Med Tech by Hillol Sarkar

WORLD PREVIEW 2014, OUTLOOK TO 2020

October 2014 Welcome to the EvaluateMedTech® World Preview 2014, Outlook to 2020 EvaluateMedTech® provides trusted insights on the global medtech sector in a single solution that can easily integrate with your own analytical models. It allows medtech companies, financial institutions, consultancies, service providers and others to easily and rapidly track, benchmark and forecast the sector and focus on critical decisions to optimize performance. Our third annual EvaluateMedTech® World Preview brings together many of our analyses to provide a top level insight into the expected performance of the medtech industry between now and 2020. Based on EvaluateMedTech®’s coverage of the world’s leading medical device and diagnostic companies, the World Preview highlights trends in medtech including: consensus sales forecasts of leading industry analysts by device area to 2020; the top 20 companies in 2020; R&D spend current and future; FDA approvals; M&A; venture financing; IPOs; and enterprise value.

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EvaluateMedTech® Foreword

he third edition of the EvaluateMedTech® World Preview reveals that the medtech market is expected to grow at 5% per year (CAGR) between 2013 and 2020, achieving global sales of $514bn in 2020 (page 6). The analysis is based on in-depth forecast models for the top 200 global medtech companies available within EvaluateMedTech®. Our sales forecast represents the only current consensus view from equity analysts of the medtech market. J&J leads – for now October 2014 finds the medtech industry holding its breath. The year to date has been a fascinating one, with a remarkable 363% increase in the value of completed mergers in H1 2014 compared with the same time last year (page 18) – but things are about to get a lot more interesting. The single biggest merger in the sector’s history is set to close early next year, and when Medtronic and Covidien join forces the changes will be seismic. The World Preview uses consensus data based on analyst forecasts which do not as yet take this merger into account as the $42.9bn deal has not yet closed. Consequently, current forecasts put Johnson & Johnson as clear market leader in 2020 with medtech sales of $32.8bn. But if it does engulf Covidien, Medtronic will seize the top spot. The $13.4bn merger of Zimmer and Biomet will also contribute to a momentous year for medtech, altering the orthopedics sector profoundly. FDA premarket approvals pick up The regulatory situation is changing significantly too. After a disappointing 2013 in terms of first-time premarket approvals (PMAs) granted by the FDA, the agency has been more liberal so far in 2014, with 20 new PMAs to end of August (page 12). This is a 43% increase compared with the same point last year, and ties in with deliberate efforts the FDA is making to speed devices to market, such as streamlining the de novo regulatory process and a proposed expedited access PMA programme. A billion dollars in IPOs

While the ultimate goal for many early-stage medtech companies is still a takeout by one of the bigger groups, staying independent and going public has emerged as an increasingly popular strategy. EvaluateMedTech®’s new IPO analysis, available this year for the first time, shows that the first half of 2014 saw $1.3bn raised in completed IPOs (page 20). This is 44% more than the $900m raised in the whole of 2013. The global medical device market is growing fast and changing faster; the cardiology and orthopedic spaces alone are set to alter almost beyond recognition thanks to the megamergers. This time next year there could be a new market leader, and in an industry forecast to be worth more than half a trillion dollars in 2020, that is no insignificant achievement.

Ian Strickland Product Manager, EvaluateMedTech® 3

EvaluateMedTech® World Preview 2014, Outlook to 2020 – Analysis Highlights

Worldwide

medtech sales forecast to grow by 5.0% (CAGR 2013 to 2020), reaching $514bn – more than half a trillion dollars – by 2020

M edtech will grow more slowly compared with the prescription drug market, with a CAGR of 5.0% compared with pharma’s 5.3% between 2013 and 2020 J ohnson & Johnson is currently forecast to be the clear market leader in 2020 with medtech sales of $32.8bn... … but if the proposed merger between Medtronic and Covidien goes ahead as expected, combined forecasts will put the “new” Medtronic at the top M &A deal value jumps by an astonishing 363% to $30bn in H1 2014 vs. H1 2013, though deal count drops 10% T otal deal value of medtech venture financing falls 16% to $2.2bn in H1 2014 vs. H1 2013; number of venture financing deals slumped 24% to 199 S ignificant increase in medtech IPO activity in 2014. H1 2014 saw $1.3bn raised in completed IPOs, 44% more than the $900m raised in the whole of 2013 I n vitro diagnostics expected to be the world’s largest medtech segment in 2020, with sales of $71.6bn, with Roche to dominate with 17.0% market share in 2020 M edtronic remains top in cardiology to 2020 with sales of $11.1bn, a 19.4% market share. Lead set to increase following addition of Covidien J ohnson & Johnson continues to lead the orthopedics market with 2020 market share of 24.7% and sales of $11.3bn… … but following completion of its acquisition of Biomet, Zimmer is set to catch up, leapfrogging Stryker to take second place with a market share of 20.8% in 2020 Global medtech R&D spend set to grow by 4.2% (CAGR) to $30.5bn by 2020 J ohnson & Johnson and Siemens predicted to be neck and neck as the top medtech R&D spenders in 2020, with both set to invest $2.1bn in new programmes

F DA grants 23 first-time PMAs in 2013, a massive decrease of 44% from the 2012 figure of 41; 510(k) clearances also down, by 3% to 3,085… … but the situation reverses in 2014, with 20 new PMAs to end of August, representing a 43% increase compared with the same point last year

Table of Contents 6

Worldwide Medtech Sales by Device Area to 2020

Worldwide Medtech Sales in 2020: Top 20 Companies

Worldwide Medtech vs. Prescription Drug Sales (2007-20)

Worldwide Medtech R&D Spend (2007-20)

Medtech R&D Spend in 2020: Top 20 Companies

FDA Regulatory Analysis (2006-13)

2014 FDA First-Time PMAs and HDEs

In Vitro Diagnostics (IVD) Market to 2020

Cardiology Market to 2020

Diagnostic Imaging Market to 2020

Orthopedics Market to 2020

Ophthalmics Market to 2020

M&A Analysis: 2009 to H1 2014

Venture Financing Analysis: 2009 to H1 2014

IPO Analysis: 2013 and 2014

Enterprise Value & Focus Analysis: 2014 Latest vs. 2013

Worldwide Medtech Sales by Device Area in 2020 Worldwide Medtech Sales Forecast to Exceed Half a Trillion Dollars by 2020; In Vitro Diagnostics Remains Number One in 2020 EvaluateMedTech® finds that the worldwide medtech market isHalf forecast to grow by by 5.0% perInyear between 2013 and 2020, Worldwide Medtech Sales Forecast to Exceed a Trillion Dollars 2020; Vitro(CAGR) Diagnostics Remains achieving sales ofNumber $514bnOne in 2020. in 2020 EvaluateMedTech® finds that the worldwide medtech market is forecast to grow by 5.0% per year (CAGR) between

As in previous Worldwide years, EvaluateMedTech® that to in Exceed vitro diagnostics (IVD)Dollars is expected to remain largest segment in 2020 with sales of Medtech Sales finds Forecast Half a Trillion by 2020; In Vitrothe Diagnostics Remains 2013 and 2020, achieving sales of $514bn in 2020. $71.6bn, representing 14% of years, the worldwide medtech market. the IVD market is also to setremain to outpace the medtech Number One in 2020 As in previous EvaluateMedTech® finds thatImpressively, in vitro diagnostics (IVD) is expected the largest segment market as a EvaluateMedTech® finds that the worldwide medtech market is forecast to grow by 5.0% per year the (CAGR) between whole, growing by 6.1%with persales year of over the same timeframe. in 2020 $71.6bn, representing 14% of the worldwide medtech market. Impressively, IVD market is also 2013 and 2020, achieving sales of $514bn in 2020. The fastest growing segment in the top 15 is neurology, with a 7.1% CAGR between 2013 and 2020 and expected 2020 in sales 2020 of with sales of $71.6bn, representing 14% of the worldwide medtech market. Impressively, the IVD market is also $9.8bn. set to outpace the medtech market as a whole, growing by 6.1% per year over the same timeframe. The fastest growing segment in the top 15 is neurology, with a 7.1% CAGR between 2013 and 2020 and expected 2020 Analysis on Top 10 Device Areas in 2020, Market Share & Sales Growth (2013-20) sales of $9.8bn. Source: EvaluateMedTech® (18 SEP 2014)

WW Market Share % in 2020 WW Market Share % in 2020

set to outpacein thethe medtech as a whole, growing by 6.1%between per year over the same timeframe. The fastest growing segment top 15market is neurology, with 7.1% and 2020 and expected 2020 sales of $9.8bn. As in previous years, EvaluateMedTech® finds thata in vitroCAGR diagnostics (IVD)2013 is expected to remain the largest segment

18%

Analysis on Top 10 Device Areas in 2020, Market Share & Sales Growth (2013-20) Source: EvaluateMedTech® (18 SEP 2014)

16% 18%

In Vitro Diagnostics (IVD)

14% 16% 12% 14% 10% 12% 8% 10% 6% 8% 4% 6% 2% 4% 0% 2% +3.5%

Cardiology Diagnostic Imaging

Orthopedics

In Vitro Diagnostics (IVD)

Cardiology Ophthalmics

Diagnostic Orthopedics Imaging General & Plastic Endoscopy Drug Surgery Delivery Diabetic General & PlasticDental Endoscopy Care Surgery Drug Delivery Dental Diabetic Care +4.0%

+4.5%

0% Note: Bubble = WW Sales in 2020 +3.5% +4.0% +4.5% Note: Bubble = WW Sales in 2020

+5.0%

+5.5%

Ophthalmics

+6.0%

+6.5%

+7.0%

% Sales Growth: CAGR 2013-20

+5.0%

+5.5%

+6.0%

+6.5%

+7.0%

% Sales Growth: CAGR 2013-20

WW Medtech Sales by EvaluateMedTech® Device Area: Top 15 Categories & Total Market (2013/20)

Source: EvaluateMedTech® (18 SEP 2014) 6

Note: Analysis is based on the top 200 medtech companies. Sales in 2013 based on company reported data. Sales forecasts to 2020 based 6 on a consensus of leading equity analysts’ estimates for segmental sales.

Worldwide Medtech Sales in 2020: Top 20 Companies Johnson & Johnson Predicted to be Number One in 2020 - But This Could Change EvaluateMedTech® finds that Johnson & Johnson is currently forecast to be the largest medtech company in 2020, with sales of $32.8bn. However, the Worldwide company’s market share is expected to fall 7.8%Top to 6.4% 2013 and 2020 following the sale of its Ortho-Clinical Medtech Sales infrom 2020: 20between Companies Diagnostics unit to private equity. Johnson & Johnson Predicted to account be Number in 2020megamerger - But This Could Change Moreover, current forecasts do not take into theOne proposed of Medtronic and Covidien. With estimated combined sales Worldwide Medtech Sales inwhen 2020: Top 20 EvaluateMedTech® finds that Johnson & Johnson is currently forecast toCompanies be the largest medtech company in 2020, with sales of of $35.9bn in$32.8bn. 2020, representing a 7.0% market share, predictions are made next year it is likely that2020 this following new behemoth of medtech However, the company's market share is expected to fall from 7.8% to 6.4% between 2013 and the sale of will take the top spot from Johnson & Johnson. its Ortho-Clinical Diagnostics unit to to be private equity. Johnson & Johnson Predicted Number One in 2020 - But This Could Change Moreover, current forecasts doJohnson not take &into account the proposed megamerger of Medtronic and Covidien. estimated EvaluateMedTech® finds is currently forecast to be the largest medtech company in With 2020, with 16, sales of The biggest fallers in the rankings outthat to 2020 are Johnson Boston Scientific and Novartis. Novartis falls four placesyear to number largely due to the combined of $35.9bn in 2020,market representing a expected 7.0% market share, predictions are made is likely the thatsale this of $32.8bn. sales However, the company's share is to fall from when 7.8% to 6.4% between 2013 next and 2020 itfollowing disposal of itsnew blood diagnostic business in 2014 to Grifols. Boston Scientific falling four places to number 14 reflects the company failing to behemoth of medtech will take the top spot from Johnson & Johnson. its Ortho-Clinical Diagnostics unit to private equity. The biggest fallerscardiology in the rankings to into 2020 are Boston Scientificmegamerger and Novartis. placesWith to number 16, largely replace sales from its mature Moreover, current forecasts dobusiness. notout take account the proposed of Novartis Medtronicfalls andfour Covidien. estimated due to the disposal of its blood diagnostic business in 2014 to Grifols. Scientific falling four next places to itnumber reflects combined sales of $35.9bn in 2020, representing a 7.0% market share,Boston when predictions are made year is likely14 that this the company failing of to medtech replace sales from itstop mature cardiology business. new behemoth will take the spot from Johnson & Johnson. The biggest fallers in the rankings out to 2020 are Boston Scientific and Novartis. Novartis falls four places to number 16, largely due to the disposal of its blood diagnostic business in 2014 to Grifols. Boston Scientific falling four places to number 14 reflects the WW Medtech Sales: Top 10 Companies (2020) company failing to replace sales from its mature cardiology business. Source: EvaluateMedTech® (18 SEP 2014)

WW Medtech Sales ($bn) in 2020 WW Medtech Sales ($bn) in 2020

40 35 40 30 35 25 30 20 25

WW Medtech Sales: Top 10 Companies (2020) Source: EvaluateMedTech® (18 SEP 2014)

Sales ($bn) CAGR 2013-20 (%) Ranking Change 2013-20

32.8 +2% 32.8 +2%

24.0 +4% 24.0

15 20

+4%

22.1 +4% 22.1 +4%

10 15 5 10 05 0

Sales ($bn) CAGR 2013-20 (%) Ranking Change 2013-20

15.3 +4% 15.3 +4%

13.8

13.7

13.1

+4% 13.8

+5% 13.7

+5% 13.1

+5% (-)

(-)

+4% (-)

Johnson & Johnson (-)

Siemens (-)

Medtronic (-)

Roche (-)

Covidien (-)

Johnson &

Siemens

Medtronic

Roche

Covidien

Abbott Laboratories (-) Abbott

12.0

11.6

+3% 12.0

+3% 11.6

+5% +2

-1 +3%

Stryker +2

General Electric -1

Stryker

WW MedtechJohnson Sales: Top 20 Companies & Total Market (2013/20) Laboratories

WW Medtech Sales: Top 20 Companies &WW Total Market Medtech Sales(2013/20) ($bn)

WWCompany Medtech Sales: Top 20 Companies & Total (2013/20) Country 2013 Market 2020 % CAGR 13-20

General Electric

10.4 +8% 10.4 +5 +8% Essilor International +5

Philips -1 Philips

Essilor International

WW Market Share Rank 2020 Chg. (+/-) Chg. (+/-) 7.8% WW Market 6.4%Share -1.4pp Rank2013 2020 Chg.-0.2pp (+/-) Chg. (+/-) 4.9% 4.7% 2013

