Siemens Venture Capital Healthcare

Siemens Venture Capital Healthcare Introduction 2009

Siemens: € 77 billion in 2008 revenues across three Sectors Healthcare € 11 Medical Solutions Energy € 23 Power Generation (WESTINGHOUSE) Power Transmission and Distribution Industry € 38 Cross-Sector activities € 6 IT Solutions and Services Siemens Financial Services (incl. SVC) 6,5% External sales of Sectors excluding Other Operations (as of September 30, 2008) Automation and Drives Industrial Solutions (INCL.WATER) Siemens Building Technologies OSRAM Transportation Systems

Siemens Healthcare – Products & Divisions
One of the world’s largest Medtech & IT companies
Headquarters in Erlangen, Germany and Malvern, PA
€ 11 billion in FY2008 revenues (14% of Siemens Revenues)
CEO: Hermann Requardt; VP of BD: Britta Fuenfstueck
* Represents US headquarters; all others except Audiology (Switzerland) are in Germany
Imaging (Bernd Montag) Computed Tomography (CT) Magnetic Resonance Imaging (MRI) Fluoroscopy & Angiography (AX) Molecular Imaging (PET/Biomarkers/Radiopharm)* Ultrasound* Diagnostics (Donal Quinn)* Central Lab* Point of Care* Molecular Workflow Solutions (Tom Miller) Audiology (Stefan Schaller) Oncology-Radiation Therapy (Holger Schmidt)* Mammography, Urology, Lithotripsy & Surgery Equipment (Jochen Dick) IT (Janet Dillione)* Hospital Information Systems* Radiology Information Systems Picture Archiving Systems Computer Aided Detection*

Siemens Venture Capital – Quick Facts
Financially-oriented strategic VC
Capital under management more than €800 million; amongst the world’s largest
Investments in over 120 companies and 30 funds
Investment focus: North America, Western Europe, China, India and Israel
19 investment professionals worldwide; 3 in Healthcare
Offices in Boston, Palo Alto, Munich, Beijing, Mumbai, and Tel Aviv*
In operation since January 1999
*Through Siemens Israel Ltd

Siemens Venture Capital – Value-Add To Smaller Companies U-Systems RadPharm, Sequenom, MIP, U-Systems Chemclin, Radpharm, BioImagene, U-Systems BioImagene, Chemclin, MIP All All SVC Invested Startup Siemens brand name recognition 1 Access to global sales channels (Regional distribution Agreements) 2 Financing 6 Access to Thought Leaders and Clinical Sites Worldwide 5 Management and Technical Expertise 4 Joint development with Siemens 3

Siemens Venture Capital – Investment Focus by Stages Idea Patent Prototype First Product IPO Market Acceptance Post-IPO Late stage Seed First sale Early stage 3 - 5 Years “ Accelerators” “ Siemens Venture Capital” “ M&A Group” Price Risk

Healthcare Team
Managing Partner. Board Member at RadPharm, U-Systems, Molecular Insight Pharmaceuticals; observer at MDdatacor and Zonare.
Former investor in Molecular Insight Pharmaceuticals (MIPI: NASD) & Sequenom (SQNM: NASD)
Former Managing Director & Institutional Investor Ranked Medtech Research Analyst at Alex Brown and Wachovia for more than 10 years. Raised over $2 Billion equity capital and published over 10,000 pages of research.
Prior consulting experiences leading cases at Arthur D. Little; also ran substantial dental practice.
MBA, Kellogg; DMD, Univ of Pennsylvania; BS, Rensselaer Polytechnic Institute.
Andrew Jay (Boston) Anupendra Sharma (Boston)
Partner. Board Member at China Diagnostics. Board Observer at Cylex and BioImagene
Former investor in in Sequenom (SQNM: NASD); Involved with U-Systems and Radpharm
Former Director of M&A at Siemens Corporation, responsible for Medical transactions. Over $5 billion in deals.
Prior experiences in Investment Banking at JPMorgan and Salomon Smith Barney, strategy consulting at McKinsey and Product Development Finance at Ford.
Advisor to several Entrepreneurship Centers; founded two companies
MBA Cornell; BE Electronics Engineering, BITS Pilani, India.
Edward Chan (Boston)
Associate in Boston.
Formerly Analyst at Capital One and Legg Mason.
Also worked with ETC Baltimore, the Maryland life sciences incubator.
Co-invented cardiac monitoring device in use today at Johns Hopkins Hospital.
Bachelor of Science in Biomedical Engineering from Johns Hopkins University with a concentration in Computer Engineering.
National Leadership Honor Society; Member of the Biomedical Honor Society.

