1. © 2011 CATALYST HEALTH VENTURES
PRESENTATION AND SLIDES MAY NOT BE SHARED WITHOUT PERMISSION.
© 2012 CATALYST HEALTH VENTURES
PRESENTATION AND SLIDES MAY NOT BE SHARED WITHOUT PERMISSION.
CHV Presentation
April 16, 2014
Healthcare Investing that Impacts People’s Lives

2. Investing that Changes People’s Lives
5 investments; All Active
2 derivative investments
Actively Investing
2
Investing in Healthcare since 2000
CHV
I
Y2000
Y2008
Y2013
10 investments; 7 exits
1 Active
Notable Exits: Novazyme (Genzyme),
Biotrove (Life Technologies), Hansen Medical
(NASD: HNSN), GI Dynamics (AUS: GID)
10 investments; 3 exits
7 Active
Notable Exits: Biocius (Agilent), Vortex
Medical (AngioDynamics)
CHV
II
CHV
III

3. Investing that Changes People’s Lives 3
Who We Are
Joshua Phillips
Managing Partner
Darshana Zaveri
Partner
Kevin McCaffertty
Co-Founder, Special Partner
Robert Vigoda
Co-Founder, Special Partner
Dianne Letzelter
CFO & VP of Investor Relations

4. Investing that Changes People’s Lives
CHV Portfolio
4
12.7
1.6
5.8
2.1
Kaleidoscope
Medical

5. Investing that Changes People’s Lives 5
Healthcare Investing: Risks
 Longer Clinical and Development Cycles
 Uncertain Regulatory Environment
– No clear directive on Diagnostics
– Device approvals taking longer
 Uncertain Reimbursement Environment
– Harder to get paid for products and procedures
– Focus on outcomes
– Uncertainty in diagnostics reimbursement
 Overall Dampening Effect on Venture Investing
– Poor Returns, particularly IRR
– Fewer healthcare funds raised
CHV
III

6. Investing that Changes People’s Lives 6
Healthcare Investing: Opportunities
 16% of GDP and Growing
 Non Cyclical business
 Changing Demographics
– People living longer; Want to be active and stay at home as long as possible
– New healthcare needs created
 No overall change in Medtech companies appetite for acquisition
– Product pipeline weak post 2020
– Long term outlook favorable
CHV
III

7. Investing that Changes People’s Lives 7
Taking Advantage of the Opportunities
 Healthcare rapidly adopting value-based purchasing
 Industry focus is on improving outcomes and lowering cost
 Manifests in several ways
– Reimbursement
– Pricing
– Approvals
 All our portfolio companies demonstrate a clear value proposition
aligned with this new world
It’s not just amazing technology!

8. Investing that Changes People’s Lives 8
Our Strategy: Focus on Opportunity Selection
 Focus on Large Opportunities within Healthcare
– Billion $ markets
– Big clinical needs: Women’s Health, Cancer, Cardiology, Audiology
 Invest in Innovative Technology Solutions; Limit Scientific Risk
– High probability of value creation
 Capital efficient
– Responsible investing
– Entrepreneur friendly
 Earlier stage than traditional VC
– Ability to add significant non-financial value
– Fill a real financing gap
Meaningful impact on health

9. Investing that Changes People’s Lives 9
Case Study: Vortex Medical
 Challenged prevalent assumptions on investment needs
– Virtual Company; 1 employee
– Outsourced all non-core functions including Development, Regulatory and
Manufacturing
– Commission based sales model
 Challenged prevalent assumptions on regulatory, pricing and
reimbursement
– Clear, well thought out regulatory strategy resulted in non-clinical, 510K
clearance
– Clear, well thought out economic benefit analysis resulted in payment for
every single procedure
– Product commercialized in US first; One of the highest priced single use
devices on market
 Capital Efficient Model
– $3.5M total investment and <4 years from idea to exit
– Acquired by Angiodynamics Inc. (NASD: ANGO)
CHV
II
Transformed Standard of Care for PE; Superb Returns for Investors