1 Johnson & Johnson USA 28.5 WW Medtech 32.8 +2.0% Sales ($bn) Country 2013 2020 % CAGR 13-20 2 Siemens Germany 17.9 24.0 +4.3% Company Johnson & Johnson USA 31Medtronic 17.0 22.1 +3.8% 4.7% 4.3% USA 28.5 32.8 +2.0% 7.8% 6.4% Siemens Germany 17.9 24.0 +4.3% 4.9% 4.7% 42Roche Switzerland 11.3 15.3 +4.4% 3.1% 3.0% Medtronic USA 17.0 22.1 +3.8% 4.7% 4.3% 53Covidien USA 10.2 13.8 +4.4% 2.8% 2.7% Roche Laboratories Switzerland 11.3 15.3 +4.4% 3.1% 3.0% 64Abbott USA 9.9 13.7 +4.8% 2.7% 2.7% Covidien USA 10.2 13.8 +4.4% 2.8% 2.7% 75Stryker USA 9.0 13.1 +5.4% 2.5% 2.5% Abbott Laboratories USA 9.9 13.7 +4.8% 2.7% 2.7% Electric 86General USA 9.8 12.0 +3.0% 2.7% 2.3% Stryker USANetherlands 9.0 13.1 +5.4% 2.5% 2.5% 97Philips The 9.4 11.6 +3.0% 2.6% 2.3% GeneralInternational Electric USA 9.8 12.0 +3.0% 2.7% 2.3% 108Essilor France 6.0 10.4 +8.2% 1.6% 2.0% Philips The Netherlands 9.4 11.6 +3.0% 2.6% 2.3% 119Danaher USA 7.0 9.6 +4.7% 1.9% 1.9% EssilorDickinson International USA 10Becton France 6.0 10.4 +8.2% 1.6% 2.0% 12 7.0 9.4 +4.4% 1.9% 1.8% Danaher 11Baxter USA 7.0 9.6 +4.7% 1.9% 1.9% International 13 USA 5.8 9.3 +7.0% 1.6% 1.8% BectonScientific Dickinson 12Boston USA 7.0 9.4 +4.4% 1.9% 1.8% 14 USA 7.1 9.3 +3.8% 2.0% 1.8% Baxter International 13 USA 5.8 9.3 +7.0% 1.6% 1.8% 15 B. Braun Melsungen Germany 6.9 9.2 +4.3% 1.9% 1.8% Boston Scientific 14 USA 7.1 9.3 +3.8% 2.0% 1.8% 16 Novartis Switzerland 7.0 9.0 +3.8% 1.9% 1.8% B. Braun Melsungen 15 Germany 6.9 9.2 +4.3% 1.9% 1.8% 17 Olympus Japan 4.9 8.0 +7.2% 1.4% 1.6% Novartis 16St. Switzerland 7.0 9.0 +3.8% 1.9% 1.8% Jude Medical 18 USA 5.5 7.5 +4.6% 1.5% 1.5% Olympus 17 Japan 4.9 8.0 +7.2% 1.4% 1.6% 19 3M USA 5.1 7.1 +4.8% 1.4% 1.4% 18 St. Jude Medical USA 5.5 7.5 +4.6% 1.5% 1.5% 20 Smith & Nephew United Kingdom 4.4 6.4 +5.7% 1.2% 1.2% 19 3M USA 5.1 7.1 +4.8% 1.4% 1.4% Total Top 20 189.6 253.5 +4.2% 52.1% 49.4% 20 Smith & Nephew United Kingdom 4.4 6.4 +5.7% 1.2% 1.2% Other 174.2 260.0 +5.9% 47.9% 50.6% Total Top 20 189.6 253.5 +4.2% 52.1% 49.4% Total 363.8 513.5 +5.0% 100.0% 100.0% Other 174.2 260.0 +5.9% 47.9% 50.6% Source: EvaluateMedTech® (18 SEP 2014) Total 363.8 513.5 +5.0% 100.0% 100.0% Source: EvaluateMedTech® Note: Analysis is based on(18 theSEP top2014) 200 medtech companies. Sales in 2013 based on company reported data.

-0.4pp -1.4pp

- -

-0.2pp -0.1pp

- -

-0.4pp -0.1pp -0.1pp -0.0pp

- - -

-0.1pp +0.1pp -0.0pp -0.3pp

- +2 - -1

+0.1pp -0.3pp -0.3pp +0.4pp

+2 -1

-0.3pp -0.0pp +0.4pp -0.1pp

-1 +5+1

-0.0pp +0.2pp -0.1pp -0.2pp

- +3 +1 -4

+0.2pp -0.1pp -0.2pp -0.2pp -0.1pp +0.2pp -0.2pp -0.0pp +0.2pp -0.0pp -0.0pp +0.1pp -0.0pp -2.7pp +0.1pp +2.7pp -2.7pp

+3 -1

-1 +5

-4 -1 -4 +2 -1 -1

-4 +2 -1 -1 +2

+2.7pp

Sales forecasts to Source: EvaluateMedTech® (18 SEP 2014) 2020 based on a consensus of leading equity analysts' estimates for segmental sales. Note: Analysis is based on the top 200 medtech companies. Sales in 2013 based on company reported data. Sales forecasts to 2020 based on a consensus of leading equity analysts' estimates for segmental sales.

Note: Analysis is based on the top 200 medtech companies. Sales in 2013 based on company reported data. Sales forecasts to 2020 based on a consensus of leading equity analysts’ estimates for segmental sales. 7

7 7

Worldwide Medtech vs. Prescription Drug Sales (2007-20) Prescription Drug Market Forecast to Outstrip Medtech between 2013 and 2020 EvaluateMedTech® finds that between 2013 and 2020 the prescription drug market is forecast to grow at 5.3% per year (CAGR), greater Worldwide Medtech vs.is Prescription Sales than the medtech industry’s forecast 5.0%. This in stark contrast toDrug the period 2010 (2007-20) to 2013 when the medtech sector grew much more Worldwide Medtech vs. Prescription Drug Sales (2007-20) rapidly than pharma. Prescription Drug Market Forecast to Outstrip Medtech between 2013 and 2020

In the last twoWorldwide EvaluateMedTech® World Previews, the medtech had also been outstrip the market in the future. EvaluateMedTech® finds that between and 2020 the industry prescription drug market is forecast forecast totogrow at 5.3% perpharma year (CAGR), Prescription DrugMedtech Market Forecast to2013 Outstrip Medtech between 2013 and 2020 vs. Prescription Drug Sales (2007-20) greater than the medtech industry's forecast 5.0%. Thisin isconfidence in stark contrast tomarket the period 2010 toto2013 the per medtech sector grew the EvaluateMedTech® finds that between and 2020 the prescription drug is forecast growwhen at 5.3% year (CAGR), With the passing of the pharma patent cliff and a2013 resurgence in the pharmaceutical and biotech industry, however, much more than pharma. greater than rapidly the medtech industry's forecast 5.0%. This is in stark contrast to the period 2010 to 2013 when the medtech sector grew prescription drug market has moved ahead. Prescription Drug Market Forecast to Outstrip Medtech between 2013 and 2020 In the last two EvaluateMedTech® World Previews, the medtech industry had also been forecast to outstrip the pharma market in the much more rapidly than pharma. EvaluateMedTech® finds that between 2013 and 2020 the prescription drug market is forecast to grow at 5.3% per year (CAGR),

future. With the passing of the pharma patent cliff and resurgence in confidence inbeen the pharmaceutical andthe biotech industry, In the last two EvaluateMedTech® World Previews, theaismedtech industry had also forecast to outstrip pharma market in the In 2014 and from 2016 onwards prescription drugs are forecast tostark grow faster medtech. This results medtech greater thanthe theprescription medtech industry's forecast 5.0%. This in contrast tothan the period 2010 to 2013 when in thethe medtech sectormarket grew falling to however, market has moved ahead. future. With the passing of drug theinpharma patent cliff and ain resurgence in confidence in the pharmaceutical and biotech industry, 49.7% of the prescription drug market 2020, versus 50.7% 2013. much more rapidly than pharma. In 2014 and from 2016 onwards prescription drugs are forecast to grow faster than medtech. This results in the medtech market falling

however, the prescription drug market has moved ahead. In last two EvaluateMedTech® World Previews, the medtech had also been forecast to outstrip the pharma market in the tothe 49.7% of from the prescription drugprescription market in 2020, versus 50.7% industry in grow 2013.faster In 2014 and 2016 onwards drugs are forecast to than medtech. This results the medtech market falling future. With the passing of the pharma patent cliff and a resurgence in confidence in the pharmaceutical andinbiotech industry, to 49.7% the of the prescription drug market 2020, ahead. versus 50.7% in 2013. however, prescription drug market hasinmoved

WW Medtech & Rx Sales ($bn) ($bn) WWWW Medtech & Rx Medtech & Sales Rx Sales ($bn)

In 2014 and from 2016 drugs Drug are forecast to grow faster than medtech. This results in the medtech market falling WW onwards Medtechprescription vs Prescription Sales (2007-20) to 49.7% of the prescription drug vs market in 2020,and versus 50.7%(2007-20) in 2013.(18 SEP 2014) Source: EvaluateMedTech® EvaluatePharma® WW Medtech Prescription Drug Sales

Source: EvaluateMedTech® and EvaluatePharma® (18 SEP 2014) WW Medtech vs Prescription Drug Sales WW Prescription Sales: +5.3%(2007-20) CAGR 2013-20 Source: EvaluateMedTech® and EvaluatePharma® (18 SEP 2014)

1,200

WW Prescription Sales: +5.3% CAGR 2013-20

1,000 1,200 1,000

WW Prescription Sales: +5.3% CAGR 2013-20

800 1,000 800 600 800 600 400 600 400 200 400 200

726

686

664

649

718 718

715 715

837

792

751

718

715

751 751

380

321

364

304

357

272

301

347

401

380

401

272

304

321

357

364

301

347

599

885 885 885

934

423

445

467

423

445

467

1,033 1,033

982 982 982

1,033

514 514

490 490

514 490 467 445 Medtech Sales: +5.0% CAGR 2013-20 401 WW 423

380

364

357

347

321

304

301

272

WW Medtech Sales: +5.0% CAGR 2013-20 WW Medtech Sales: +5.0% CAGR 2013-20

0 200 0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

0 WW Sales Growth % WWWW Sales Growth % % Sales Growth

664 664

649 649

599 599

726 726

686 686

837 837

792 792

934 934

WW Growth Rate: Medtech vs. Prescription Drug Sales (2008-20)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 14% WW Growth Rate: Medtech vs. Prescription Drug Sales (2008-20)

14% 2009: WorldMedtech economy vs. Prescription 2012: Euro crisis 12% WW Growth Rate: Drug Sales (2008-20) impacts euro sales 2012: Eurotocrisis converted dollars. impacts euro sales converted to dollars. 2012: Euro crisis impacts euro sales converted to dollars.

contracted -2.2% 2009: World economy contracted -2.2% 2009: World economy contracted -2.2%

12% 14% 10% 10% 12% 8% 8% 10% 6%

2017

2018

2019

2020

Medtech Growth per Year Prescription (Rx) Growth Medtech Growth per Yearper Year

Prescription (Rx) Growth per Year Medtech Growth per Year Prescription (Rx) Growth per Year

6% 8% 4% 4% 6% 2% 2% 4% 0% 0% 2% -2% -2% 0% -4% -2% -4%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2020 2020

WW Medtech vs. Prescription Drug Sales (2007-20) -4%

WW Medtech vs. Prescription Drug Sales (2007-20) WW Sales ($bn)

WW Medtech Prescription Drug Sales 2008 (2007-20) 2009 (2007-20) 2010 2011 Year 2007 WW Medtech vs.vs. Prescription Drug Sales

2012 2013 2014 2015 2016 2017 2018 2019 2020 WW Sales ($bn) WW Medtech Sales 272 301 304 321 347 357 364 380 401 423 445 467 490 514 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 WW Sales ($bn) Growth per Year +10.5% +1.0% +5.7% +8.2% +2.6% +2.0% +4.4% +5.5% +5.4% +5.3% +5.1% +4.8% +4.8% WW Medtech Sales 272 301 304 321 347 357 364 380 401 423 445 467 490 514 Year 2007 Medtech as % of Rx 45.5% 2008 46.3% 2009 45.7% 2010 46.8% 2011 47.8% 2012 49.9% 2013 50.7% 2014 50.6% 2015 50.6% 2016 50.5% 2017 50.3% 2018 50.0% 2019 49.9% 2020 49.7% Growth per Year +10.5% +1.0% +5.7% +8.2% +2.6% +2.0% +4.4% +5.5% +5.4% +5.3% +5.1% +4.8% +4.8% WW Sales(Rx) 272 301 304 321 347 357 364 380 401 423 WWMedtech Prescription 599 649 664 686 726 715 718 751 792 837 445 885 467 934 490 982 514 1,033 Medtech as % of Rx 45.5% 46.3% 45.7% 46.8% 47.8% 49.9% 50.7% 50.6% 50.6% 50.5% 50.3% 50.0% 49.9% 49.7% Growth +10.5% Growthper perYear Year +8.5% +1.0% +2.2% +5.7% +3.3% +8.2% +5.9% +2.6% -1.6% +2.0% +0.5% +4.4% +4.6% +5.5% +5.4% +5.4% +5.7% +5.3% +5.8% +5.1% +5.6% +4.8% +5.1% +4.8% +5.2% WW Prescription (Rx) 599 649 664 686 726 715 718 751 792 837 885 934 982 1,033 Medtech % of Rx 45.5% 46.3% 45.7% (18 46.8% Source:asEvaluateMedTech® & EvaluatePharma® SEP47.8% 2014) 49.9% 50.7% 50.6% 50.6% 50.5% 50.3% 50.0% 49.9% 49.7% Growth per Year +8.5% +2.2% +3.3% +5.9% -1.6% +0.5% +4.6% +5.4% +5.7% +5.8% +5.6% +5.1% +5.2% WW Prescription (Rx) 599 649 664 686 726 715 718 751 792 837 885 934 982 1,033 Source: EvaluateMedTech® & EvaluatePharma® (18 SEP+5.9% 2014) -1.6% +0.5% +4.6% +5.4% +5.7% +5.8% +5.6% +5.1% +5.2% Growth per Year +8.5% +2.2% CAGR +3.3% 2013-20

Source: EvaluateMedTech® EvaluateMedTech® & (18 EvaluatePharma® (18Sales SEP 2014) Medtech +5.0% Source: SEP WW 2014) CAGR 2013-20

WW Prescription Drug Sales +5.3% WW Medtech Sales +5.0% CAGR 2013-20 WW Prescription DrugSales Sales+5.0% +5.3% CAGR 2013-20 WW Medtech Note: Prescription drug sales based on top 500 pharmaceutical and biotech companies from EvaluatePharma®. WWWW Prescription Drug Sales +5.3% Sales to 2013 based on company reported sales data. Sales forecasts to 2020 based on a consensus of leading equity analysts' Medtech Sales +5.0% Note: Prescription drug sales based on top 500 pharmaceutical and biotech companies from EvaluatePharma®. estimates for segmental sales. WW Prescription DrugSales Sales +5.3% Sales Prescription to 2013 based onsales company sales data. forecasts to 2020 based on a consensus of leading equity analysts' Note: drug basedreported on top 500 pharmaceutical and biotech companies from EvaluatePharma®. estimates for segmental sales. reported sales data. Sales forecasts to 2020 based on a consensus of leading equity analysts' Sales to 2013 based on company estimates for segmental sales.

