Critical info on investment challenges and opportunities in medical technology investing. Sage advice from Silicon Valley Bank. www.mikeklein2010.wordpress.com

1. Venture Healthcare – Industry Update
SV B - P h oen ix C on feren ce
P h oen ix M ed icalD evice C on feren ce
O ctober2 0 15

2. Jon N orris- jn orris@ svb.com 2
 Manage West Coast Healthcare Relationships
for SVB across the SVB Platform, including
 Fund of Funds (Investment as LP)
 Direct Equity (Co-Investments and Rights to Invest)
 Commercial Bank (Venture/Mezzanine Debt, Asset-based Debt,
New Fundings)
 Equity Financing Strategy for Early Stage and Venture-Backed
Companies
 Industry Thought Leadership
Jon Norris: Managing Director, SVB Capital
Jonathan Norris
Managing Director,
Healthcare
Silicon Valley Bank
Mobile 650.575.1377
jnorris@svb.com
Twitter: @jonnysvb
 Publications
 Trends in Healthcare Investments and Exits (2015)
 A Year of Dazzling Returns: 2014 Healthcare Investments
and Exits (2015)
 Trends in Healthcare Investments and Exits (2014)
 Strong Momentum in Healthcare (2013)
 First Mover Advantage (2012)
 Continued Rebound (2012)
 Trends in M&A (2011)
 Bringing Home the Bacon (2010)

3. 3Jon N orris- jn orris@ svb.com 3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3Q2015
Total VC
Dollars ($B)
$99 $38 $21 $19 $22 $23 $27 $31 $30 $20 $23 $28 $27 $30 $50 $47
Biopharma 4% 9% 15% 19% 19% 16% 17% 17% 15% 19% 17% 17% 16% 15% 12% 12%
Device 2% 5% 9% 8% 8% 10% 11% 12% 11% 13% 10% 10% 9% 7% 5% 4%
Healthcare Investment/Total Venture Investment
Source: PricewaterhouseCoopers, and SVB proprietary data
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3Q2015
$Billions
Total VC Dollars ($B) Biopharma Device
$99

4. 4Jon N orris- jn orris@ svb.com 4
Historical Trend Data for Device 2000-3Q2015
3Q2015
Source: PricewaterhouseCoopers, NVCA, Thomson Reuters

5. 5Jon N orris- jn orris@ svb.com 5
Device Investment Into Venture - Consistency since 2009
Year Device $ Invested Dollars as % of Total VC
2007 $3.7 Billion 12%
2008 $3.6 Billion 11%
2009 $2.6 Billion 13%
2010 $2.5 Billion 10%
2011 $2.9 Billion 10%
2012 $2.6 Billion 9%
2013 $2.1 Billion 7%
2014 $2.6 Billion 5%
1H2015 $1.3 Billion (stable) 4%
*3Q2015 Device $ Invested: $821M (includes $200M given to Mevion Medical, led by two Chinese investors)

6. 6Jon N orris- jn orris@ svb.com 6
0%
100%
200%
300%
400%
500%
0
1
2
3
4
5
6
7
8
9
10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$Billions
Gap in Funding HC $ Fundraised HC $ Invested % Capital Flow Ratio
Source: PricewaterhouseCoopers, Thompson Reuters, and SVB proprietary data
US Healthcare: Venture Dollars Invested and Raised

7. Jon N orris- jn orris@ svb.com 7
2015 Q1-Q3 US Device Series A:
14 US Series A (Institutional Investment or round> $2M)
2/14 Corporate (Boston, Ascension)
Median/Avg. Series A ($M): $2.5 / $4.6
Indications (2 or more): 4 Neuro, 2 Cardiovascular, 2 Ophthalmology
US Locations (2 or more): 2 NorCal, 3 SoCal, 2 PA
0
500
1000
1500
0
20
40
60
80
$Millions
#ofDeals
0
500
1000
1500
0
20
40
60
80
$Millions
#ofDeals
US Venture Series A
Source: SVB proprietary data, VentureSource, Pitchbook and CB Insights
Device
Biopharma
CVC % 6% 18% 15%
Median/Avg. Series A ($M) $6 / $6 $4 / $6 $5 / $8
CVC % 22% 30% 28%
Median/Avg. Series A ($M) $6 / $10 $10 / $19 $7 / $11
2012 2013 2014
Total Dollars Invested ($M)VC OnlyCorporate VC in Syndicate

