2. Disclaimer Statement
Certain statements in this presentation are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and are provided under the protection of the safe
harbor for forward-looking statements provided by that Act. Forward-looking statements involve
risks and uncertainties which could cause results to differ materially from those projected and are
detailed from time to time in our SEC filings, including our annual report on Form 10-K filed on
August, 2013 and subsequent periodic reports. We encourage you to consider all of these risks,
uncertainties and other factors carefully in evaluating the forward-looking statements contained
in this release.
3. Our Founder, Chairman and CEO
Manny Villafaña is our founder and the Chairman and CEO of Kips Bay Medical. Mr.
Villafaña is globally recognized as a “Living Legend of Medicine”, an award-winning USA
Master Entrepreneur, a member of the Minnesota Business and Science & Technology Halls of
Fame and the past founder of medical device companies that have transformed the industry
of cardiac surgery and improved the lives of millions.
Co-inventor of the first lithium powered pacemaker and founder of
Cardiac Pacemakers, Inc./Guidant. All pacemakers now incorporate this
technology.
1
Co-developer of the St. Jude heart valve and founder of St. Jude Medical,
Inc. This is the most commonly used prosthesis in the world.
Co-inventor of the ATS heart valve and founder of ATS Medical, Inc. (now
part of Medtronic, Inc.)
Founder of Kips Bay Medical, Inc.
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4. A Long History of Value Creation
$27.2 Billion
$15.4 Billion Market Cap
$400 Million
Page 4
5. Coronary Artery Bypass Grafting (CABG)
What is CABG?
Coronary Artery Bypass Grafting involves the construction of an
alternative path to bypass a narrowed or occluded coronary artery and
restore blood flow from the aorta to an area past the occlusion.
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6. Coronary Artery Bypass Grafts
Vein Grafts Don’t Last as Long as Arterial Grafts
G
r
a
f
t
Internal Mammary Artery
P
a
t
e
n
c
y
Saphenous Vein
Synthetic Graft
Implant Years
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
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7. What We Do
eSVS® Mesh = external saphenous vein support
The eSVS Mesh is a kink-resistant, extravascular prosthesis made of
knitted nitinol (nickel/titanium alloy) wire and is designed to give an
implanted vein the physiological attributes of an artery.
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8. CABG - Standard of Care for Multi Vessel Disease
Synergy Between Percutaneous Coronary Intervention with Taxus and Cardiac
Surgery, or “SYNTAX”, study
Published in the New England Journal of Medicine March 2009
Evaluated long-term patient outcomes based upon survival rate and need for re-intervention
12 months after surgery
Concluded CABG is the more effective long-term treatment for coronary artery disease
January 2008 study compared drug-eluting stents with CABG in multi-vessel
coronary disease
New York study as Published in the New England Journal of Medicine
Determined death rates and revascularization rates were higher in patients receiving drugeluting stents than in patients receiving CABG
CABG was superior in spite of patients receiving CABG being older and having more severe
coronary disease
Practice Guidelines Recommend Bypass Surgery for Triple Vessel and Left Main
Disease
American Heart Association journal Circulation 2009
CABG is the only appropriate method of coronary revascularization for patients with triple
vessel disease or left main disease
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9. Annual World-Wide Market
CABG Procedures:
800,000 annually with
3.5 Grafts per Procedure of which
2.5 Grafts per Procedure are Saphenous
=
2.0 Million Potential eSVS MESH Grafts Annually
Wholesale ASP @ $1,200 per unit
Retail ASP @ $2,500 per unit
70%+ margin potential
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10. FDA Clinical Progress of the eSVS Mesh
• International Feasibility Trial – CE Mark Approval –
May 2010
Created significant questions for the FDA
We answered questions and concerns with follow-up angio’s from
first International Trials
• Dubai, UAE – single center experience
• Germany, Italy, Spain, Switzerland – multiple center
experience
• 5th of February! First USA Implant for feasibility trial
for U.S. FDA. Texas Heart, Mayo Clinic, Emory Heart,
N.E. Georgia have now enrolled patients.