Note: Prescription drug sales based on top 500 pharmaceutical and biotech companies from EvaluatePharma®. Sales to 2013 based8on company reported sales data. Sales forecasts to 2020 based on a consensus of leading equity analysts’ estimates for segmental sales.8 8

Worldwide Medtech R&D Spend (2007-20) Global Medtech R&D Spend Set to Grow by 4.2% (CAGR) to $30.5bn by 2020 EvaluateMedTech® consensus Medtech forecasts find R&D that worldwide R&D spend is set to increase by 4.2% per year (CAGR) between 2013 Worldwide R&D Spendmedtech (2007-20) Worldwide Medtech Spend (2007-20) and 2020. This is lower than the forecast growth rate for medtech sales and, as such, R&D investment rate is forecast to fall to 5.9% in 2020 Set to to Grow Grow by by4.2% 4.2%(CAGR) (CAGR)toto$30.5bn $30.5bnbyby2020 2020 GlobalMedtech Medtech R&D R&D Spend Spend Set from 6.3% in Global 2013. EvaluateMedTech® forecasts find findthat thatworldwide worldwidemedtech medtechR&D R&Dspend spend increase 4.2% year (CAGR) EvaluateMedTech® consensus consensus forecasts is is setset to to increase by by 4.2% perper year (CAGR)

The top 20 medtech companies, however, spending slightly more than the medtech industry assuch, a R&D whole: in 2020rate they between 2013 This isare lower than the theforecast forecastgrowth growthrate ratefor for medtech sales and, R&D investment rate is invest 7.7% between 2013 and and 2020. 2020. lower than medtech sales and, asas such, investment is will forecast 6.3% in in 2013. 2013. of their sales on R&D.totofall forecast fall to to 5.9% 5.9% in in 2020 from 6.3% The however, are arespending spendingslightly slightlymore morethan thanthe themedtech medtech industry a whole: in 2020 invest Thetop top20 20medtech medtech companies, companies, however, industry as as a whole: in 2020 theythey will will invest 7.7% 7.7%ofoftheir theirsales sales on on R&D. R&D.

35 35

+9.4% +9.4%

30 30

+9.6% +9.6%

25 25

+5.8% +5.8%

20 20 15 15

17.5 17.5

19.2 19.2

18.9 18.9

20.0 20.0

21.9 21.9

22.9 22.9

5 5

23.8 23.8

24.8 24.8

27.1 27.1

28.2 28.2

30.5 30.5

2008 2008

2009 2009

8% 8% 6%

4% +4.4% +4.5% +4.3% +4.0% +3.9% +3.9% +4.2% +4.4% +4.5% +4.3% +4.0% +3.9% +3.9% +4.2% 2% 2%

-2% -2%

-1.7% -1.7% 2007 2007

10%10%

+2.2% +2.5% +2.2% +2.5%

10 10

0 0

22.4 22.4

25.9 25.9

29.4 29.4

R&D Spend Growth %

12%12% +4.2% CAGR 2013-20 +4.2% CAGR 2013-20

R&D Spend Growth %

WW WWMedtech MedtechR&D R&DSpend Spend($bn) ($bn)

WW Medtech Medtech R&D Spend WW Spend (2007-20) (2007-20) Source: EvaluateMedTech® EvaluateMedTech® (18 Source: (18SEP SEP2014) 2014)

2010 2010

2011 2011

2012 2012

2013 2013

2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

-4% -4%

WW Medtech R&D Spend (2007-20) WW Medtech R&D Spend (2007-20) WW Medtech R&D Spend (2007-20) WW Medtech R&D & Medtech Sales ($bn) 2007 2008 R&D 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Medtech & Medtech Sales ($bn) Year WW 17.5 19.2 18.9 2008 2009 20.0 2010 21.9 2011 22.4 2012 22.9 2013 23.8 2014 24.8 2015 25.9 2016 27.1 2017 28.2 201829.4201930.52020 Year 2007

Medtech R&D Spend Growth per Year Medtech R&D Spend 17.5 +9.6% 19.2 -1.7% 18.9 +5.8% 20.0 +9.4% 21.9 +2.2% 22.4 +2.5% 22.9 +3.9% 23.8 +4.2% 24.8 +4.4% 25.9 +4.5% 27.1+4.3% 28.2+4.0% 29.4+3.9%30.5 WW Medtech Sales 272.1 +9.6% 300.7 303.7 513.5 Growth per Year -1.7% 321.1 +5.8% 347.4 +9.4% 356.5 +2.2% 363.8 +2.5% 379.9 +3.9% 400.8 +4.2% 422.6 +4.4%444.9 +4.5%467.5 +4.3%489.9 +4.0% +3.9% R&DMedtech as % of Medtech +6.4% +5.9% WW Sales Sales 272.1 +6.4% 300.7 +6.2% 303.7 +6.2% 321.1 +6.3% 347.4 +6.3% 356.5 +6.3% 363.8 +6.3% 379.9 +6.2% 400.8 +6.1% 422.6+6.1% 444.9+6.0% 467.5+6.0% 489.9 513.5 R&Das as% %of ofMedtech Medtech Sales Sales (Top+6.4% 20 in 2020) R&D +6.4% +6.2% +6.2% +6.3% +6.3% 8.1% +6.3% +6.3% +6.2% +6.1% +6.1% +6.0% +6.0%7.7% +5.9% Source: EvaluateMedTech® (18 SEP 2014) R&D as %EvaluateMedTech® of Medtech Sales (Top(18 20 in 2020) 8.1% 7.7% Source: SEP 2014)

Source: EvaluateMedTech® (18 SEP 2014)

CAGR 2013-20 on Medtech R&D Spend +4.2% CAGR 2013-20 on Medtech R&D Spend +4.2% Cumulative 5 yearon R&D Spend R&D (2009-13) $106bn 2013-20 Medtech Spend +4.2% Cumulative CAGR 5CAGR year 2007-13 R&D Spend (2009-13) $106bn +4.6% on Medtech R&D(2009-13) Spend Cumulative 5 year R&D Spend $106bn CAGR 2007-13 on Medtech R&D Spend R&D Spend +4.6% +4.6% CAGR 2007-13 on Medtech Note: Analysis is based on the Top 200 medtech companies. R&D spend in 2013 based on company reported data. Forecast medtech R&D spend based on a consensus of leading equity analysts' estimates for company level R&D spend, extrapolated toismedtech R&D a company has non-medtech R&D activity. Note: Analysis based on thewhen Top 200 medtech companies. R&D spend in 2013 based on company reported data. Medtechmedtech R&D is not disclosed a number of companies and thisequity analysis is limited to those for companies sufficient disclosure. Forecast R&D spend by based on a consensus of leading analysts' estimates companywith level R&D spend, Notable omissions: Baxter and 3M. Note: Analysis is based the Top 200 medtech companies. R&D spend 2013 based on company reported data. extrapolated toon medtech R&D when a company has non-medtech R&Dinactivity. Medtech R&D is not disclosed by a number of companies and this analysis is limited to those companies with sufficient disclosure. Forecast medtech spendBaxter basedand on3M. a consensus of leading equity analysts’ estimates for company level R&D spend, extrapolated Notable R&D omissions:

to medtech R&D when a company has non-medtech R&D activity. Medtech R&D is not disclosed by a number of companies and this analysis is limited to those companies with sufficient disclosure. Notable omissions: Baxter and 3M.

Medtech R&D Spend in 2020: Top 20 Companies Siemens andMedtech Johnson &R&D Johnson Jointin Top Medtech Spenders in 2020 Spend 2020: TopR&D 20 Companies EvaluateMedTech® consensus forecasts find that Johnson & Johnson and Siemens will be neck and neck in terms of R&D spend in 2020, with Medtech R&Dset Spend in$2.1bn. 2020: Top Companies Siemens and Johnson & Joint Top Medtech R&D Spendersare in likely 2020 to be eclipsed, though, when forecasts are made next expenditure at both companies toJohnson reach Both of20 these companies EvaluateMedTech® consensus forecasts find that Johnson & Johnson and Siemens will be neck and neck in terms of R&D spend year for the combined Medtronic and Covidien. This company’s R&D spend could add up to $2.6bn in 2020, though it is likely to be a little inSiemens 2020, with expenditure both companies setMedtech to reach R&D $2.1bn. Both of in these are likely to be eclipsed, though, when and Johnson &atJohnson Joint Top Spenders 2020companies less than this forecasts as cuts are Nonetheless combined company almost certainly be R&D the top spender. aremade. made next year for thethe combined Medtronic and will Covidien. This company's spend could add up to $2.6bn in EvaluateMedTech® consensus forecasts find that Johnson & Johnson and Siemens will be neck and neck in terms of R&D spend

2020, though itexpenditure is likely to be a little less thisthe cuts are made. Nonetheless the combined company will with almost be Of the top 20, Lifesciences is tothan invest most into R&D as these a percentage ofare medtech sales, ancertainly R&D investment rate inEdwards 2020, with at forecast both companies set toas reach $2.1bn. Both of companies likely to be eclipsed, though, when the topbut spender. forecasts are next year for the combined Medtronic and Covidien. company's R&Din spend could add up to $2.6bn in of 13.7% in 2020, thismade represents a fall of 2.1 percentage points from theThis 15.8% rate seen 2013.

Medtech R&D Spend ($bn) in 2020 Medtech R&D Spend ($bn) in 2020

Of the top 20, Edwards is forecast invest the most R&D as athe percentage medtechwill sales, withcertainly an R&Dbe 2020, though it is likely Lifesciences to be a little less than thistoas cuts are made.into Nonetheless combinedofcompany almost investment rate of 13.7% in 2020, but this represents a fall of 2.1 percentage points from the 15.8% rate seen in 2013. the top spender. Of the top 20, Edwards Lifesciences is forecast to invest the most into R&D as a percentage of medtech sales, with an R&D investment rate of 13.7% in 2020, but this represents a fall of 2.1 percentage points from the 15.8% rate seen in 2013. WW Medtech R&D Spend: Top 10 Companies (2020) Source: EvaluateMedTech® (18 SEP 2014) 2,500 WW Medtech R&D Spend: Top 10 Companies (2020) R&D Spend ($m) Source: EvaluateMedTech® (18 SEP 2014)

CAGR 2013-20 (%)

2,500

2,000 2,000

2,069 2,069

R&D Spend ($m) CAGR 2013-20 (%)

2,068 2,068

1,500

1,844 1,844

1,500

1,285 1,000

1,285

1,267 1,267

1,255 1,141 1,255 1,141

1,000

1,005

915

1,005

801

915

500

801

500

+2%

+2% & Johnson 0 Johnson Johnson & Johnson

+4%

+3%

+2%

+4% Siemens

+3% Medtronic

+2% Roche

Siemens

Medtronic

Roche

+3% +3% Abbott Laboratories Abbott Laboratories

+3% +3% Philips Philips

+3% +3% General Electric General Electric

+2% +2% Boston Scientific Boston Scientific

+4% +4% St. Jude Medical St. Jude Medical

+6% +6% Stryker Stryker

WW Medtech R&D Spend: Top 20 Companies & Total Market (2013/20) WW Medtech R&D Spend: Top 20 Companies Total(2013/20) Market (2013/20) WW Medtech R&D Spend: Top 20 Companies & Total & Market Company 2013 1 Johnson 1,783 Company& Johnson 2013 21Siemens 1,614 Johnson & Johnson 1,783 32Medtronic 1,477 Siemens 1,614 Medtronic 43Roche 1,098 1,477 RocheLaboratories 1,098 54Abbott 1,007 Abbott Laboratories 1,007 65Philips 1,036 Philips Electric 1,036 76General 956 GeneralScientific Electric 956 87Boston 859 Boston 859 Jude Scientific Medical 98St. 691 St. Jude Medical 691 109Stryker 536 Stryker 10Danaher 536 11 551 Danaher 11Covidien 551 12 508 Covidien 12Becton 508 Dickinson 13 494 Becton Dickinson 13Terumo 494 14 303 Terumo Lifesciences 14Edwards 303 15 323 Lifesciences 15B.Edwards 323 Braun Melsungen 16 290 B. Braun Melsungen 16Essilor 290 International 17 218 17 Essilor International 218 18 Smith & Nephew 231 18 Smith & Nephew 231 19 Olympus 274 19 Olympus 274 20 bioMérieux 247 bioMérieux 20 247 Total Top 20 14,496 Total Top 20 14,496 Other 8,431 Other 8,431 Total 22,927 Total 22,927 Source: EvaluateMedTech® (18 SEP 2014) Source: EvaluateMedTech® (18 SEP Source: EvaluateMedTech® (18 2014) SEP 2014)

Medtech R&D ($m) 2020 CAGR 13-20 Medtech R&D ($m) 2,069 +2.1% 2020 CAGR 13-20

R&D As a % of Medtech 2020 R&D 2013 As a % of Medtech 6.3% 6.3% 2013 2020

Chg. (+/-) Chg.+0.0pp (+/-)

Rank Chg. (+/-) Rank Chg. (+/-)

2,068 2,069 1,844 2,068

+3.6% +2.1% +3.2% +3.6%

9.0% 6.3% 8.7% 9.0%

8.6% 6.3% 8.4% 8.6%

-0.4pp +0.0pp -0.3pp -0.4pp

1,285 1,844

+2.3% +3.2%

9.7% 8.7%

8.4% 8.4%

-1.3pp -0.3pp

1,285 1,267

+2.3% +3.3%

9.7% 10.1%

8.4% 9.2%

-1.3pp -0.9pp

- +1

1,267 1,255 1,255 1,141

+3.3% +2.8% +2.8% +2.6%

10.1% 11.0% 11.0% 9.8%

-0.9pp -0.2pp -0.2pp -0.3pp

+1 -1 -1 -

1,141 1,005 1,005 915

+2.6% +2.3% +2.3% +4.1%

915 801 801 761

+4.1% +5.9% +5.9% +4.7%

9.8% 12.0% 12.0% 12.6% 12.6% 5.9%

9.2% 10.9% 10.9% 9.5% 9.5% 10.9% 10.9% 12.1% 12.1% 6.1%

761 714 714 661

+4.7% +5.0% +5.0% +4.3%

5.9% 7.9% 7.9% 5.0%

6.1% 7.9% 7.9% 5.2%

661 456 456 423 423 389 389 381 381 364 364 341 341 331 331 18,470 18,470 12,024 12,024 30,494 30,494

+4.3% +6.0% +6.0% +3.9% +3.9% +4.3% +4.3% +8.3% +8.3% +6.7% +6.7% +3.2% +3.2% +4.3% +4.3% +3.5% +3.5% +5.2% +5.2% +4.2% +4.2%

5.0% 7.1% 7.1% 7.4%

5.2% 7.0% 7.0% 7.7%

7.4% 15.8% 15.8% 4.2% 4.2% 3.6% 3.6% 5.3% 5.3% 5.6% 5.6% 14.8% 14.8% 8.1% 8.1%

7.7% 13.7% 13.7% 4.2% 4.2% 3.7% 3.7% 5.7% 5.7% 4.3% 4.3% 13.1% 13.1% 7.7% 7.7%

6.3% 6.3%

5.9% 5.9%

-0.3pp -1.2pp -1.2pp -0.4pp

-0.4pp +0.2pp +0.2pp +0.0pp

- +1 +1 -1

+0.0pp +0.2pp +0.2pp -0.1pp

-1 - -

-0.1pp +0.3pp +0.3pp -2.1pp -2.1pp +0.0pp +0.0pp +0.0pp +0.0pp +0.4pp +0.4pp -1.3pp -1.3pp -1.6pp -1.6pp -0.4pp -0.4pp

- +1 +1 -1 +5 +3 -1 -

-1 +5 +3 -1 -

Note: companies.R&D R&Dspend spendinin2013 2013based basedononcompany company reported data. Note:Analysis Analysisisisbased based on on the the top top 200 200 medtech medtech companies. reported data. Forecast a consensus consensus of of leading leadingequity equityanalysts' analysts'estimates estimatesforforcompany company level R&D spend, Forecastmedtech medtechR&D R&D spend spend based based on on a level R&D spend, extrapolated has non-medtech non-medtechR&D R&Dactivity. activity. extrapolatedtotomedtech medtechR&D R&D when when a a company company has Medtech R&D not disclosed by of companies companies and thisanalysis analysis limitedon thosecompanies companies with sufficient disclosure. Medtech R&D nottop disclosed by aa number number of and this limited totothose with sufficient disclosure. Note: Analysis is based onisis the 200 medtech companies. R&D spend in 2013isisbased company reported data.