8. Jon N orris- jn orris@ svb.com 8
0
4
8
12
16
20
24
#ofDeals
Early (Seed-Series B) Late (Series C+)
*Most active defined as top 14 investors based on new investments
Most Active* Venture Investors in Biopharma (2013-2014)
(Corporate)
Source: CB Insights and SVB proprietary data
12%
88%
: Polaris, J&J Dev’tTrends:

9. Jon N orris- jn orris@ svb.com 9
0
1
2
3
4
5
6
7
8
9
10
Early (Seed-Series B) Late (Series C+)
64%
36%
Most Active* Venture Investors in Device (2013-2014)
(Corporate)
Source: CB Insights and SVB proprietary data
: Sofinnova P., Sightline, Kearny, BioStar, Emergent, LightstoneTrends:
*Most active defined as top 13 investors based on new investments
#ofDeals

10. Jon N orris- jn orris@ svb.com 10
0
2
4
6
8
10
12
14
16
Early (Seed-Series B) Late (Series C+)
*Most active defined as top 61 investors based on new investments
Most Active* Venture Investments in Device by Indication
(2013-2014)
: Cardiovascular, Neuro, ENT : Uro/GynTrends:
58%
42%
Source: CB Insights and SVB proprietary data
#ofDeals

11. Jon N orris- jn orris@ svb.com 11
Most Active* Venture Investments in Device by Location (2013-2014)
*Most active defined as top 61 investors based on new investments (duplicate investments removed)
Source: CB Insights and SVB proprietary data
Northern CA,
32
Southern CA,
11
OUS, 9
MN, 5
WA, 3
MA, 3
2
1
1
1
1
1
1
1
OUS Countries
Ireland
Canada
India
Finland
China
United
Kingdom
France
Germany

12. 12Jon N orris- jn orris@ svb.com 12
Top New Money Venture Investors in 1H ’15
Most Active Biotech
VC Investors
# of New Money
Investments
Morningside Group 6
NEA 6
Fidelity Biosciences 5
Orbimed 5
Novo/Ally
Bridge/Venrock 4 (tie)
Most Active Device
VC Investors
# of New Money
Investments
NEA 3
Ally Bridge Group 3
Venrock 2
Ascension Ventures 2
Mountain Group Capital 2
Most Active Dx/Tools
VC Investors
# of New Money
Investments
Khosla Ventures 4
HealthQuest Capital 2
Novo Ventures 2

13. 13Jon N orris- jn orris@ svb.com 13
Q3 ‘15 Device Update
Q3 ‘15 Device Update:
4 Deals raising more than $100M rounds in Q3
Top deal in first half was only $57M.
6/10 Deals w/ Cross Over participation, versus 3/10 in Q2.
Not your typical BioPharma crossovers like RA and Rock Springs –
examples include Longwood, Third Point, Seneca and Woodford.
5/10 Deals included Corporate Venture, way up over previous years and up
over Q2 (2/10)
One deal with Boston, and a few with JJDC, but includes less known
players like Sino, Santen, Intersect Partners, Healthcor, and Hoya.
Endavor Vision did three new deals in Q3 (Reshape, Gynesonics, and
CeQur).
Swiss based firm that raised over $100M+ Medtech fund in late 2014
Final Take away:
New $ moving in to the sector – be prepared for lots of China interest
in 2016 (really, we mean it this time!)

14. Jon N orris- jn orris@ svb.com 14
0
5
10
15
20
25
#ofDeals
Biopharma Medical Device Tools/Dx
Most Active* Crossover Investors (2013-1H 2015)
Source: CB Insights and SVB proprietary data
*Most active defined as top 17 non-VC healthcare investors based on new investments
39% of these investments
have gone public or been
acquired during this time
period

15. 15Jon N orris- jn orris@ svb.com 15
Device Pre Money Valuations in Private Device Companies
2012 – 3Q2015