Healthcare Portfolio: 10 current investments; 2 exits [Nuclear Medicine - Radiopharmaceuticals] IPO Feb 2, 2007 - NASD: MIPI [Diagnostics – Immune Function Assessment] [Diagnostics – China Diagnostics Medical Corporation] Diagnostics Imaging Exited Investments [Digital Pathology – BioImagene] [Diagnostics – Tools & Test Kits] NASD: SQNM [Healthcare IT – Disease Management] [Healthcare IT – Data Mining for CVD] [Image and Knowledge Management - Imaging CRO] Healthcare IT & Services [Ultrasound – Breast Cancer Scanning] [Ultrasound – Handheld Device]

Healthcare – Working with us
Transactions
Typically require a board seat.
Recognize that there will be times when we must recuse ourselves from discussions.
If we don’t take a board seat - full observer status is essential.
Standard information expectations.
Side letter to spell out interactions with the business units (e.g. Right of Information)
We do not always plan on acquiring portfolio companies.
Invest $3-6 million initially

Healthcare – Target Areas for Investment
Imaging & Related Technologies
Equipment
Applications, software and devices
Molecular Imaging & Biomarkers
Image guided systems and therapies
Diagnostics
Laboratory
Point of Care
Molecular
Pathology
Healthcare IT & Software
Medical database and data mining technology
Computer Aided Diagnostics
Imaging software applications
IT and related software for hospitals
Minimally invasive oncology therapy
Women’s Health
Surgical Equipment
Hearing Aids / Audiology

Portfolio Companies

Healthcare Portfolio Company BioImagene – Diagnostics
Located in Cupertino, CA
Founded in 2003; over 100 employees
The only digital pathology company with an enterprise-wide solution; a pay-per-click business model and a low-cost box offering
Developer of innovative FDA-approved diagnostic algorithms
BioImagene provides pathologists:
software for image analysis, management and collaboration
instrumentation for high resolution slide scanning
BioImagene has a 65-strong team in Pune, India for software and hardware development
BioImagene products are FDA -cleared for specific clinical applications .

Healthcare Portfolio Company China Diagnostics Medical Corporation – In-Vitro Diagnostics
Located in Beijing, China
Chinese name is Beijing Chemclin
Founded in 1999; 200 employees
Leading player in RIA, CLIA and Immunoassays in China; currently selling to over 3,000 customers
First Chinese company to get licenses to manufacture CLIA tests for HIV, HCV and several other markets
Company has 20 independent clinic laboratories around China
Business relationships to South Korea, India, Middle-east Arab and Pakistan countries

Healthcare Portfolio Company Cylex – In-Vitro Diagnostics
Located in Columbia, MD
Leading player in immune status testing selling an FDA cleared test to over 60 hospital customers.
Physicians use ImmuKnow to optimize suppression therapy on an informed individualized basis improving outcomes and reducing costs dramatically
Dominating solid organ transplant market; laying groundwork to enter enormous HIV, HCV, autoimmunity and cancer markets
Prestigious customers base includes Cleveland Clinic and Johns Hopkins. Test is a lynchpin to standard care protocols at 1/3 of customers and growing

Healthcare Portfolio Company RadPharm – Image and Knowledge Management
Located in Princeton, NJ
Founded in 1999; over 200 employees
Leading imaging clinical research organization (CRO) that conducts image management and interpretation
Market share leader in oncology related trials
Participated in 121 global trials in over 56 countries involving 5,000 sites
Radiologist founders and staffing provides intense domain knowledge
Extensive FDA experience including trial design and approval strategy
Growing international presence with opening of European office in Munich.

Healthcare Portfolio Company U-Systems – Ultrasound
Located in San José, CA
Founded in 10/98; 34 employees
Ultrasound systems for breast cancer detection
Full-Field Breast Ultrasound Imaging system automatically images the whole-breast and provides a unique Somogram™ of the scanned breast
Somogram is an ultrasound image that allows one-to-one correlation with the mammogram, which is expected to improve and enhance the current ultrasound practice in early detection and diagnosis of breast cancer and breast diseases

Healthcare Portfolio Company Zonare – Ultrasound
Located in Mountain View, CA
Provider of compactable ultrasound products for diagnostic imaging.
The company targets its products for existing ultrasound markets, such as general imaging, obstetrics/gynecology, and cardiology, while enabling emerging markets.
z.one Ultrasound System - Clinicians are able to instantly convert the system from a full-featured, cart-based unit into a premium compact ultrasound system with all the performance of substantially larger and more expensive ultrasound units, yet with greater portability and clinical flexibility than conventional compact systems.