Forecast medtech R&D spend based on a consensus of leading equity analysts’ estimates for company level R&D spend, extrapolated 10 10 to medtech R&D when a company has non-medtech R&D activity. Medtech R&D is not disclosed by a number of companies and this analysis is limited to those companies with sufficient disclosure. Notable omissions: Baxter and 3M. 10

FDA Regulatory Analysis (2006-13)

FDA Regulatory Analysis (2006-13) FDA Regulatory Analysis Number of First-Time PMAs Almost Halves in 2013 to 23; 510(k) Clearances Down 3% to 3,085 (2006-13) EvaluateMedTech® found thatAlmost the FDAHalves grantedin23 newtoPMAs/HDEs/PDPs (first-time approvals) in 2013, a massive decrease of Number of First-Time PMAs 2013 23; 510(k) Clearances Down 3% to 3,085 44% from the 2012 figure 41.the 510(k) in 2013, but(first-time much lessapprovals) steeply, falling 3% atomassive 3,085. decrease of EvaluateMedTech® foundofthat FDAclearances granted 23also newdeclined PMAs/HDEs/PDPs in 2013, In 2013 Medtronic theof most overall clearances approvals/clearances, with 44% from the 2012had figure 41. 510(k) also declined in 784. 2013, but much less steeply, falling 3% to 3,085. In 2013 Medtronic hadAnalysis the most overall approvals/clearances, with 784. FDA Regulatory (2006-13) Number of First-Time PMAs Almost Halves in 2013 to 23; 510(k) Clearances Down 3% to 3,085 Numberfound of First-Time Almost Halves in PMAs/HDEs/PDPs 2013 to510(k)s 23; 510(k)&Clearances Down 3% PMA/PDPs to in 3,085 Count of 1st PMA/HDE/PDPs, Supplementary Per Year (2006-13) EvaluateMedTech® that thePMAs FDA granted 23 new (first-time approvals) 2013, a massive decrease of 44% found that the FDA granted 23 new PMAs/HDEs/PDPs (first-time approvals) in 2013, a massive decrease of Source: SEP 2014) from the 2012EvaluateMedTech® figure of 41. 510(k) also declined in(18 2013, but much less steeply, falling 3% to 3,085. Countclearances ofEvaluateMedTech® 1st PMA/HDE/PDPs, 510(k)s & Supplementary PMA/PDPs Per Year (2006-13) 44% from the 2012 figure of 41. 510(k) clearances also declined in 2013, but much less steeply, falling 3% to 3,085.

3,500

50 40

3,258 3,103

3,037

30 30 20

20 10 10 10

0 0

1,1171,488

1,062

1,117

44 44 2006

2006

1,488 1,488

2,382

2,326

2,000

1,498

3,085 3,085

18 30

2218

2008

2009

2010

22 43

500

2010

2011

2012

0 2012

2013

2007 2008 2009 2010 2011 2012 PDP 510(k) PMA/ Supplementary PMA/ PDP 1st Time 1st PMA/Time HDE/ PMA/ PDP HDE/ 510(k) Supplementary PDP

1st Time PMA/ HDE/ PDP

510(k)

3,000 2,500

2,500

2,326 2,326

2,000

2,000 1,500

1,500 1,000

1,000

2007

2,382 2,382 2,500

1,500

1,117 32

2007

1,498 1,841 1,498

1,841 2,1951,841

3,085

2,195 2,195

2,850

3,500 3,000

3,185

3,150

3,044

3,185 3,185

3,000

of Sup PMAs/ 510(k)s No.No. of Sup PMAs/ 510(k)s

3,500

3,258 50 Count of 1st PMA/HDE/PDPs, 510(k)s & Supplementary PMA/PDPs Per Year (2006-13) 3,150 3,103 3,044 3,037 3,258 50 Source: EvaluateMedTech® (18 SEP 2014) 3,150 3,103 60 2,850 3,044 3,037 2,850 40

No. of Sup PMAs/ 510(k)s

No. of 1st PMA/ HDE/ PDP

of 1st PMA/ HDE/ PDP No.No. of 1st PMA/ HDE/ PDP

Source: EvaluateMedTech® (18 SEP 2014) In 2013had Medtronic hadoverall the most overall approvals/clearances, with 784. In 2013 Medtronic the most approvals/clearances, with 784. 60

500

2013

500 0

2013

Supplementary PMA/ PDP

Count of 1st PMA/HDE/PDPs, 510(k)s &510(k)s Supplementary PMA/PDPs (2006-13) Count of 1st PMA/HDE/PDPs, & Supplementary PMA/PDPs

(2006-13) Count of 1st PMA/HDE/PDPs, 510(k)s & Supplementary PMA/PDPs (2006-13)

2006 Year Count of 1st PMA/HDE/PDPs, Year 44 1st Time PMA/ HDE/ PDP 1st Time PMA/ HDE/ PDP % Chg. Year Supplementary PMA/ PDP 1,062 Chg. PMA/ 1st%Time HDE/ PDP % Chg. Supplementary PMA/ PDP % Chg. 510(k) 3,258 Chg. %% Chg. Supplementary PMA/ PDP 510(k) Total 4,364 % Chg. %% Chg. Chg.

2007 2008 2009 2010 2011 2012 2013 510(k)s & Supplementary PMA/PDPs (2006-13) 2013 2006 30 2007 2008 2009 41 2010 32 18 22 43 23 2011 2012

44 -6% -27% 2006

32 -40% 2007

30 +95% 18 -5% 2010 22 +22% -44% 2008 2009

1,488-27% 1,498 44 32 +5% +33% +1% 1,062 1,117 -27%

1,841 2,326 -6% 2,195 -40%2,382+22%

43 2011

41 2012

23 2013

-5% 41 2,382 -5%

-44% 23 2,326 -44%

+5% -7% -2% 1,062+2% 1,117

+95% 30 18 22 43 +23% +19% +9% -2% 1,488 1,498 1,841 2,195 -6% 3,150 -40% 2,850 3,185+22% 3,085 +95% +33% +1%+1%+23% -6% -3% +19% 1,488+11% 1,498 1,841 2,195

3,2584,6213,037 4,186 4,560 +5%

3,103 3,044 4,713 5,434 +33% 5,388 +1%5,6082,850 +23%

+9% 2,382 3,185 +9% +1% 3,185

-2% 2,326 3,085 -2% -3% 3,085

5,608 +1%

5,434 -3%

1,117 3,037

3,103

3,044

3,150 +19% -4% +10% -7% -1% +3% +14% +4% -6% -3% +11% +2% -2% 510(k) 3,258 3,037 3,103 3,044 2,850 3,150 Count of PMA/HDE/PDPs, 510(k)s & Medtech Spend (2013) Total 4,364R&D 4,186 4,621 % Chg. -7% +2% 4,560 -2% 4,713 -6% 5,388 +11%

PMA/ HDEs - PMA/ -4% R&D Spend PDPs - +10% 510(k) -1% Total % Chg. +3% +14% -3% Total 4,364 4,186 4,621 4,560 4,713 5,388 +4% 5,608 5,434 First Approval ($m) Company Suppl. Clearance Approvals Chg. -4% +10% -1% (2013) +3% +14% -3% Count of PMA/HDE/PDPs, 510(k)s & Medtech R&D Medtronic 2 722 60Spend 784 1,477 +4% 1% Scientific 26 382 859 0 & Medtech 356 2 Boston Count ofof PMA/HDE/PDPs, 510(k)s Spend (2013) Count PMA/HDE/PDPs, 510(k)s & Medtech Spend PMA/ HDEsR&D - R&D R&D Spend PMA/ PDPs - (2013) 510(k) Total 160 2 101 1,783 57 3 Johnson & Johnson Approval ($m) Company Suppl. Clearance Approvals Laboratories 2 First 133 146 1,007 11 4 Abbott PMA/ HDEs - PMA/ PDPs R&D Spend 510(k) Total Medtronic 2 98 60 784 1,477 Lifesciences 323 Approvals 105 7722 0 First Approval 5 1Edwards ($m) Company Suppl. Clearance 1,098 105 26 19 1 6 2Roche Scientific 382 859 02 85 356 Medtronic 722 60 784 1,477 1 Boston 691 99 14 0 85 7 St. Jude Medical & Johnson 160 20 101 1,783 57 3 Johnson Boston Scientific 26 382 859 356 2 60 1,614 54 0 6 8 Siemens Abbott Laboratories 22 2 133 146 1,007 11 4Stryker 59 536 57 0 93 Johnson & Johnson 160 101 1,783 57 Edwards Lifesciences 323 105 7 02 54 5BIOTRONIK 0 3 98 57 123 10 4 Abbott Laboratories 133 146 1,007 11 23 3,085 5,434 19 Roche 1,098 105 102,326 85 6Total Edwards Lifesciences 323 105 7 98 5 Source: EvaluateMedTech® Jude Medical (18 SEP 2014) 691 99 14 01 85 7 St. Roche 1,098 105 19 85 6 60 1,614 54 00 6 8 Siemens Note: Based onMedical Devices@FDA data. St. Jude 691 99 14 85 7 PMA (Premarket Approval): a class III device which0is a ‘life-sustaining implantable device'; usually require 59 536 57 26 or life-supporting 9 Stryker Siemens 60 1,614 54 0 8 trials. 00 Class I, II, III device 54 3 not required). 57 123 10 510(k): "substantially equivalent” to a legally marketed (where PMA Stryker 59 536 57 2 9 BIOTRONIK

23 2,326 3,085 5,434 Total HDE (Humanitarian Device Exemption): a device for a disease/condition that affects 0 treating or diagnosing 54 3 57 <4,000 individuals 123 10 BIOTRONIK in the US per year. 11 Source: EvaluateMedTech® (18 SEP 2014) 23 2,326 3,085 5,434 Total

Source: (18(18 SEPSEP 2014)2014) Source:EvaluateMedTech® EvaluateMedTech®

Note: Based on Devices@FDA data. PMA (Premarket Approval): a class III device which is a ‘life-sustaining or life-supporting implantable device'; usually require Note: Based on Devices@FDA data. trials. (Premarket Approval): a class III device which is a ‘life-sustaining or life-supporting implantable device'; usually require PMA 510(k): "substantially Note: Based ontrials. Devices@FDA data. equivalent” to a legally marketed Class I, II, III device (where PMA not required). HDE (Humanitarian Devicewhich Exemption): a device for treating or diagnosing disease/condition thattrials. affects <4,000 individuals PMA (Premarket Approval): a class III device istoa a ‘life-sustaining or life-supporting implantable device’; usually 510(k): "substantially equivalent” legally marketed Class I, II, III device a(where PMA notrequire required). in the US per year. 11 HDE (Humanitarian Exemption): for treating or diagnosing a disease/condition that affects <4,000 individuals 510(k): “substantially equivalent” to aDevice legally marketed ClassaI,device II, III device (where PMA not required). in the US per year. 11 HDE (Humanitarian Device Exemption): a device for treating or diagnosing a disease/condition that affects <4,000 individuals in the US per year.