16. Jon N orris- jn orris@ svb.com 16
0
10
20
30
40
50
60
70
80
90
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3Q2015
#ofBigExits
Big Exit M&A VC-Backed IPOs
VC-Backed Healthcare IPOs and Big Exit M&A (2005- Q3 2015)
M&A = Pvt. VC Backed M&A >$50M Upfront for Tools/Dx & Device & >$75M Upfront for Bio
IPO = VC Backed IPO raising >$25M
Source: Investment bank reports, VentureSource, PitchBook, press releases, and discussions with life science professionals
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3Q2015
Big Exit
M&A
19 20 24 17 22 28 35 36 27 43 37
VC-
Backed
IPOs
32 29 21 2 3 12 7 11 37 83 52

17. Jon N orris- jn orris@ svb.com 17
0
2
4
6
8
10
12
14
16
18
20
22
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3Q2015
TotalValue($Billions)
Big Exit Upfront Payments Big Exit Milestones to be Earned Pre-Money IPO Value
*Potential distribution calculated as 75% of Upfront Payments, 25% of Milestones, and 75% of Pre-Money IPO Value
Potential Distributions* From VC-Backed IPOs and M&A (2005 – Q3 2015)
Source: Investment bank reports, VentureSource, press releases, CB Insights, and discussions with life science professionals
2015: Projected numbers outpace 2013
and approach last year’s record returns

18. Jon N orris- jn orris@ svb.com 18
VC Backed Device Exits by Quarter 2013 – Q32015
• Device IPOs: 4/7 IPOs in 1H’15 had <$11M Rev in Previous 12 months
• Q3: 9 M&A, with 5/9 companies Non-Approved; 3 CE Mark Only
Source: CB Insights, press releases, and SVB proprietary data
Q1 Q2 Q3 Q4 Total
2013 IPO 0 0 0 2 2
M&A 1 2 6 2 11
2014 IPO 1 5 1 3 10
M&A 2 9 5 2 18
2015 IPO 3 4 3 10
M&A 0 4 9 13

19. Jon N orris- jn orris@ svb.com 19
VC-Backed Device Exits by Stage (2009 – 3Q2015)
Source: Press releases, CB Insights, and SVB proprietary data
0
2
4
6
8
10
12
14
16
18
20
2009 2010 2011 2012 2013 2014 3Q2015
#ofBigExits
Non-Approved CE Mark U.S. Commercial
Represents number of IPOs
Represents Big Exit M&A
1 1
2
1
2
1 2 7
1 2 8

20. Jon N orris- jn orris@ svb.com 20Source: Press releases, CB Insights, and SVB proprietary data
VC-Backed Device Exits by Indication 2014- Q32015
0
1
2
3
4
5
6
7
8
9
10
#ofCompanies
Non-Approved CE Mark U.S. Commercial
Represents number of IPOs
Represents Big Exit M&A
1 1
1
1
1
2 3
2
1
1 1

21. Jon N orris- jn orris@ svb.com 21
0
200
400
600
0
4
8
12
16
20
DealSize($M)
0
200
400
600
0
4
8
12
16
20
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
DealSize($M)
VC-Backed Big Exit M&A
Biopharma
Device
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
#ofBigExits
Upfront $: Median ($M) 66 132 89 150 323 160 130 95 130 180
Total Deal $: Median 101 150 121 250 405 200 155 195 220 185
Upfront $: Median ($M) 230 410 346 200 200 158 208 155 200 225
Total Deal $: Median 230 435 346 285 403 380 407 350 440 413
Avg. Upfront ($M)Avg. Total Deal Value ($M)# of Structured Deals
Source: Investment bank reports, press releases, and
discussions with life science professionals
#ofBigExits
2015 Q1-Q3 Device Big Exit M&A:
Deals (Structured/Unstructured): 14 (8/6)
Upfront Median/Avg. ($M): $163 / $199
Total Deal Median/Avg. ($M): $227 / $272

22. Jon N orris- jn orris@ svb.com 22
VC- Backed Device M&A >$50M
SVB Proprietary Data: Private Venture Backed Big Exits
Average Multiple calculated at 85% of value divided by venture equity
2009-Q3’15
Number of
Exits
Stage:
Dev/CE/US
Average Years
to Exit
Vascular 18 1/6/11 7
Imaging 6 0/0/6 10
Cardiovascular 22 7/8/7 6.6
Surgical 16 1/2/13 7.7
Neuro 4 2/2/0 5
Orthopedics 7 0/0/7 7.3
Ophthalmology 6 1/2/3 6.7
Aesthetics 4 0/0/4 4.8
OVERALL AVERAGES 7.0

