1. Emerging Med Tech Market Update
May 9, 2011
CONFIDENTIAL

2. Agenda
M&A Market Overview
IPO Market Overview

3. 1. M&A Market Overview

4. Med Tech M&A Environment: Increasingly Bifurcated World

5. Selected Med Tech M&A Transactions: 2009 – 2011YTD
A fraction of Med Tech companies wishing to sell were able to consummate M&A transactions since 2008 market meltdown
BioControl and CardioMEMS were staged deals, which included an option to acquire the company.
Large-cap companies include those with over $10 billion in market cap.
Mid-cap companies includes those with market caps less than $10 billion but greater than $1 billion.

6. Private Med Tech Companies: “Buying Time”5

7. 2. IPO Market Overview

8. Med Tech IPO Market Evolution
PRE-MARKET MELTDOWN
POST-MARKET MELTDOWN
$200 mm Revenue
$100 mm Revenue
$50 mm Revenue
$30 mm Revenue
FDA Approval
$0 mm Revenue
Pre-Approval
18 month gap
18 month gap
16 month gap
2009
2011
Q4 ’11 – 1H ’12? 7

9. Med Tech IPO Market Trends
We anticipate a very orderly reopening of the Med Tech IPO market with more mature companies leading the pack
First wave of IPOs post-market meltdown
Mature businesses with $ million revenue
Profitable (in most cases)
Opportunistic issuers driven by shareholder liquidity objectives
Often financial sponsor-backed vs. venture-backed
Typically some selling shareholder component as part of IPO to add size
Gradually expect lowering of “stage of development” bar to allow for return of “Traditional Med Tech IPO” defined as:
Single product or technology platform company
Modest profitability or unprofitable
Venture-backed
$ million IPOs with post-money IPO valuations of $275 million+
Keys to reopening of broader emerging growth Med Tech IPO market:
Positive investor experiences with recent Med Tech IPOs
Track record of IPO price being lowest cost point of entry to mitigate “we can buy it later cheaper” mentality
Existing public Med Tech companies trading at richer valuations, so relative risk / return assessment makes IPO comparison attractive
Valuations of public Med Tech companies returning to historical levels to support earlier stage IPOs

10. Stage Set for Improved Valuations of Public Med Tech
The lack of an IPO market to replenish the existing pool of public emerging growth Med Tech companies combined with steady M&A volume (reducing that pool of companies) will lead to same investment dollars chasing fewer companies…
NORMAL
Privates
Steady M&A Volume
Existing Public Med Tech Companies
15+ IPOs / year
Acquisitions
RECENTLY
Privates
RECENT ACQUISITIONS
Shrinking Pool of Existing Public Med Tech Companies
AMO
AMS
AGA Medical
Aspect Medical
ATS Medical
BioSphere Medical
ev3
HealthTronics
I-Flow
Micrus
Osteotech
SenoRx
Somanetics
Synthes
TomoTherapy
VNUS Medical
NO IPOs
…which should lead to existing public Med Tech universe appreciating in volume due to supply / demand dynamics, making those companies look more expensive and opening door for appropriately priced IPOs
Source: FactSet.

11. Existing Med Tech Universe Starting to Run
ATRICURE
CARDIOVASCULAR SYSTEMS INC
ATRC +167%
(Since 6/1/10)
Market Cap: $201mm
Market Cap: $175mm
CSII +126%
(Since 6/1/10)
NASDAQ
+27%
(Since 6/1/10)
NASDAQ
+27%
(Since 6/1/10)
MAKO SURGICAL
MAKO +153%
(Since 10/1/10)
Market Cap: $827mm
NASDAQ
+19%
(Since 10/1/10)
Source: FactSet.