2014 FDA First-Time PMAs and HDEs FDA Approves 20 New PMAs in 2014 to end of August, Representing a 43% Uptick Compared with the Same Point Last Year EvaluateMedTech® found that the FDA has so far approved 20 new PMAs and two HDEs in 2014 to 31st August. This represents a 43% increase compared the 14 new PMAs thatand had HDEs been granted at this point last year. 2014with FDA First-Time PMAs As in 2013, one of the most predominant areas was that of molecular diagnostics. This fast-growing area saw four approvals, representing FDA Approves 20 New PMAs in 2014 to end of August, Representing a 43% Uptick Compared with the Same Point Last Year 20% of the PMAs to date this found year.that Also were20heart valves threein PMAs date in 2014. EvaluateMedTech® thewell FDA represented has so far approved new PMAs andwith two HDEs 2014 to to 31st August. This represents a 43%

2014 FDA First-Time PMAs and HDEs

increase compared with the 14 new PMAs that had been granted at this point last year. As in 2013, one of the most predominant areas was that of molecular diagnostics. This fast-growing area saw four approvals, representing 20% FDA 20 New PMAsAlso in 2014 to end of August, Representing 43% PMAs UpticktoCompared with the Same Point Last Year of theApproves PMAs to date this year. well represented were heart valves withathree date in 2014. EvaluateMedTech® found that the FDA has so far approved2014) 20 new PMAs and two HDEs in 2014 to 31st August. This represents a 43% 2014 FDAFirst-Time First-Time PMAs (to 31st August 2014 FDA (tonew 31st August increase compared withPMAs the 14 PMAs that2014) had been granted at this point last year. As in 2013, one of the mostClassification predominant areas was thatDecision of molecular diagnostics. This fast-growing area saw four approvals, representing 20% EvaluateMedTech® Device of the 1PMAs to date this2 year. AlsoLevel well represented wereDate heart valves with three PMAsCode to date in 2014.Device Name (Approval Code) Level Level 3 Company Product Name Anesthesia & Anesthesia & Other Anesthesia & 2014 FDA First-Time PMAs (to 31st August 2014) Respiratory Respiratory Respiratory Therapeutic EvaluateMedTech® Device Classification Therapeutic Devices Devices Level 1 Level 2 Level 3

Decision Date Company

Anesthesia & Cardiology Respiratory

30 Hypoglossal 24 Apr Jun 14 Inspire Sorin Medical Stimulator, Heart-Valve, Non-Allograft Systems Nerve, Tissue Implanted, Apnea

INSPIRE II UPPER AIRWAY STIMULATOR FREEDOM SOLO STENTLESS HEART VALVE (P130008) (P130011)

16 Jun 14 Edwards Lifesciences 24 Jun 14 Sorin 17 Jan 14 Medtronic

Aortic Valve, Prosthesis, Percutaneously Delivered Heart-Valve, Non-Allograft Aortic Valve, Prosthesis, Tissue Percutaneously Delivered Aortic Valve, Prosthesis, System, Endovascular Graft, Percutaneously Delivered Arteriovenous (Av) Dialysis Aortic Valve, Access CircuitProsthesis, Stenosis Percutaneously Delivered Treatment

EDWARDS SAPIEN XT TRANSCATHETER HEART VALVE AND ACCESSORIES (P130009) FREEDOM SOLO STENTLESS HEART VALVE MEDTRONIC COREVALVE SYSTEM (P130021) (P130011)

Endovascular Graft, System, Hemodynamic, Arteriovenous Implantable (Av) Dialysis Access Circuit Stenosis Treatment Stent, Coronary System, Hemodynamic, Implantable

FLUENCY PLUSHF ENDOVASCULAR STENT CARDIOMEMS PRESSURE MEASUREMENT GRAFT (P130029) SYSTEM (P100045)

Stent, Superficial Femoral Artery Coronary Stent, Digital Breast Tomosynthesis

SUPERA PERIPHERAL STENT SYSTEM (P120020) REBEL PLATINUM CHROMIUM CORONARY STENT SYSTEM MONORAIL AND OVER THE SENOCLAIRE (P130020) WIRE (P130030)

Stent, Femoral HybridSuperficial Cochlear Implant Artery Digital Breast Tomosynthesis Test, Hepatitis B (B Core, Be Antigen, Be Antibody, B Core Igm) Hybrid Cochlear Implant Test, Hepatitis B (B Core, Be Antigen, Be Antibody, B Core Test, Hepatitis B (B Core, Be Igm) Antigen, Be Antibody, B Core Igm) Molecular Erythrocyte Typing Test Test, Hepatitis B (B Core, Be Antigen, Be Antibody, B Core Cytomegalovirus (Cmv) Dna Igm) Quantitative Assay MolecularColorectal Erythrocyte Typing System, Neoplasia, Test Methylation And Dna Hemoglobin Detection Cytomegalovirus (Cmv) Dna Quantitative Assay Somatic Gene Mutation DetectionColorectal System Neoplasia, System, Dna Methylation And Ophthalmic Sealant Hemoglobin Detection

SUPERA SYSTEM NUCLEUSPERIPHERAL HYBRID L24 STENT IMPLANT SYSTEM (P120020) (P130016) SENOCLAIRE (P130020) ADVIA CENTAUR HBSAGII (P110041)

Cardiology Cardiology Cardiology Cardiology Cardiology Cardiology

Anesthesia & Cardiac Prosthetic Respiratory Devices Therapeutic Cardiac Prosthetic Devices Devices Cardiac Prosthetic Cardiac Prosthetic Devices Devices Cardiac Prosthetic Cardiac Prosthetic Devices Devices Cardiac Prosthetic Devices

Other Anesthesia & Tissue Heart Valves Respiratory Therapeutic Devices Transcatheter Heart Valves Tissue Heart Valves Transcatheter Heart Valves Transcatheter Heart Graft Prosthesis Valves Transcatheter Heart Valves

30 Apr 14 Inspire Medical Stimulator, Hypoglossal Systems Nerve, Implanted, Apnea

16 Jun 14 Edwards 17 Jun 14 C. R. Bard Lifesciences 17 Jan 14 Medtronic

Cardiology

Cardiac Prosthetic Graft Prosthesis Cardiovascular ECG Monitoring Devices & Monitoring Diagnostic Devices

17 May Jun 14 C. R. Bard 28 14 St. Jude Medical

Cardiology Cardiology

Interventional Cardiovascular Cardiology Monitoring & Diagnostic Devices Interventional

Non-Drug-Eluting ECG Monitoring Coronary Stents

27 Jun 14 Boston 28 May 14 Scientific St. Jude Medical

Cardiology Interventional Cardiology Computed Tomography (CT) Interventional Ear Devices Cardiology Computed Immunoassays Tomography (CT) Ear Devices Immunoassays Immunoassays

Peripheral Vascular Devices Non-Drug-Eluting Coronary Stents Other Computed Tomography (CT) Peripheral Vascular Hearing Implants Devices Other Computed Viral Immunoassays Tomography (CT) Hearing Implants Viral Immunoassays Viral Immunoassays

28 Mar 14 Abbott Laboratories 27 Jun 14 Boston 26 Aug 14 Scientific General Electric 28 20 Mar 14 Abbott Cochlear Laboratories 26 May Aug 14 General 16 Siemens Electric 20 Mar 14 Cochlear 14 Mar 14 Roche 16 May 14 Siemens

Molecular Diagnostics Immunoassays Molecular Diagnostics Molecular Diagnostics Molecular Diagnostics Molecular Diagnostics Molecular Diagnostics Surgical Ophthalmic Devices Molecular Orthobiologics Diagnostics Ophthalmic Surgical Orthobiologics Devices Orthobiologics Spinal Devices

Hematology Molecular Diagnostics Viral Immunoassays Infectious Disease Molecular Diagnostics Hematology Molecular Oncology Molecular Diagnostics Infectious Disease Molecular Molecular Diagnostics Oncology Diagnostics Oncology Molecular Diagnostics Other Ophthalmic Surgical Devices Oncology Molecular Viscosupplementation Diagnostics Other Ophthalmic Viscosupplementation Surgical Devices Viscosupplementation Artificial Discs

21 May 14 Immucor 14 Mar 14 Roche 02 Jun 14 QIAGEN

Cardiology Cardiology Diagnostic Imaging Cardiology Ear, Nose & Throat (ENT) Diagnostic Imaging In Vitro Diagnostics (IVD) Ear, Nose & Throat (ENT) In Vitro Diagnostics (IVD) In Vitro Diagnostics (IVD) In Vitro Diagnostics (IVD) In Vitro Diagnostics (IVD) In Vitro Diagnostics (IVD) In Vitro Diagnostics (IVD) In Vitro Diagnostics (IVD) In Vitro Diagnostics (IVD) In Vitro Diagnostics (IVD) Ophthalmics

Product Code Name

21 Immucor 11 May Aug 14 EXACT Sciences 02 Jun 14 QIAGEN 23 May 14 QIAGEN 11 Aug 14 EXACT 08 Jan 14 Sciences Ocular Therapeutix In Vitro Diagnostics 23 Somatic Gene Mutation Orthopedics 09 May 14 QIAGEN IBSA Institut Acid, Hyaluronic, Intraarticular (IVD) Detection System Biochimique Ophthalmics 08 Feb Jan 14 Ocular Ophthalmic Sealant Orthopedics 25 Anika Acid, Hyaluronic, Intraarticular Therapeutix Therapeutics 09 14 Medtronic IBSA Institut Acid, Hyaluronic, Intraarticular Orthopedics 24May Jul 14 Prosthesis, Intervertebral Disc Biochimique 2014 FDA Humanitarian Device Exemptions (HDEs) 25 (toFeb 31st 2014)Acid, Hyaluronic, Intraarticular Orthopedics Orthobiologics Viscosupplementation 14 August Anika EvaluateMedTech® Device Classification Decision Therapeutics Orthopedics Spinal Artificial 24Date Jul 14 Medtronic Prosthesis, Intervertebral Level 1 Level Devices 2 Level 3Discs Company Product Code Name Disc

2014 FDA Humanitarian Device Exemptions (to 31st August 2014) Anesthesia & Respiratory Other Respiratory 12 Aug (HDEs) 14 Xvivo Perfusion Normothermic Preservation

2014 FDA Humanitarian Device Exemptions (HDEs) (to 31st August 2014)System For Transplantation Respiratory Therapeutic Therapeutic Devices EvaluateMedTech® Device Classification Devices Level 1 Level 2 Level 3

Decision Date Company

Anesthesia Neurology & Respiratory

12 14 Xvivo Perfusion Normothermic Preservation 25Aug Jul 14 Terumo Device, Neurovascular System For Transplantation Embolization Of Initially Unacceptable Donor Lungs

Respiratory Neurology Therapeutic Devices

Other Respiratory Neurovascular Devices Therapeutic Devices

Source: EvaluateMedTech® (18 SEP 2014)

Of Initially Unacceptable Donor Lungs Product Code Name

INSPIRE II UPPER AIRWAY STIMULATOR (P130008)

Device Name (Approval Code)

EDWARDS SAPIEN XT TRANSCATHETER FLUENCY PLUS ENDOVASCULAR STENT HEART VALVE AND ACCESSORIES (P130009) GRAFT (P130029) MEDTRONIC COREVALVE SYSTEM (P130021)

REBEL PLATINUM CHROMIUM CORONARY CARDIOMEMS HFMONORAIL PRESSURE MEASUREMENT STENT SYSTEM AND OVER THE SYSTEM (P100045) WIRE (P130030)

NUCLEUS HYBRID L24 IMPLANT SYSTEM (P130016) ELECSYS® HBEAG IMMUNOASSAY AND ELECSYS® PRECICONTROL HBEAG (P130015) ADVIA CENTAUR HBSAGII (P110041) IMMUCOR PRECISETYPE™ (BP130026) ELECSYS® HBEAG IMMUNOASSAY AND ELECSYS® HBEAG (P130015) ARTUS CMVPRECICONTROL RGQ MDX KIT (P130027) IMMUCOR PRECISETYPE™ (BP130026) COLOGUARD (P130017) ARTUS CMV RGQ MDX KIT (P130027) THERASCREEN KRAS RGQ PCR KIT (P110027) COLOGUARD (P130017) RESURE SEALANT (P130004) THERASCREEN KRAS RGQ PCR KIT0.8%) (P110027) SINOVIAL (SODIUM HYALURONATE (P110005) RESURE SEALANT (P130004) MONOVISC (P090031) SINOVIAL HYALURONATE 0.8%) PRESTIGE(SODIUM LP CERVICAL DISC (P090029) (P110005) MONOVISC (P090031) PRESTIGE LP CERVICAL (P090029) Device Name (ApprovalDISC Code) XVIVO PERFUSION SYSTEM (XPS™) WITH STEEN SOLUTION™ PERFUSATE (H120003)

Device Name (Approval Code) XVIVO PERFUSION SYSTEMINTRALUMINAL (XPS™) WITH LOW-PROFILE VISUALIZED STEEN SOLUTION™ PERFUSATE SUPPORT DEVICE (LVIS AND LVIS(H120003) JR.) (H130005)

Note: Based on Devices@FDA data to 31st August Neurology Neurology Neurovascular Devices2014. 25 Jul 14 Terumo Device, Neurovascular LOW-PROFILE VISUALIZED INTRALUMINAL PMA (Premarket Approval): usually require Therapeutic a class III device which is a ‘life-sustaining or life-supporting Embolization implantable device'; SUPPORT DEVICE (LVIS AND LVIS JR.) trials. Devices (H130005) Source: EvaluateMedTech® SEP 2014) a device for treating or diagnosing a disease/condition that affects <4,000 individuals HDE (Humanitarian Device(18 Exemption): in the US per year. Source: EvaluateMedTech® (18toSEP Note: Based on Devices@FDA data 31st2014) August 2014. PMA (Premarket Approval): a class III device which is a ‘life-sustaining or life-supporting implantable device'; usually require trials. HDE (Humanitarian Device Exemption): a device for treating or diagnosing a disease/condition that affects <4,000 individuals in the US per year.

Note: Based on Devices@FDA data to 31st August 2014.

PMA (Premarket Approval): a class III device which is a ‘life-sustaining or life-supporting implantable device’; usually require trials. 12

HDE (Humanitarian Device Exemption): a device for treating or diagnosing a disease/condition that affects <4,000 individuals in the US per year. 12

In Vitro Diagnostics (IVD) Market to 2020 InVitro VitroDiagnostics Diagnostics(IVD) (IVD)Market Marketto to2020 2020 In Roche Maintains Leading Position within In Vitrowithin Diagnostics Roche Maintains Leading Position In VitroMarket Diagnostics Market Roche Maintains Leading Position within In Vitro Diagnostics Market EvaluateMedTech® consensus forecast finds that Roche is expected to remain the dominant force in thespace in EvaluateMedTech® consensus forecast finds that Roche is expected to remain the dominant force indominant the in vitro diagnostic to 2020. EvaluateMedTech® consensus forecast finds that Roche is expected to remain the force in the in vitro diagnostic space atomassive 2020. The company isshare forecast to command a expected massive 17.0% market share in 2020, The company is forecast to command 17.0% market in 2020, with sales to reach $12.2bn. vitro diagnostic space to 2020. The company is forecast to command a massive 17.0% market share in 2020, with sales expected to reach $12.2bn. with salesSysmex expected to reach to $12.2bn. The Japanese company is predicted be the fastest growing company this field with sales expected to grow The Japanese company Sysmex is predicted to be the fastest in growing company in this field with salesby 11% per year The2013 Japanese company Sysmex predicted tojumping be the fastest growing company in this fieldinwith sales (CAGR) between and This results in is the company threeand places in the rankings 2020. expected to 2020. grow by 11% per year (CAGR) between 2013 2020. This results to in sixth the company jumping expected to grow by 11% per year (CAGR) between 2013 and 2020. This results in the company jumping three places in the rankings to sixth in 2020. three places in the rankings to sixth in 2020.

WW Market WW Share Market%Share in 2020 % WW Market WW Share Market%Share in 2020 %

WW In Vitro Diagnostics Sales, Market Share & Sales Growth (2013-20) WW In Vitro Diagnostics Sales, Market Share & Sales Growth (2013-20) Source: EvaluateMedTech® (18 SEP 2014) Source: EvaluateMedTech® (18 SEP 2014) 140% 25% 140% 25%

Novo: Solid growth in its core insulin Novo: Solidincluding growth inTresiba its core(insulin insulin franchise, franchise, including Tresiba (insulin degludec), and GLP-1 Victoza degludec), and GLP-1 Victoza

120% 120% 20% 20% 100% 100%

Roche Roche

15% 15% 80% 80%

60% 60% 10% 10%

Takeda: Actos generic Takeda: Actos generic 2012. competition expected competition expected 2012.