23. Jon N orris- jn orris@ svb.com 23
VC- Backed Device M&A >$50M
SVB Proprietary Data: Private Venture Backed Big Exits
Average Multiple calculated at 85% of value divided by venture equity
2009-Q3’15
Average $
Invested
($M)
Avg Up-
Front
Multiple*
on VC $
Avg $ Up-
Front
($M)
Average
Total Deal
Multiple* on
VC $
Average $
Total Deal
($M)
Vascular $49 5.4 $197 7.2 $277
Imaging $64 3.2 $109 3.2 $109
Cardiovascular $53 4.8 $215 8.2 $372
Surgical $43 5.7 $152 8.3 $189
Neuro $51 2.5 $131 2.6 $142
Orthopedics $69 4.8 $142 5.5 $168
Ophthalmology $68 4.5 $298 8.1 $437
Aesthetics $14 14 $331 14 $331
OVERALL AVERAGES $52 5.2 $192 7.5 $266

24. Jon N orris- jn orris@ svb.com 24
Top Acquirers – VC Backed M&A (2009-Q32015)
Acquirer Cardiovascular
Vascular
Surgical
Neuro
Ophthalmology
Orthopedics
Other
Respiratory
Uro/Gyn
ENT
Metabolic
SUM
Medtronic (Covidien) 6 6 10 2 0 0 0 1 1 0 0 26
Boston Scientific 5 1 0 1 0 0 1 1 1 0 0 10
Abbott 3 1 0 0 2 0 0 0 0 0 0 6
CR Bard 1 2 2 0 0 0 0 0 0 0 0 5
Stryker 0 1 0 0 0 3 0 0 0 0 0 4
Johnson & Johnson 0 1 0 0 0 0 0 0 0 1 1 3
St. Jude 2 0 0 1 0 0 0 0 0 0 0 3
Allergan 0 0 0 0 2 0 1 0 0 0 0 3
TOTAL 17 12 12 4 4 3 2 2 2 1 1

25. Jon N orris- jn orris@ svb.com 25
Device M&A by US Pathway and Revenue Stage
(2009-2014)
50%50%
510k/PMA
18%
18%
64%
510k
58%31%
11%
PMA
Pre-Revenue Early Revenue Growth Revenue
58%
34%
8%
510k
PMA
510k/PMA

26. Jon N orris- jn orris@ svb.com 26
Device M&A: Analysis by US Pathway
(2009-2014)
N = 45 N = 26 N = 6
510k PMA 510k/PMA
Median Time to Exit (Years) 6.5 6.8 6.2
Median $ Invested (MMs) $33.0 $62.0 $43.0
Median Up-Front $ Value (MMs) $120.0 $193.0 $85.0
Median Total Deal $ Value (MMs) $132.0 $325.0 $120.0
Median Upfront Multiple 3.68x 2.62x 2.35x
Median Total Multiple 3.76x 5.60x 2.73x

27. Jon N orris- jn orris@ svb.com 27
Device M&A: Values by Revenue Stage
(2009-2014)
510k n = 8 n = 8 n = 29
MMs Pre-Revenue Early Revenue Growth Revenue
Median Up-Front $ Value $83.0 $90.0 $135.0
Median Total Deal $ Value $100.0 $110.0 $150.0
Median Time to Exit (Years) 3.4 7.0 6.8
PMA n = 15 n = 8 n = 3
MMs Pre-Revenue Early Revenue Growth Revenue
Median Up-Front $ Value $193.0 $188.0 $230.0
Median Total Deal $ Value $325.0 $393.0 $255.0
Median Time to Exit (Years) 5.3 8.8 11.1