10
Page 10
11. Dubai, UAE Retrospective Study
• Dr. Uwe Klima, Professor, MD - American Hospital Dubai
• Retrospective implant study with prospective follow-up of
commercially implanted eSVS Mesh
• All eligible SVGs treated with eSVS Mesh
• Patients underwent follow-up CT angiography 7-12 months post
implant
• Approx. 40 eSVS Mesh devices implanted
Patency Rates at 7-12 months
100%
90%
93.3%
86.3%
80%
70%
60%
Klima Study Patients
International Control Group
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12. eMESH I Trial Sites
• OUS Sites
–
–
–
–
–
–
–
–
University Hospital Bern, Switzerland - Dr. Lars Englberger (International PI)
Bordeaux University Hospital, Pessac, France - Prof. Louis Labrousse
C.H.U. Dupuytren, Limoges, France - Dr. Marc Laskar
G. Pasquinucci Heart Hospital, Massa, Italy - Dr. Mattia Glauber
Brothers of Mercy Hospital, Trier, Germany – Prof. Ivar Friedrich
University Hospital, Munster, Germany – Prof. Sven Martens
University of Freiburg, Germany - Dr. Matthias Siepe
8th site tbd
• Potential US Sites (include 4 US hospitals
–
–
–
–
–
–
–
- first four to receive approval)
Cleveland Clinic, Cleveland, OH - Dr. Joseph Sabik
Mayo Clinic, Rochester, MN – Dr. Hartzell Schaff
Texas Heart Institute, Houston, TX – Dr. Billy Cohn
Emory University Hospital, Atlanta, GA - Dr. John Puskas (USA PI)
Lenox Hill Hospital, New York, NY – Dr. Gregory Fontana
Beth Israel Medical Center, New York, NY – Dr. Robert Tranbaugh
NE Georgia Health System, Gainsville, GA – Dr. Alan Wolfe
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13. “eMESH I” Clinical Feasibility Trial
A multi-center, randomized study designed to demonstrate feasibility,
initial safety and performance of the eSVS Mesh as an external vein
support device for use over saphenous vein grafts during coronary
artery bypass:
• Prospective, randomized study of up to 120 patients.
• 8 investigational sites in Europe and 4* in the U.S.
• FDA requires 25 implants for each size (3.5mm, 4.0mm and 4.5mm) with a
minimum of 80 total patients.
• Primary safety endpoint is the rate of major adverse coronary events (MACE)
within 30 days of the procedure.
• Primary efficacy endpoint is the Angiographic patency rate at six months (<75%
stenosis).
• Post study – annual telephone follow-ups for five years.
* Staged enrollment in the U.S. – FDA requiring early review of results from
10 U.S./O.U.S. patients prior to allowing full U.S. enrollment.
Currently approved for 15 patients in the U.S.
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14. International Marketing Strategy
Independent distributor model
We require distributor to have an established client base in cardiac surgery
All contracts in US dollars
Mr. Villafaña has established commercially successful
independent distributor networks in past companies:
Cardiac Pacemakers, Inc./Guidant Corporation
St. Jude Medical, Inc.
ATS Medical, Inc.
Early phase of commercial sales with approximately $250K in
annual sales in 6 countries
Page 14
16. Solid Intellectual Property Position
Our issued patents and pending patent applications include claims
directed towards:
•
•
•
•
•
resilient and compliant structure.
providing structural support which inhibits vessel expansion.
providing a graft with physiological attributes similar to those of an artery.
methods critical to the surgical procedure.
delivery system design and implant deployment method.
5 issued patents and 2 applications pending in the US
6 issued international patents and 6 applications pending
•
includes 1 patent from the European Patent Office which has been
registered and validated in 8 countries.
Page 16
17. Platform for the Future
Synthetic
Grafts for
CABG
CABG
Surgery
Knitted
Nitinol
Technology
Peripheral
Bypass
Surgery
Dialysis
Access
Grafts
Page 17
18. Capitalization June, 2013
Debt
---
0.00%
Common Stock ($0.01 par value, 40M authorized)
Outstanding today
26,979,079
93.13%
Granted & Outstanding (WA exercise price $3.11)
1,387,500
4.79%
Total Option Pool
1,387,500
4.79%
Option Pool:
Underwriters’ Options
Total Common and Potential Options
603,125*
28,969,704
2.08%
100.00%
Page 18
19. Investment Highlights
New medical technology in a company founded by Manny Villafaña.
CE Mark approval & over 500+ implants to date – early indication of
device success.
Experienced management team with history of success.
eSVS MESH technology to address limitations in CABG surgery with
world-wide potential for 2.0 million eSVS Mesh grafts annually.
Very low (venture capital level) market capitalization.
Feasibility trial for U.S. FDA is in process.
Platform technology; ideal growth opportunity for strategic partner.
Strong IP position with 14 patents covering core device technology &
design issued in 12 countries.
Clean & efficient capital structure:
- Low cash burn rate.
- No debt / No preferred stock.
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