Siemens Siemens

40% 40%

Thermo Fisher Thermo Fisher Scientific Scientific

5% 5% 20% 20%

0% 0% 0% 0%+3% 0 0 +3%

Abbott Abbott Laboratories Laboratories

Danaher Danaher

Merck: Strong growth in Merck: growth in DPP-IVStrong inhibitor franchise DPP-IV inhibitor franchise

0.2 0.2

+4% 0.4 +4% 0.4

0.6 0.6

+5% +5%

0.8 0.8

Note: Bubble = WW Sales Sales in in2020 2018 Note: Bubble = WW Sales Sales in in2020 2018

1 +6% 1 +6%

1.2 1.2

1.4 +7% 1.4 +7%

% Sales Growth: 2011-18 % Sales Growth: CAGRCAGR 2013-20 % Sales Growth: 2011-18 % Sales Growth: CAGRCAGR 2013-20

WW In Vitro Diagnostics Sales: Top 10 Companies & Total Market (2013/20) WW In In Vitro Vitro Diagnostics DiagnosticsSales: Sales:Top Top10 10Companies Companies&&Total TotalMarket Market(2013/20) (2013/20) WW Rank Company Rank Company 1 Roche 1 Roche 2 Siemens 2 Siemens 3 Danaher 3 Danaher 4 Abbott Laboratories 4 Abbott Laboratories 5 Thermo Fisher Scientific 5 Thermo Fisher Scientific 6 Sysmex 6 Sysmex 7 Becton Dickinson 7 Becton Dickinson 8 Alere 8 Alere 9 bioMérieux 9 bioMérieux 10 Werfen Group 10 Werfen Group Top 10 Top 10 Other Other Total Industry Total Industry

WW Sales ($m) WW Sales ($m) 2013 2020 2013 2020

8,654 8,654 5,173 5,173 4,882 4,882 4,545 4,545 2,993 2,993 1,796 1,796 2,646 2,646 2,243 2,243 1,662 1,662 1,472 1,472 36,066 36,066 11,329 11,329 47,394 47,394

12,205 12,205 6,889 6,889 6,821 6,821 6,799 6,799 4,046 4,046 3,782 3,782 3,399 3,399 2,832 2,832 2,519 2,519 2,278 2,278 51,570 51,570 20,071 20,071 71,640 71,640

CAGR CAGR 2013-20 2013-20 +5% +5% +4% +4% +5% +5% +6% +6% +4% +4% +11% +11% +4% +4% +3% +3% +6% +6% +6% +6% +5% +5% +9% +9% +6.1% +6.1%

WW Market Share WW Market Share 2013 2020 2013 2020

18.3% 18.3% 10.9% 10.9% 10.3% 10.3% 9.6% 9.6% 6.3% 6.3% 3.8% 3.8% 5.6% 5.6% 4.7% 4.7% 3.5% 3.5% 3.1% 3.1% 76.1% 76.1% 23.9% 23.9% 100.0% 100.0%

17.0% 17.0% 9.6% 9.6% 9.5% 9.5% 9.5% 9.5% 5.6% 5.6% 5.3% 5.3% 4.7% 4.7% 4.0% 4.0% 3.5% 3.5% 3.2% 3.2% 72.0% 72.0% 28.0% 28.0% 100.0% 100.0%

Rank Chg. Rank Chg. 2013-20 2013-20 -

+3 +3 -1 -1 -1 -1 +1 +1 +1 +1

Source: EvaluateMedTech® (18 SEP 2014); Consensus sales from equity analysts' reports

Source:EvaluateMedTech® EvaluateMedTech® (18 2014); SEP 2014); Consensus sales from equity analysts' Source: (18 SEP Consensus sales from equity analysts’ reports reports Note: Excludes Glucose Test Systems which are included in Diabetic Care classification. Note: Excludes Glucose Test Systems which are included in Diabetic Care classification. Note: Excludes Glucose Test Systems which are included in Diabetic Care classification.

13 13

Cardiology Market to 2020 Medtronic Set to Solidify Number One Position in Cardiology through Acquisition of Covidien EvaluateMedTech® consensus forecast finds that Medtronic will remain the world’s number one cardiology company with global sales of $11.1bn in 2020. This dominance is set to be further entrenched following completion of the proposed $42.9bn acquisition of Covidien. With sales of $1.5bn forecast in 2020, Covidien sits just outside the top 10 cardiology companies at number 11. Together the companies are forecast to achieve sales of $12.6bn in 2020, representing 22.0% market share.

WW Cardiology Sales: Top 10 Companies & Total Market (2013/20)

Source: EvaluateMedTech® (18 SEP 2014); Consensus sales from equity analysts’ reports

Note: General Electric & Philips do not disclose cardiology sales. Medtronic does not include revenues from proposed acquisition of Covidien.

Diagnostic Imaging Market to 2020 Siemens Extends Leading Position in Diagnostic Imaging in 2020 Diagnostic Imaging Market to 2020

Diagnostic Imaging Market to 2020

EvaluateMedTech® consensus forecast finds that Siemens is forecast to extend its position as the world’s leading diagnostic imaging company in 2020. TheExtends companyLeading is expected to generate $14.2bn of salesinin2020 2020 representing a market share of 30.1%, an increase Siemens Position in Diagnostic Diagnostic Imaging Position in Imaging in 2020 from 29.7% Siemens in 2013. Extends Leading EvaluateMedTech® consensus forecast finds that Siemens is forecast to extend its position as the world's leading EvaluateMedTech® consensus forecast finds that Siemens is forecast to extend its position as the world's leading

diagnostic imaging imaging company company inset 2020. The company company is expected expected to generate generate $14.2bn of sales sales in in 2020 2020 representing representing aa Overall, the diagnostic imaging market isin to grow at 4.1% per year (CAGR) to $47.0bn in 2020. diagnostic 2020. The is to $14.2bn of market share share of of 30.1%, 30.1%, an an increase increase from from 29.7% 29.7% in in 2013. 2013. market Overall, the the diagnostic diagnostic imaging imaging market market is is set set to to grow grow at at 4.1% 4.1% per per year year (CAGR) (CAGR) to to $47.0bn $47.0bn in in 2020. 2020. Overall,

WW WWMarket MarketShare Share%%inin2020 2020

WW Diagnostic Diagnostic Imaging Imaging Sales, Sales, Market Market Share Share & & Sales Sales Growth Growth (2013-20) (2013-20) WW Source: EvaluateMedTech® EvaluateMedTech® (18 (18 SEP SEP 2014) 2014) Source: 40% 40% 35% 35% Siemens Siemens

30% 30% 25% 25% General General Electric Electric

20% 20% 15% 15%

Philips Philips

Toshiba Toshiba

10% 10% 5% 5%

Carestream Carestream Health Health

0% 0% +2% +2%

+3% +3%

+4% +4%

+5% +5%

+6% +6%

% Sales Sales Growth: Growth: CAGR CAGR 2013-20 2013-20 %

Note: Bubble Bubble == WW WW Sales Sales in in 2020 2020 Note:

WW Diagnostic Imaging Sales: Top 10 Companies & Total Market (2013/20)

WW Diagnostic Companies & Total Market (2013/20) WW DiagnosticImaging ImagingSales: Sales:Top Top1010 Companies & Total Market (2013/20) Rank Company Company Rank 1 Siemens 1 Siemens General Electric Electric 22 General Philips 33 Philips Toshiba 44 Toshiba Carestream Health Health 55 Carestream Hitachi Medical Medical 66 Hitachi Konica Minolta Minolta 77 Konica Agfa-Gevaert 88 Agfa-Gevaert Varian Medical Medical Systems Systems 99 Varian 10 Hologic Hologic 10 Top 10 10 Top Other Other Total Industry Industry Total

WW Sales Sales ($m) ($m) WW 2013 2020 2013 2020

10,539 10,539 8,372 8,372 4,706 4,706 4,102 4,102 1,539 1,539 1,179 1,179 823 823 909 909 546 546 421 421 33,137 33,137 2,335 2,335 35,472 35,472

14,164 14,164 10,294 10,294 5,779 5,779 5,717 5,717 2,054 2,054 1,359 1,359 1,043 1,043 1,033 1,033 984 984 783 783 43,210 43,210 3,770 3,770 46,980 46,980

CAGR CAGR 2013-20 2013-20 +4% +4% +3% +3% +3% +3% +5% +5% +4% +4% +2% +2% +3% +3% +2% +2% +9% +9% +9% +9% +4% +4% +7% +7% +4.1% +4.1%

WW Market Market Share Share WW 2013 2020 2013 2020

29.7% 29.7% 23.6% 23.6% 13.3% 13.3% 11.6% 11.6% 4.3% 4.3% 3.3% 3.3% 2.3% 2.3% 2.6% 2.6% 1.5% 1.5% 1.2% 1.2% 93.4% 93.4% 6.6% 6.6% 100.0% 100.0%

Source: EvaluateMedTech® EvaluateMedTech® (18 (18 SEP SEP 2014); 2014); Consensus Consensus sales sales from from equity equity analysts' analysts' reports reports Source: Source: EvaluateMedTech® (18 SEP 2014); Consensus sales from equity analysts’ reports

30.1% 30.1% 21.9% 21.9% 12.3% 12.3% 12.2% 12.2% 4.4% 4.4% 2.9% 2.9% 2.2% 2.2% 2.2% 2.2% 2.1% 2.1% 1.7% 1.7% 92.0% 92.0% 8.0% 8.0% 100.0% 100.0%

Rank Chg. Chg. Rank 2013-20 2013-20 +1 +1 -1 -1 +1 +1 +1 +1

Note: Segment Segment sales sales include include servicing servicing of of equipment. equipment. FUJIFILM's FUJIFILM's Diagnostic Diagnostic Imaging Imaging sales sales are are not not available. available. Note:

Note: Segment sales include servicing of equipment. FUJIFILM’s Diagnostic Imaging sales are not available.

15 15

Orthopedics Market to 2020 Johnson & Johnson Continues to Market Lead the Orthopedics Orthopedics to 2020 Market

Orthopedics Market to 2020

EvaluateMedTech® consensus forecast finds that Johnson & Johnson continues to lead the pack in orthopedics, with sales expected to reach $11.3bn - representing market share - in Johnsona&24.7% Johnson Continues to2020. Lead the Orthopedics Market Johnson & Johnson Continues to Lead the Orthopedics Market However, following the completionconsensus of its pending $13.4bn of &Biomet, Zimmer will close inthe on pack the leader and is forecast to EvaluateMedTech® forecast finds acquisition that Johnson Johnson continues to lead in orthopedics, EvaluateMedTech® consensus forecast finds that Johnson & Johnson continues to lead the pack in orthopedics, with sales expected to reach $11.3bn - representing a 24.7% market share in 2020. leapfrog Stryker to sales take second place in the$11.3bn rankings with combined revenue forecast to--reach $9.5bn in 2020, giving it a 20.8% market with expected to reach - representing a 24.7% market share in 2020. However, following the completion of its pending $13.4bn acquisition of Biomet, Zimmer will close in on the leader share. However, following the completion of its pending $13.4bn acquisition of Biomet, Zimmer will close in on the leader and is forecast to leapfrog Stryker to take second place in the rankings with combined revenue forecast to reach is forecast to leapfrog Stryker to second place in the rankings combined revenue reach Of the top 20 and companies, Medtronic to take haveshare. the lowest growth rate, withwith sales expected to growforecast by just to 1% per year (CAGR) $9.5bn in 2020, giving itisaforecast 20.8% market in 2020, giving a 20.8% market share. between 2013$9.5bn and owing to itsit struggling business. Of the2020 top 20 companies, MedtronicBMP is forecast to have the lowest growth rate, with sales expected to grow by just Of the top 20 companies, Medtronic is forecast to have the lowest growth rate, with sales expected to grow by just 1% per year (CAGR) between 2013 and 2020 owing to its struggling BMP business. 1% per year (CAGR) between 2013 and 2020 owing to its struggling BMP business.

WW WWMarket MarketShare Share%%inin2020 2020

WW Orthopedics Sales, Market Share & Sales Growth (2013-20) WW Orthopedics Sales, Market Share & Sales Growth (2013-20) Source: EvaluateMedTech® (18 SEP 2014) Source: EvaluateMedTech® (18 SEP 2014) 35% 35% 30% 30% Johnson & Johnson & Johnson Johnson

25% 25% 20% 20% Medtronic: Slow growth due to Medtronic: Slow growth decline in revenues from due BMPto decline in revenues from BMP business business

15% 15%

Stryker Stryker Zimmer Zimmer

10% 10%

Biomet Biomet

Medtronic Medtronic

5% 5% 0% 0% +0% +0%

+1% +1%

+2% +2%

+3% +3%

+4% +4%

+5% +5%

+6% +6%

+7% +7%

% Sales Growth: CAGR 2013-20 % Sales Growth: CAGR 2013-20

Note:Bubble Bubble =WW WW Sales in 2018 Note: Sales in 2020 Note: Bubble===WW WW Sales in 2018 Note: Bubble Sales in 2020

WW Orthopedics Sales: Top 10 Companies & Total Market (2013/20) WW Orthopedics Orthopedics Sales: (2013/20) WW Sales:Top Top 10 10Companies Companies&&Total TotalMarket Market (2013/20) Rank Company Rank Company 1 Johnson & Johnson 1 Johnson & Johnson 2 Stryker 2 Stryker 3 Zimmer 3 Zimmer 4 Biomet 4 Biomet 5 Medtronic 5 Medtronic 6 Arthrex 6 Arthrex 7 Smith & Nephew 7 Smith & Nephew 8 NuVasive 8 NuVasive 9 Globus Medical 9 Globus Medical 10 Wright Medical Group 10 Wright Medical Group Top 10 Top 10 Other Other Total Industry Total Industry

WW Sales ($m) WW Sales ($m) 2013 2020 2013 2020

8,948 8,948 5,228 5,228 4,384 4,384 2,964 2,964 3,041 3,041 1,550 1,550 2,004 2,004 646 646 434 434 474 474 29,674 29,674 4,146 4,146 33,820 33,820

11,345 11,345 7,436 7,436 5,599 5,599 3,941 3,941 3,224 3,224 2,912 2,912 2,582 2,582 1,019 1,019 778 778 600 600 39,434 39,434 6,487 6,487 45,920 45,920

CAGR CAGR 2013-20 2013-20 +3% +3% +5% +5% +4% +4% +4% +4% +1% +1% +9% +9% +4% +4% +7% +7% +9% +9% +3% +3% +4% +4% +7% +7% +4.5% +4.5%

WW Market Share WW Market Share 2013 2020 2013 2020

26.5% 26.5% 15.5% 15.5% 13.0% 13.0% 8.8% 8.8% 9.0% 9.0% 4.6% 4.6% 5.9% 5.9% 1.9% 1.9% 1.3% 1.3% 1.4% 1.4% 87.7% 87.7% 12.3% 12.3% 100.0% 100.0%

24.7% 24.7% 16.2% 16.2% 12.2% 12.2% 8.6% 8.6% 7.0% 7.0% 6.3% 6.3% 5.6% 5.6% 2.2% 2.2% 1.7% 1.7% 1.3% 1.3% 85.9% 85.9% 14.1% 14.1% 100.0% 100.0%

Rank Chg. Rank Chg. 2013-20 2013-20 +1 +1 -1 -1 +1 +1 -1 -1 +2 +2 -

Source: EvaluateMedTech® (18 SEP 2014); Consensus sales from equity analysts' reports

Source:EvaluateMedTech® EvaluateMedTech® 2014); Consensus analysts' reports Source: (18(18 SEPSEP 2014); Consensus salessales from from equityequity analysts’ reports Note: Zimmer does not include revenues from proposed acquisition of Biomet. Note: Zimmer does not include revenues from proposed acquisition of Biomet.