28. Thank you!!!
28SV B - P h oen ix C on feren ce

29. Medical Device Market Update
October 2015 CONFIDENTIAL

30. Average Revenue
Multiple (2) 5.81x 4.03x 3.76x 2.85x 4.53x 3.41x 3.85x 3.99x 4.19x 3.38x
Average Deal Value
(Excl. Mega Deals) (3) $216 $1,124 $1,193 $462 $370 $792 $630 $368 $517 $902
$6
$45
$37
$11
$14
$28
$20
$11
$14 $22
$38
$5
$19
$9
$73
$47
$19
$87
30
40
31
23
38
35
31
29
27
24
0
10
20
30
40
50
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Excluding Mega Mergers, Average Transaction Sizes are at Their Highest Levels Since 2008
MedicalDeviceM&AVolume(1)
DealVolume($bn)
Trends in M&A Volume
Represents
mega-deals
________________________
Source: Wall Street research, Company filings and FactSet.
Note: Transaction values include earnouts as disclosed. Valtech Cardio excludes earnouts (~$560mm incremental value at time of announcement).
(1) Historical statistics through 2012 per Wall Street research report dated 12/22/14. 2013 through 2015 per FactSet, Company filings and Wall Street research.
(2) Historical statistics through 2014 per Wall Street research report dated 12/22/14. 2015 per FactSet, Company filings and Wall Street research.
(3) Excludes Guidant, Synthes, Bausch & Lomb (take private and sale), Biomet (take private and sale), Covidien and CareFusion.
#ofDeals
2015 YTD:
Dentsply / Sirona
St. Jude / Thoratec
Hill-Rom / Welch Allyn
Cardinal / J&J Cordis
Greatbatch / Lake Region
Boston Scientific / Endo
AMS
Cyberonics / Sorin
Straumann / Neodent
Medtronic / Twelve
XIO Group / Lumenis
Edwards / CardiaQ
Heartware/ Valtech
Cardio
Integra / TEI
Allergan / AqueSys
Medtronic / RF Surgical
Abbott / Tendyne
St. Jude / Spinal
Modulation
Steris / General Econopak
Medtronic /Medina
Atricure / nContact
Medtronic / Aptus
Medtronic / Lazarus
TransEnterix / SOFAR
Robotics
Medtronic / CardioInsight
1

31. NA NA NA NA NA 4.70x NA NA NA NA NA NA NA NA2015 EV/Rev:
$929
$458
$400
$300
$250 $235
$175 $175 $150
$110 $100 $100 $99 $93
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
4.38x 6.86x ~3.00x 2.49x ~2.15x 3.30x 1.60x 1.66x 5.75x 4.50x2015 EV/Rev:
$5,560
$3,400
$2,050
$1,944 $1,730 $1,650
$1,400
$510 $478 $312
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
________________________
Source: Press Releases and Wall Street Research
(1) Includes potential earnouts.
(2) Excludes potential earnouts.
2015 Transactions To Date
Twelve SOFAR
Robotics
LaterStage/Commercial
DealValue($mm)
Mean: $1,903mm
Mean: $256mm
(1)
(1)
(1)
(2)
(2)
(2) (2)
(2) (2)
DealValue($mm)
EarlyStage
2

