. 7. Integrated diagnostic capabilities.

13. 13 - Briefly - Cell & Gene Therapy Cell therapy with skeletal myoblasts or stem cells promises to be a novel treatment for ischemic cardiomyopathy. When implanted into myocardium, myoblasts and stem cells appear to proliferate and differentiate into myotubes with the capability of forming functional muscle fibers. With increased understanding of the molecular pathogenesis of heart failure, investigators have also begun to explore the potential of gene therapy to rescue failing myocardium Initial clinical data are on myoblast transplantation by direct intraoperative injection which requires cardioplegic arrest and increases the risk of VA. Percutaneous repair provides very limited dosimetry. - however -

14. 14 Localization 1. Direct delivery of agents to the heart on a continuous basis 2. Optimal topical concentrations that cannot be achieved, maintained or even tolerated systemically 3. Enhanced transfer rates to cells or across cell membranes (the normal mechanism for delivering agents/signals to cells) Supportive Microenvironment 4. Delivery of nutrients to the localized cells A Potentially Superior Delivery Platform

15. 15 A Rx for Chronic Heart Failure 1. Full implantability very likely (84 days use already demonstrated) 2. High potential for recovery of normal cardiac function via multiple therapies: a. Immediate pumping support offloads mechanical stress on the heart and maladaptive response b. Adaptive constraint maintains low mechanical stress c. Enhanced cell/gene therapy capability d. Mechanical “training” of the weakened heart Nearly certain to promote re-remodeling – not just prevent further remodeling. 3. Treats multiple chronic HF conditions, including diastolic and RV failure. 4. Little or no potential for short-term or long-term complications. 5. Easily removed once the patient has recovered. High potential for many CHF hearts to recover allowing removal of the MYO-VAD, an outcome superior even to complication-free transplantation

16. 16 1. Supported 45-year old for 2 days following massive myocardial infarction with no damage to the heart. 2. Supported 71-year old for 2 days following heart surgery with no damage to the heart or by-pass grafts. 3. Supported 56-year old for 2-1/2 days as bridge to successful transplantation with no damage to native heart. 4. Supported 18-year old for 7-1/2 days until heart healed from a viral myocarditis with no damage to the heart. 5. Supported 44-year old for 84 days with normal neurologic function with no damage to the heart. Clinical Results In addition to human studies, over 700 animal experiments have been conducted to develop and patent the means to safely and effectively support human hearts while simultaneously providing a wide array of additional operational, diagnostic, and therapeutic capabilities.

17. 17 Acute Resuscitation (Implantation time ≤ 24 hours) Important rapid recovery during cardiac emergencies and maintaining cardiac output for short periods of time. Bridge-to-Recovery (Implantation time ≤ 7 days) Provides short-term support while the heart heals from moderate injury. A very important and growing market. Bridge-to-Transplant (Implantation time ≤ 12 months) Keeps patients alive until a new heart is available. Destination Therapy (Implantation time ~ 5 years) Permanent support. Huge potential for MYOTECH since other current design VAD problems severely limit usage. Therapeutic Recovery (Implantation time up to 6 months) Longer-term support from serious disease or injury. The potential for many hearts to recover, allowing device removal. Indication $23M $52M - $1,100 M $200 M $14,000 M $10,000 M $1,200 M $75M - $26,500 M - New market Expanded market 2002 Market Addressable Market Anticipated Indications for Use

18. 18 Product Demonstration Courtesy of Anatomical Travel Video

19. 19 The Results !