Note: Zimmer does not include revenues from proposed acquisition of Biomet.

16 16

Ophthalmics Market to 2020 Ophthalmics Market to 2020

Essilor to Replace Novartis as Top Market Ophthalmics Ophthalmics toCompany 2020 by 2020 EvaluateMedTech® consensus forecast finds as that Essilor, the FrenchCompany maker of by optical Essilor to Replace Novartis Top Ophthalmics 2020lenses, is expected to become the leading ophthalmics Essilor toare Replace Novartis Top Ophthalmics Company by 2020 company in 2020. Sales forecast to reachas$10.4bn on thethat back of strong growth ofoptical 8% (CAGR) 2013toand 2020. EvaluateMedTech® consensus forecast finds Essilor, the annual French maker of lenses,between is expected EvaluateMedTech® finds that Essilor, the French of optical lenses, expected to become the leading consensus ophthalmicsforecast company in 2020. Sales are forecastmaker to reach $10.4bn on theisback of strong Valeant Pharmaceuticals moves into the top 5 following its acquisition of Bausch + Lomb in August 2013, with sales forecast to reach almost become the leading ophthalmics company in 2020. Sales are forecast to reach $10.4bn on the back of strong annual growth of 8% (CAGR) between 2013 and 2020. $3bn in 2020.annual growth of 8% (CAGR) between 2013 and 2020. Valeant Pharmaceuticals moves into the top 5 following its acquisition of Bausch + Lomb in August 2013, with Valeant Pharmaceuticals moves$3bn into in the2020. top 5 following its acquisition of Bausch + Lomb in August 2013, with sales forecast to reach almost sales forecast to reach almost $3bn in 2020.

WW Market %% WW Market Share %Share in 2020 WW Market Share WW Market Share % in 2020

WW Ophthalmics Sales, Market Share & Sales Growth (2013-20) WW Ophthalmics Sales, Market Share & Sales Growth (2013-20) Source: EvaluateMedTech® (18 SEP 2014) Source: EvaluateMedTech® (18 SEP 2014) 35% 140% 35% 140%

Novo: Solid growth in its core insulin Novo: Solidincluding growth in its core(insulin insulin franchise, Tresiba franchise, Tresiba (insulin degludec),including and GLP-1 Victoza degludec), and GLP-1 Victoza

30% 120% 30% 120% 25% 100% 25% 100%

Essilor Essilor Novartis Novartis Valeant: Entered the Valeant: Entered thein 2013 Ophthalmics space Ophthalmics space inof2013 following acquisition Bausch following acquisition of Bausch + Lomb + Lomb

20% 80% 20% 80% 15% 60% 15% 60% 10% 40% 10% 40%

Takeda: Actos generic Takeda: Actos generic2012. competition expected competition expected 2012.

Johnson & Johnson & Johnson Johnson

HOYA HOYA

Valeant Valeant

5% 20% 5% 20%

Merck: Strong growth in Merck: growth in DPP-IVStrong inhibitor franchise DPP-IV inhibitor franchise

0% 0% 0% 0%+0% 0 0.2 +5% 0.4 +0% 0 0.2 +5% 0.4 Note: Sales in 2020 Note:Bubble Bubble= =WW WW Sales in 2018 Note: Bubble Sales in 2020 Note: Bubble= =WW WW Sales in 2018

+10%0.6 +10%0.6

+15% 0.8 +15% 0.8

1 1

+20% 1.2 +20% 1.2

+25% 1.4 +25% 1.4

% Sales CAGRCAGR 2013-20 % Growth: Sales Growth: 2011-18 % Sales CAGRCAGR 2013-20 % Growth: Sales Growth: 2011-18

WW Ophthalmics Sales: Top 10 Companies & Total Market (2013/20) WW Ophthalmics Ophthalmics Sales: Top 10 Companies & Total WW Total Market Market(2013/20) (2013/20) Rank Company Rank Company 1 Essilor International 1 Essilor International 2 Novartis 2 Novartis 3 Johnson & Johnson 3 Johnson & Johnson 4 HOYA 4 HOYA 5 Valeant Pharmaceuticals 5 Valeant Pharmaceuticals 6 The Cooper Companies 6 The Cooper Companies 7 Carl Zeiss 7 Carl Zeiss 8 Abbott Laboratories 8 Abbott Laboratories 9 TOPCON 9 TOPCON 10 NIDEK 10 NIDEK Top 10 Top 10 Other Other Total Industry Total Industry

WW Sales ($m) WW Sales ($m) 2013 2020 2013 2020

5,985 5,985 6,388 6,388 2,937 2,937 2,032 2,032 812 812 1,268 1,268 1,776 1,776 1,142 1,142 387 387 334 334 23,060 23,060 1,437 1,437 24,497 24,497

10,368 10,368 9,015 9,015 3,626 3,626 3,108 3,108 2,987 2,987 2,738 2,738 2,290 2,290 1,810 1,810 646 646 481 481 37,070 37,070 592 592 37,662 37,662

CAGR CAGR 2013-20 2013-20 +8% +8% +5% +5% +3% +3% +6% +6% +20% +20% +12% +12% +4% +4% +7% +7% +8% +8% +5% +5% +7% +7%

+6.3% +6.3%

WW Market Share WW Market Share 2013 2020 2013 2020

24.4% 24.4% 26.1% 26.1% 12.0% 12.0% 8.3% 8.3% 3.3% 3.3% 5.2% 5.2% 7.2% 7.2% 4.7% 4.7% 1.6% 1.6% 1.4% 1.4% 94.1% 94.1% 5.9% 5.9% 100.0% 100.0%

27.5% 27.5% 23.9% 23.9% 9.6% 9.6% 8.3% 8.3% 7.9% 7.9% 7.3% 7.3% 6.1% 6.1% 4.8% 4.8% 1.7% 1.7% 1.3% 1.3% 98.4% 98.4% 1.6% 1.6% 100.0% 100.0%

Rank Chg. Rank Chg. 2013-20 2013-20 +1 +1 -1 -1 +4 +4 -2 -2 -1 -1 +1 +1 +1 +1

Source: EvaluateMedTech® (18 SEP 2014); Consensus sales from equity analysts' reports

Source:EvaluateMedTech® EvaluateMedTech® 2014); Consensus salesequity from equity analysts' Source: (18(18 SEPSEP 2014); Consensus sales from analysts’ reportsreports

Note: Valeant's 2013 ophthalmic revenues only include the Bausch + Lomb business from the date of the Note: Valeant's 2013 ophthalmic only include theforBausch + Lomb company business is from the date of 7% the closing of the acquisition (6 AUG revenues 2013). Proforma CAGR the combined forecast to be closing of 2013 the acquisition between and 2020.(6 AUG 2013). Proforma CAGR for the combined company is forecast to be 7% between 2013 and 2020. Note: Valeant’s 2013 ophthalmic revenues only include the Bausch + Lomb business from the date of the closing of the acquisition (6 AUG 2013). Proforma CAGR for the combined company is forecast to be 7% between 2013 and 2020.

17 17

M&A Analysis: 2009 to H1 2014 M&A Deal Value Jumps by a Massive 363% in H1 2014, though Deal Count Falls by 10%

M&A Analysis: 2009 to H1 2014

70 80 70 60 70 60 50 60 50 40 50 40 30 40 30 20 30 20 10 20 10 0 10 0 0

2009 270 AM Optics [ABT] $2.8bn 2009 AM Optics [ABT] $2.8bn 2009 178 AM Optics [ABT] $2.8bn

178 178

$13bn $13bn 2009 $13bn 2009 2009

263

241

263

241 241

207 207 207

Target [Acquiror] Deal Value H1 2014 Life Tech. Target[Thermo-Fisher] [Acquiror] Deal $13.6bn Value H1[P. 2014 Ortho-Clinical Equity] $4.2bn Life Tech. [Thermo-Fisher] Transitions Optical [Essilor]$13.6bn $1.9bn H1[P. 2014 Ortho-Clinical Equity] $4.2bn NVS Blood Diag. [Grifols] $1.7bn Life Tech. [Thermo-Fisher] $13.6bn Transitions Optical [Essilor] $1.9bn ArthroCare [S&N] $1.5bn Ortho-Clinical [P. [Grifols] Equity] $4.2bn NVS Blood Diag. $1.7bn Transitions Optical [Essilor] ArthroCare [S&N] $1.5bn H1 2014 vs. $1.9bn NVS Blood Diag.H1 [Grifols] 2013 $1.7bn ArthroCareH1 [S&N] 2014$1.5bn vs. H1 2013 106 H1 2014 vs. H1 2013 95

2010 Alcon* [NVS] $28bn 2012 2010$2.6bn ev3 [COV] Synthes [JNJ] $19.7bn Alcon* [NVS] $28bn Gen-Probe2012 [HOL] $3.7bn 2010$2.6bn ev3 [COV] Synthes [JNJ] $19.7bn Alcon* [NVS] $28bn Gen-Probe2012 [HOL] $3.7bn 106 ev3 [COV] $2.6bn 2011 Synthes [JNJ] $19.7bn 2013 Genzyme* [SAN]:Gen-Probe $20.1bn [HOL] $3.7bn B&L [Valeant] $8.7bn 106 2011 $9.6bn 2013 $3.9bn Alcon* [NVS] Gambro [Baxter] Genzyme* B&L [Valeant] Beckman C[SAN]: [DHR]$20.1bn $6.8bn MAKO [Stryker]$8.7bn $1.7bn 2011 $9.6bn 2013 Alcon* [NVS] Gambro [Baxter] Conceptus [Bayer]$3.9bn $1.1bn Kinetic C [P. Equity] $6.1bn Genzyme* B&L [Valeant] Beckman C[SAN]: [DHR]$20.1bn $6.8bn MAKO [Stryker]$8.7bn $1.7bn Alcon* [NVS] $9.6bn Gambro [Baxter] Conceptus [Bayer]$3.9bn $1.1bn Kinetic C [P. Equity] $6.1bn C [DHR] $6.8bn $46bn MAKO $28bn [Stryker] $1.7bn $7bn $51bn Beckman$78bn Conceptus [Bayer] $1.1bn Kinetic C [P. Equity] $6.1bn

95 95

300 250 250 250 200 200 200 150 150 150 100

DealDeal Count Deal Count Count

DealDeal Value Deal Value ($bn) Value ($bn) ($bn)

EvaluateMedTech® found that total medtech M&A deal values came to $30bn in H1 2014, an increase of 363% on the $7bn in H1 2013. M&A Analysis: 2009 to H1 2014 M&A in Deal Value by a Massive H1 2014, Despite the growth deal value,Jumps the number of overall363% dealsinactually fell though by 10%Deal to 95Count in H1 Falls 2014.by 10% EvaluateMedTech® found2009 that totalto medtech M&A deal values came to $30bn in H1 2014, an increase of 363% on M&A Analysis: H1 2014 M&A Deal Value Jumps by a Massive 363% in H1 2014, though Deal Count Falls by by 10% This massive hike in H1 2014 vs H1 2013 was largely due to the major acquisitions of Life Technologies Thermo-Fisher and the $7bn in H1 2013. Despite the growth in deal value, the number of overall deals actually fell by 10% to 95for in $13.6bn, H1 EvaluateMedTech® found thatCarlyle total medtech M&A deal values came to $30bn in H1 2014, an increase of 363% on J&J’s Ortho-Clinical Diagnostics unit by The Group for $4.2bn. 2014. M&A Deal Value Jumps by a Massive 363% in H1 2014, though Deal Count Falls by 10% the in H1hike 2013. Despite theH1 growth inwas deallargely value, the to number of overall deals actually fell by 10% toby 95 in H1 This$7bn massive inand H1 2014 2013 the major of2014, Life Technologies EvaluateMedTech® found thatvs total medtech M&A dealdue values came to acquisitions $30bn in H1 an increase of 363% on and The ongoing Medtronic/Covidien Zimmer/Biomet megamergers, though, will dwarf these earlier acquisitions. Worth $42.9bn 2014. Thermo-Fisher for $13.6bn, and J&J's Ortho-Clinical Diagnostics unit by The deals Carlyleactually Group fell for by $4.2bn. the $7bn in H1 2013. Despite the growth in deal value, the number of overall 10% to 95 in H1 This ongoing massive hike H1 change 2014 vsthe H1 2013 dueindustry. to the major acquisitions of Life Technologies by $13.4bn, respectively, theseMedtronic/Covidien dealsinwill face ofwas the largely medtech The and Zimmer/Biomet megamergers, though, will dwarf these earlier acquisitions. 2014. Thermo-Fisher for $13.6bn, and J&J's Ortho-Clinical Diagnostics unit The Groupindustry. for $4.2bn. Worth $42.9bnhike and these deals will change theby face ofCarlyle the medtech This ongoing massive in$13.4bn, H1 2014respectively, vs H1 was largely due to the major acquisitions of Life Technologies by The Medtronic/Covidien and2013 Zimmer/Biomet megamergers, though, will dwarf these earlier acquisitions. Thermo-Fisher for $13.6bn, J&J's Ortho-Clinical Diagnostics The Groupindustry. for $4.2bn. Worth $42.9bn and $13.4bn,and respectively, these deals will changeunit theby face ofCarlyle the medtech The ongoing Medtronic/Covidien andTotal Zimmer/Biomet megamergers, though, will dwarf these earlier acquisitions. Count of Medtech M&A Deals vs. Medtech M&A Value (2009 - H1 2014) Worth $42.9bn and $13.4bn, respectively, these deals will change the face of the medtech industry. Target [Acquiror] (Deal Value) Source: EvaluateMedTech® (18 SEP 2014) Count of Medtech M&A Deals vs. Total Medtech M&A Value (2009 - H1 2014) 80 Target [Acquiror] (Deal Value)300 Source: EvaluateMedTech® SEP 2014) 270(18vs. Count of Medtech M&A Deals Total Target [Acquiror] Deal Value 263Medtech M&A Value (2009 - H1 2014) 80 Target [Acquiror] (Deal Value)300 Source: EvaluateMedTech® 270(18 SEP 2014)