32. Selected Pre-PMA Medical Device Precedent Transactions
________________________
Source: Company website, filings, Wall Street research, and FactSet as of 10/16/15.
(1) Future payments tied to regulatory milestones were undisclosed.
(2) Represents approximate values assuming the pre-announcement Heartware closing price of $81.81 to imply upfront and future earn-out payments.
(3) Abbott acquired the remainder of the equity of Tendyne that it did not own for $225mm, or a transaction value of $250mm plus milestone payments.
Date
Announced
Acquiror Target
Target Public
vs. Private
CE Mark Upfront Value
Potential
Earnout
Total
Consideration
Earnout as a % of
Total
10/04/15 AtriCure nContact Private  $99 $50 $149 33.6%
09/03/15 Allergan AqueSys Private  300 NA 300 NA
09/01/15 Heartware Valtech Cardio Private  360 569 929 61.2%
08/25/15 Medtronic Twelve Private  408 50 458 10.9%
07/30/15 Abbott Tendyne Private  250 NA 250 NA
07/10/15 Edwards Lifesciences CardiAQ Valve Technologies Private  350 50 400 12.5%
08/19/13 St. Jude Medical Endosense Private  171 161 332 48.5%
07/15/13 Abbott OptiMedica Private  250 150 400 37.5%
06/07/13 St. Jude Medical Spinal Modulation Private  40 300 340 88.2%
11/08/12 Boston Scientific Vessix Vascular Private  125 300 425 70.6%
10/08/12 Boston Scientific Rhythmia Medical Private  90 175 265 66.0%
03/09/12 Boston Scientific Cameron Health Private  150 1200 1350 88.9%
12/20/11 Bard Lutonix Private  225 100 325 30.8%
01/19/11 Boston Scientific Atritech Private  100 275 375 73.3%
11/22/10 Medtronic Ardian Private  800 NA 800 NA
11/19/10 Boston Scientific Sadra Medical Private  193 193 386 50.0%
09/03/10 St. Jude Medical CardioMEMS Private  60 375 435 86.2%
07/07/10 Alcon LenSx Lasers Private  362 383 745 51.4%
09/10/09 Abbott Labs Evalve Private  356 90 446 20.2%
09/02/09 Abbott Labs Visiogen Private  400 0 400 0.0%
06/02/09 ev3 Chestnut Medical Private  75 75 150 50.0%
02/23/09 Medtronic CoreValve Private  700 150 850 17.6%
02/23/09 Medtronic Ventor Private  325 0 325 0.0%
02/13/09 Thoratec Heartware (terminated) Public  282 0 282 0.0%
01/12/09 Medtronic Ablation Frontiers Private  225 NA 225 NA
12/22/08 St. Jude Medical MediGuide Private  300 0 300 0.0%
09/25/08 Medtronic CryoCath Public  378 0 378 0.0%
06/16/08 Medicis Liposonix Private  150 150 300 50.0%
Mean $275 $206 $451 40%
Median 250 150 378 48%
(1)
(2)
(1)(3)
3

33. Top 50 Device Companies – Then vs. Now
Company MV ($mm)
1 Medtronic $60,037
2 Boston Scientific 29,696
3 Alcon 24,636
4 Guidant 23,122
5 Zimmer 19,669
6 Stryker 19,421
7 St. Jude Medical 15,043
8 Becton Dickinson 14,366
9 Synthes Inc 12,879
10 Biomet Inc. 10,964
11 C. R. Bard 6,697
12 Varian Medical 5,774
13 Kinetic Concepts 5,221
14 DENTSPLY 4,530
15 Hillenbrand 3,445