Healthcare Portfolio Company MDdatacor – Healthcare IT (Data mining)
Located in Alpharetta, GA
Founded in 10/98; 19 employees
Started as a data mining company active in cardiology with over 145 client cardiology practices
Data on 14 million patients
Technology can parse and capture data from dictated notes
Shifted focus to disease management and pay for performance
Customers include BlueCross BlueShield of Iowa and United Health
Attracting interest from disease management players

Siemens Venture Capital – Healthcare Contacts Boston Office 801 Boylston Street, 5th Floor Boston, MA 02116, USA Tel.: +1 617 531 2901 Fax: +1 617 531 2908 www.siemensventurecapital.com Dr. Andrew Jay Managing Partner, Medical Solutions Fund Tel: +1 617 531-2901 E-Mail: [email_address] Anupendra Sharma Investment Partner, Medical Solutions Fund Tel: +1 617 531-2902 E-Mail: [email_address] Edward Chan Associate, Medical Solutions Fund Tel: +1 617 531-2905 E-Mail: [email_address] China Office Madeline Song Building 212 East Part of Wang Jing Garden, Li Ze Middle Str., Guang Shun North Str. Chaoyang District, Beijing, 100102, P.R.China Tel.: +8610-6476 8890 Fax: +8610-6476 4984 E-Mail: [email_address] Israel Office Orit Stav 13 Hamelacha St. Afeq Industrial Park 48091, Rosh Ha'ayin Israel Tel: + 972 3 9151558 Fax: + 972 3 9151551 E-Mail: [email_address] India Office Rajesh Vakil 130 Pandurang Budhkar Marg Worli, Mumbai 400 018, India Tel.: +91 22 6757 2203 Fax: +91 22 6757 2260 E-Mail: [email_address] Munich Office Kathrin Fox Thomas-Wimmer-Ring 3 D-80539 München GERMANY Tel.: +49 89 636 31546 Fax: +49 89 636 34884 E-Mail: [email_address] ens.com

SVC Healthcare: A Note
The focus of SVC Healthcare is Imaging (cap equipment and software), Medtech devices (where imaging is needed), Diagnostics and Healthcare IT. We don't do biotech/pharma deals. We typically like to invest after (or close to) first sale (which is typically an investment made at Series B or afterwards). We are looking to bring significant value to our portfolio companies by starting to leverage the strengths of Siemens (in a no-strings attached basis) within 18-months of making the investment.
SVC is an ROI-focused corporate venture capital firm that has invested €800 million since 1999. We are an evergreen fund with a separate legal entity. Siemens is our only LP. We are interested in early-stage companies that offer attractive returns while helping Siemens grow its top-line.
Within SVC Healthcare, we typically invest $4-6MM in each round in a company and invest in syndicates alongside financial investors (we've also invested more). We typically take Board seats (default option) or have full observer rights. Healthcare is a more recent effort and we have made 10 investments in healthcare sector in the US and China to date, and have exited 2 of these investments. Our current investments are:
Two Ultrasound companies (U-Systems and Zonare)
Two Diagnostics companies (China Diagnostics and Cylex)
Two Healthcare IT companies (Lifemasters and MDdatacor)
One imaging CRO / services company (Radpharm).
One digital pathology company (BioImagene)
We have exited two investments: Molecular Insight Pharmaceuticals (NASD: MIPI; Imaging agent; exit through IPO) and Sequenom (NASD: SQNM, Pipe investment sold in the public markets).
Siemens Healthcare is a €11 billion business that is #1 or #2 in the world in most segments it participates in. Healthcare plays in the Diagnostics, Imaging, Healthcare IT, Radiation Therapy, Audiology and Mammography segments of the market. Our CEO is Hermann Requardt, and our main offices are in Erlangen (Germany; near Munich) and Malvern, PA (near Philadelphia).
When we invest, we are looking to bring more than just money and the Siemens brand name. We seek to leverage the strengths of Siemens through arms-length relationships that can provide access to thought leaders who can publish, raise the profile, provide advice or bring access to top customers at Siemens centers, help set up clinical trial sites, assist in the development of hardware, software and clinical workflow solutions, jointly develop next-generation platforms or expand product portfolio offerings, and help startups source components or products. SVC Healthcare portfolio companies have also benefited from extending their reach by tie-ing up with Siemens for distribution or showcasing products in Europe and Asia. None of these actions are intended to reduce the independence of the startups, nor do they compromise the exit potential of the companies. Our incentives are completely aligned with financial VCs, so we are a very attractive partner to entrepreneurs and other VC firms. SVC can help act as a catalyst to bring these value-enhancing initiatives to portfolio companies, at the discretion of the startup management and the other investors. We understand the importance of independence, and how venture investing works.

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Siemens Venture Capital Healthcare

by Anupendra Sharma on Nov 29, 2008

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