16 Bausch & Lomb 3,432
17 Cytyc 3,080
18 Edwards Lifesciences 2,452
19 Cooper Companies 2,312
20 Inamed 2,271
21 Teleflex 2,100
22 Respironics 1,926
23 ResMed 1,744
24 STERIS 1,641
25 Advanced Medical Optics 1,525
26 Sybron Dental 1,411
27 Intuitive Surgical 1,370
28 Mentor 1,367
29 Arrow 1,362
30 Integra LifeSciences 1,078
31 Kyphon 1,065
32 Given Imaging 994
33 Wright Medical 965
34 Haemonetics 937
35 CONMED 824
36 Adv. Neuromodulation Systems 803
37 Laserscope 789
38 Symmetry Medical 698
39 Syneron Medical (1)
692
40 ArthroCare 686
41 Align Technology 654
42 IntraLase 629
43 Orthofix (1)
614
44 Analogic 613
45 Datascope 587
46 SurModics (1)
573
47 Foxhollow Technologies 547
48 Aspect Medical Systems 510
49 Thoratec 504
50 Cyberonics 495
10YearsAgo(12/31/04)
Today
________________________
Source: Market values per FactSet as of 12/31/04 and 10/16/15. Note: Excludes Abbott, Johnson & Johnson and Baxter. Except for LivaNova, excludes announced
pending acquisitions. (1) Publicly traded today but not the public Top 50 medical device companies.
• Of the Top 50 standalone U.S. device companies U.S.
ten years ago, 24 (48%) have been acquired or taken
private
• Mid-cap companies that were sub-$10bn then
were slightly more vulnerable with 20 (50%)
out of 40 acquired or taken private
• P/E multiples for the remaining constituents have
compressed by >20% since their peak
• Over 50% of Today’s Top 50 constituents are new
entrants of the list
• Some IPOs / spin-off’s have been introduced
then acquired within the 10 year cycle (e.g.,
Covidien, AGA Medical, Tornier)
• Six were recent IPOs (Glaukos, Nevro, LDR,
K2M, Inogen, Penumbra)
Shaded companies since acquired / taken private or
new Top 50 entrants
Company MV ($mm)
1 Medtronic $104,763
2 Stryker 37,667
3 Becton Dickinson 29,343
4 Boston Scientific 22,941
5 Zimmer 20,040
6 St. Jude Medical 19,159
7 Intuitive Surgical 17,300
8 Edwards Lifesciences 16,265
9 C. R. Bard 14,481
10 Dentsply 7,922
11 ResMed 7,890
12 Varian Medical Systems 7,609
13 Cooper Companies 7,017
14 Dexcom 6,669
15 Sirona Dental 5,769
16 Teleflex 5,375
17 Align Technology 4,857
18 Abiomed 4,250
19 Steris 4,003
20 LivaNova 3,368
21 Hill-Rom Holdings 3,015
22 NuVasive 2,427
23 Cantel Medical 2,365
24 Globus Medical 2,211
25 Integra LifeSciences 2,207
26 Wright Medical 2,167
27 Masimo 2,091
28 ICU Medical 1,775
29 Insulet 1,759
30 Haemonetics 1,645
31 OSI Systems 1,639
32 Natus Medical 1,462
33 Penumbra 1,460
34 Greatbatch 1,396
35 CONMED 1,373
36 Halyard Health 1,340
37 Nevro 1,239
38 Merit Medical 1,067
39 Analogic 1,065
40 NxStage 1,002
41 Endologix 942
42 Conformis 914
43 Inogen 877
44 K2M 778
45 Heartware 764
46 LDR 764
47 Cynosure 740
48 Glaukos 733
49 AtriCure 621
50 Vascular Solutions, Inc. 594
4

34. $1,986
$7,028
$5,242
$1,311
$860
$1,849
$2,085
$1,074
$1,323
$1,838
$2,648
13
25
29
8 7
18
10
7
14
19
21
0
5
10
15
20
25
30
35
$0
$2,000
$4,000
$6,000
$8,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015YTD
IPOs FOs Converts No. of Offerings
The Equity Issuance Market Remains Active
________________________
Source: Wall Street research, Company filings and FactSet as of 10/16/15.
Note: Excludes deals below $25mm. Current market capitalization per FactSet. If over-allotment period still open, deals assume over-allotment fully exercised.
DealVolume($mm)
NumberofOfferings
• Positive equity market
environment and recovered
valuations allowed issuers to tap
the market
• Strongest new issuance market since 2007
• 18 IPOs (excluding Biomet), 19 Follow-
ons and 3 Converts since 2014
• Investor receptiveness
expected to continue
• Several IPOs in the
pipeline / on the road
1 2 3
5

35. Pricing Date Issuer Deal Value
Perform. vs
Russell2000
09/18/15 $75.9 (71.3%)
08/13/15 92.0 (30.6%)
08/04/15 231.5 1.1%
07/08/15 117.0 (11.1%)
06/30/15 16.0 (54.8%)
06/11/15 57.5 (15.8%)
06/02/15 103.0 (15.2%)
06/02/15 276.0 (6.5%)
05/28/15 41.8 (12.8%)
02/26/15 69.4 (26.6%)
02/02/15 130.4 0.3%
01/29/15 86.8 (33.2%)
10/29/14 51.9 95.8%
05/14/14 111.9 2.2%
04/16/14 48.0 (71.7%)
04/14/14 56.4 (76.5%)
02/24/14 98.7 5.9%
02/13/14 94.1 (9.8%)
01/24/14 86.3 (56.7%)
11/20/13 90.0 (57.7%)
11/07/13 67.3 136.7%
11/06/13 161.0 49.1%
10/29/13 46.9 (34.4%)
05/09/13 130.0 9.2%
04/25/13 98.3 (61.6%)
Mean $96.9 (16.3%)
Median 88.4 (15.5%)
02/13/15 $632.5 (11.4%)
06/04/14 201.0 (15.1%)
05/28/14 230.0 (51.6%)
12/05/13 86.0 (24.1%)
02/07/13 115.0 (3.7%)
Mean $252.9 (21.2%)
Median 201.0 (15.1%)
________________________
Source: Wall Street research, Company filings and FactSet as of 10/16/15.
Note: Excludes deals below $25mm. Current market capitalization per FactSet. If over-allotment period still open,
deals assume over-allotment fully exercised. Filed IPOs assume maximum size and launched IPOs assume
midpoint of range.
(1) Zimmer acquired Biomet for $13.4bn on 04/24/14.
(2) Valeant acquired Bausch & Lomb for $8.7bn on 05/27/13.
InitialPublicOfferingsSince2013
Last25Follow-OnOfferings
Last5Convertible
DebtOfferings
Medical Device’s Equity Issuance Activity
Pricing Date Issuer Deal Value
Current Market
Value ($mm)
Perform. vs
Russell2000
Filed [$1,000.0] NA NA
09/17/15 138.0 $1,460 37.6%
06/30/15 155.3 914 43.0%
06/24/15 124.2 826 36.6%
06/12/15 55.2 173 16.5%
06/04/15 109.5 286 (15.9%)
01/29/15 65.0 200 28.3%
01/28/15 41.7 72 (44.9%)
01/28/15 90.0 340 8.0%
11/18/14 36.2 283 (55.4%)
11/05/14 144.9 1,239 147.2%
10/28/14 86.3 104 (62.7%)
07/23/14 63.3 547 77.2%
05/07/14 147.4 778 20.7%
Acquired (1)
[100.0] NA NA
04/25/14 55.0 60 (69.8%)
04/15/14 89.7 119 (55.6%)
03/19/14 80.5 165 (43.2%)
02/27/14 84.2 496 15.4%
02/13/14 72.2 877 180.7%
11/13/13 138.0 247 (49.7%)
10/08/13 86.3 764 66.5%
Acquired (2)
[100.0] NA NA
Mean $90.8 $447 12.8%
Median 36.2 286 15.4%
6

36. Revenue Estimate Used: CY CY+1 CY+1 CY+1 CY+1 CY+1 CY+1 CY+1 CY+1 CY+2 CY+1 CY+1 CY+1 CY+1 CY+1
Expansion / (Contraction) 3.00x (0.14x) (0.82x) (2.34x) 0.44x 1.25x (2.90x) 5.94x 0.34x (2.50x) 0.99x (0.91x) 1.74x 2.96x 2.27x
5.97x
1.16x
2.31x
0.70x
3.00x
4.49x
0.32x
9.50x
4.23x
1.55x
4.43x
2.12x
8.15x 7.69x
6.24x
0.00x
3.00x
6.00x
9.00x
12.00x
IPO Date 02/13/14 02/26/14 04/15/14 04/25/14 05/07/14 07/23/14 10/28/14 11/05/14 01/28/15 01/28/15 01/29/15 06/04/15 06/24/15 06/30/15 09/17/15
IPO Pricing Year 2014 2015 2015 2015 2015 2015 2015 2016 2016 2017 2016 2016 2016 2016 2016
Revenue Estimate Used: CY CY+1 CY+1 CY+1 CY+1 CY+1 CY+1 CY+2 CY+1 CY+2 CY+1 CY+1 CY+1 CY+1 CY+1
CY Revenue $91 $284 $34 $15 $181 $35 $43 $31 $59 $2 $13 $74 NA NA $168
CY +1 Revenue $105 $309 $59 $33 $207 $66 $52 $36 $73 $9 $42 $97 $86 $108 $208
Market Cap at IPO $326 $434 $259 $186 $594 $275 $242 $485 $353 $133 $180 $383 $644 $664 $987
2.97x
1.29x
3.13x 3.05x
2.56x
3.25x 3.21x 3.56x 3.89x 4.05x
3.44x 3.03x
6.41x
4.73x
3.97x
0.00x
1.50x
3.00x
4.50x
6.00x
7.50x
INGN LMNS TRIV EVAR KTWO XENT SIEN NVRO ENTL LENS AVGR GI GKOS CFMS PEN
Device IPO Valuations – At Pricing and Current
________________________
Source: Wall Street research, Company filings and FactSet as of 10/16/15.
Note: Excludes MDWD due to not meaningful multiples and valuation based on discounted cash flow analysis. Excludes EYES due to fixed price offering and no research estimates. Current Lumenis
statistics assumes unaffected price as of 06/17/15.
Pricing Revenue Multiples at IPO
RevenueMultipleRevenueMultiple
Current Revenue Multiples Today
7