100 100 50 50

$30bn

$51bn 2010 $51bn 2010

$78bn $46bn 2011 2012 $78bn $46bn 2011 Deal Value ($bn) 2012

$28bn 2013 $28bn 2013 Deal Count

$7bn H1 2013 $7bn H1 2013

$30bn H1 2014 $30bn H1 2014

2010

2011 Deal Value ($bn) 2012

2013 Deal Count

H1 2013

H1 2014

50 0 0 0

Count of Medtech Closed M&A Deals vs. Total Medtech M&A Value (2009 - H1 2014) Deal Value ($bn) Deal Count Count Closed M&A M&ADeals Dealsvs. vs.Total TotalMedtech MedtechM&A M&A Value (2009 2014) Count of of Medtech Medtech Closed Value (2009 - H1- H1 2014) 2010 2011 2012 2013 H1 2013 Period Count of Medtech Closed2009 M&A Deals vs. Total Medtech M&A Value (2009 178 270 263 241 207 Deal Count 2009 2010 2011 2012 2013 H1106 2013 Period % Chg. 52% -3% -8% -14% 178 270 263 241 207 106 Deal Count 2009 2010 2011 2012 2013 H1 2013 Period Deal Value ($bn) 13 51 78 46 28 7 % Chg. 52% -3% -8% -14% 178 270 263 241 207 106 Deal Count % Chg. 285% 53% -41% -38% Deal Value ($bn) 13 51 78 46 28 7 % Chg. 52% -3% -8% -14% % Chg. 285% 53% -38%2014) Top 10 Medtech on Deal-41% Value (H1 Deal Value ($bn) M&A Deals13Closed:51Ranked78 46 28 7 Top 10 Medtech M&A Deals Closed: Ranked on Deal-41% Value (H1 % Chg. 285% 53% -38%2014)

H1 2014 H1 2014) H1 95 2014 -10% 95

H1 30 2014 -10% 95 363% 30 -10% 363% 30 363%

Country (Status) Acquiror Top 10 DealsClosed: Closed:Ranked Ranked onDeal DealValue Value (H12014) 2014) TopTarget 10Medtech Medtech M&A M&A Deals on (H1 1 Life Technologies USA (Listed) Target Country (Status) 2 Ortho-Clinical Diagnostics USA 1 Life Technologies USA (Unit) (Listed) Target Country (Status) 3 Transitions Optical USA (Unit) (Private) 2 Ortho-Clinical Diagnostics USA 1 Life Technologies USA (Unit) (Listed) 4 Novartis Blood Transfusion Diagnostics USA 3 Transitions Optical USA (Private) 2 Diagnostics USA (Unit) 5 Ortho-Clinical ArthroCare USA (Unit) (Listed) 4 Novartis Blood Transfusion Diagnostics USA 3 Transitions Optical USA (Private) 6 Given Imaging Israel (Listed) 5 ArthroCare USA (Listed) 4 Blood Transfusion Diagnostics USA (Unit) 7 Novartis BarrierSafe Solutions International USA 6 Given Imaging Israel(Private) (Listed) 5 USA (Listed) 8 ArthroCare BioFire Diagnostics USA (Private) (Private) 7 BarrierSafe Solutions International USA 6 Given Imaging Israel (Listed) 9 IQuum Diagnostics USA 8 BioFire USA (Private) (Private) 7 BarrierSafe Solutions International USA (Private) 10 Coastal Contacts Canada (Listed) 9 IQuum USA (Private) 8 BioFire USA (Private) Other Diagnostics 10 Coastal Contacts Canada (Listed) 9 Total IQuum USA (Private) Other 10 Coastal Contacts Canada (Listed) Source: TotalEvaluateMedTech® (18 SEP 2014) Other Note: Analysis based on closing deal. Source: EvaluateMedTech® (18 date SEP of 2014) Total

Thermo AcquirorFisher Scientific The Carlyle Group Thermo Fisher Scientific Acquiror Essilor International The Carlyle Group Thermo Fisher Scientific Grifols Essilor International The Carlyle Group Smith & Nephew Grifols Essilor International Covidien Smith & Nephew Grifols Ansell Covidien Smith & Nephew bioMérieux Ansell Covidien Roche bioMérieux Ansell Essilor Roche International bioMérieux Essilor International Roche Essilor International

Completion Deal Date Value ($m) Completion Deal 03 Date Feb 14 Value 13,600 ($m) Completion Deal 30 Feb Jun 14 4,150 03 14 13,600 Date Value ($m) 01 Jun Apr 14 1,855 30 14 4,150 03 Feb 14 13,600 09 Jan 14 1,675 01 Apr 14 1,855 30 May Jun 14 4,150 29 14 1,500 09 Jan 14 1,675 01 Apr 14 1,855 27 May Feb 14 860 29 14 1,500 09 Jan 1,675 03 Feb Jan 14 14 615 27 14 860 29 14 1,500 16 May Jan 14 14 450 03 Jan 615 27 Feb 14 14 860 10 450 16 Jun Jan 14 450 03 14 615 28 Jan Apr 14 393 10 Jun 14 450 16 Jan 14 450 4,720 28 Apr 14 393 10 Jun 14 450 30,268 4,720 28 Apr 14 393 30,268 4,720 30,268

*Alcon & Genzyme included in analysis >25% of company sales are derived from medtech. Note: Analysis based on closing date ofas deal. *Alcon & Genzyme included in analysis as >25% of company sales are derived from medtech. Note: Analysis based on closing date of deal. *Alcon & Genzyme included in analysis as >25% of company sales are derived from medtech.

Source:EvaluateMedTech® EvaluateMedTech® 2014) Source: (18(18 SEPSEP 2014)

Note: Analysis based on closing date of deal.

*Alcon & Genzyme included in analysis as >25% of company sales are derived from medtech.

18 18

Venture Financing Analysis: 2009 to H1 2014 Venture Financing Analysis: 2009 to H1 2014

Value of Venture Financing Falls 16% in H1 2014; Deal Count Decreases Venture Financing Analysis: 2009 to H124% 2014

Valuefound of Venture Financing Falls inthe H1 value 2014; Dealnumber Count 24% Venture Financing Analysis: 2009 to H1Decreases EvaluateMedTech® significant decreases in16% both and of2014 venture financing deals in H1 2014 vs H1 2013. The total EvaluateMedTech® found significant decreases in both the value and number of venture financing deals in H1 2014 Value ofventure Venturefinancing Financing 16% H1 2014; Deal Count Decreases 24% deal value of medtech fellFalls by 16% toin$2.2bn, whilst the number of venture financing deals slumped 24% to 199. vs H1 2013. The total dealsignificant value of medtech venture financing felland by 16% to $2.2bn, whilst the number EvaluateMedTech® found decreases in both the value number of venture financing dealsofinventure H1 2014

ofsecured Venture Financing Falls 16% in H1in2014; Dealraising Count $120m Decreases 24% G offering in June to help fund development Proteus Digital Value Health the largest financing round H1 2014, intoa $2.2bn, Series financing deals slumped 24% to 199. vs H1 2013. The total deal value of medtech venture financing felland by 16% whilst the number EvaluateMedTech® found significant decreases in both the value number of venture financing dealsofinventure H1 2014 of its digital health feedback system. Proteus Digital secured largest financing round in H1 2014, raising $120m in a Series G offering in June financing deals Health slumped 24% tothe 199. vs H1 2013. The total deal value of medtech venture financing fell by 16% to $2.2bn, whilst the number of venture to help fund development of itstothe digital health feedback system. Proteus Digital Health secured largest financing round in H1 2014, raising $120m in a Series G offering in June financing deals slumped 24% 199. to help fund development of its the digital health feedback system. Proteus Digital Health secured largest financing round in H1 2014, raising $120m in a Series G offering in June to help fund development of its Deals digital health feedback system. Count of Financing vs. Total Financing Value (2009 - H1 2014) Source:ofEvaluateMedTech® (18Total SEP Financing 2014) Count Financing Deals vs. Value (2009 - H1 2014) 5000 Source: EvaluateMedTech® (18 SEP 2014) 700 Count of Financing Deals vs. Total Financing Value (2009 - H1 2014)

DealDeal Value Deal Value ($m) Value ($m) ($m)

4000 4000 4000 3000 3000

700

Source: EvaluateMedTech® (18 SEP 2014) $4,805m $4,670m $4,670m

5000 $3,938m $3,938m $3,938m 407 407

3000

$4,670m 449 449

$4,805m $4,805m 524 524

$4,162m $4,162m $4,162m 429 429

524

449

700 600 600

$4,586m $4,586m $4,586m 458 458

H1 2013 H1 2014 vs. H1 2013

458

429

407

600 500 500

H1 2014 vs. 2013 H1H1 2014 vs.

$2,630m $2,630m 262 $2,630m 262

2000 2000 2000

262

1000 1000

500 400 400

$2,206m $2,206m 199 $2,206m 199 199

1000 0 0 0

2009 2009

2010 2010

2009

2010

2011 2011 Deal Value 2011 Deal Value

2012 2012

2013 2013 Deal Count 2012 Deal Count 2013

H1 2013 H1 2013

H1 2014 H1 2014

H1 2013

H1 2014

400 300 300

DealDeal Count Deal Count Count

5000

300 200 200 200 100 100 100 0 0 0

Count of Medtech Financing Deals vs. Total Value (2009 DealFinancing Value Deal Count- H1 2014)

Count MedtechFinancing FinancingDeals Deals vs. Total Financing Value (2009 H1 2014) Count of of Medtech vs. Total Financing Value (2009 - H1- 2014) H1

Count of Medtech Financing Deals - H1 2014) 2009vs. Total 2010 Financing 2011 Value 2012 (2009 2013 2013 H1

Period Deal Count Period % Chg. Deal Count Period Deal Value % Chg. Deal Count ($m) % Chg. Chg. Deal Value ($m) % % Chg. Deal Value ($m)

2009 407

2010 449

2011 524

2012 429

2013 458

407 2009

10% 449 2010

17% 524 2011

-18% 429 2012

7% 458 2013

3,938 407 3,938

4,670 10% 449 19% 4,670 10%

4,805 17% 524 3% 4,805 17%

4,162 -18% 429 -13% 4,162 -18%

4,586 7% 458

2013 262 H1 262 2013

H1 2014 H1 2014 199 H1 -24% 199 2014

2,630 262 2,630

2,206 -24% 199 -16% 2,206 -24%

19% 3% -13% 3,938 4,670 4,805 4,162 Top 10 Medtech Venture Financing Deals: Ranked on Deal Value (H1 2014) 2,630 % Chg. 19% 3% -13% 10% Top 10 Medtech Venture Financing Deals: Ranked on Deal Value (H1 2014)

-16% 2,206

10% 4,586 7% 10% 4,586

Financing Top10 10 Medtech Medtech Venture Ranked onon Deal Value (H1 (H1 2014) Top VentureFinancing FinancingDeals: Deals: Deal Value 2014) PrimaryRanked Focus Companty Country Round Financing 1 Proteus Digital Health Patient Monitoring USA Series G Primary Focus Companty Country Round Financing 2 Proteus Adaptive Biotechnologies In Vitro Monitoring Diagnostics USA 1 Digital Health Patient G Primary Focus Companty Country Series RoundD 3 Proteus Halt Medical Obs. & Gyne. 2 Adaptive Biotechnologies In Vitro Diagnostics USA Series D 1 Digital Health Patient Monitoring USA Series E G 4 GC Aesthetics General & Plastic Surgery Ireland Series 3 Medical Obs. & Gyne. USA E 2 Halt Adaptive Biotechnologies In Vitro Diagnostics USA Series A D 5 Halt Advanced Accelerator Applications Diagnostic Imaging France Undisclosed 4 GC Aesthetics General & Plastic Surgery Ireland Series 3 Medical Obs. & Gyne. USA Series A E 6 InSightec Israel Series A D 5 Accelerator Applications Diagnostic Imaging France Undisclosed 4 Advanced GC Aesthetics General & Plastic Surgery Ireland Series 7 AqueSys Ophthalmology USA 6 Diagnostic Imaging Israel Series D 5 InSightec Advanced Accelerator Applications Diagnostic Imaging France Undisclosed 8 InSightec Holaira Anesth. & Resp. 7 AqueSys Ophthalmology USA Series D D 6 Diagnostic Imaging Israel Series 9 Inspire Medical Systems E 8 Anesth. & Resp. USA Series 7 Holaira AqueSys Ophthalmology USA Series D D 10 Medical General & Resp. Plastic Surgery USA Series 9 Inspire Systems Anesth. 8 Benvenue Holaira Medical Anesth. & & Resp. USA Series E D Other Medical 10 Medical General & Resp. Plastic Surgery USA Series 9 Benvenue Inspire Systems Anesth. & USA Series E E Other Total 10 Benvenue Medical General & Plastic Surgery USA Series E TotalEvaluateMedTech® (18 SEP 2014) Source: Other

-16%

Date 02 Date Jun 14 07Date Apr 14 02 Jun 01 Apr 14 07 Jun 02 14 21 01 Apr 07 Feb Apr 14 14 17 14 21 01 Feb Apr 14 30 Feb Jun 14 17 21 Feb 14 16 Feb Jan 14 30 Jun 17 14 03 Jun Apr 14 16 Jan 30 14 15 14 03 May Apr 14 16 Jan 14 18 Jun 14 15 14 03 May Apr 14 18 May Jun 14 15 14 18 Jun 14

Deal Value ($m) Deal 120($m) Value Deal 100($m) 120 Value 93 100 120 60 93 100 56 60 93 50 56 60 44 50 56 42 44 50 40 42 44 40 42 40 1,562 40 2,206 1,562 40 2,206 1,562

Source: EvaluateMedTech® SEP 2014) Total 2,206 Note: Includes investments in(18 medtech companies only. Does not include pharmaceutical or biotech companies. Includes Privateinvestments Investment in in Public Source: EvaluateMedTech® (18 SEP Equity 2014) (PIPE). Note: Includes medtech Source: EvaluateMedTech® (18 SEP 2014)companies only. Does not include pharmaceutical or biotech companies. Includes Privateinvestments Investment in in medtech Public Equity (PIPE).only. Does not include pharmaceutical or biotech companies. Note: Includes companies Includes Private Investment in Public Equity (PIPE).

Note: Includes investments in medtech companies only. Does not include pharmaceutical or biotech companies. Includes Private Investment in Public Equity (PIPE). 19 19 19

IPO Analysis: 2013 and 2014 Medtech IPO Activity Picks Up from Q4 2013; $1.3bn Raised in H1 2014

IPOfound Analysis: 2013 and 2014 EvaluateMedTech® a significant increase in IPO activity in the medtech space in 2014, in terms of both value and number of closed deals. By the end Medtech of H1 2014 $1.3bn had been raised in completed IPOs, which is 44% more than the $900m raised in the whole of 2013. IPO Activity Picks Up from Q4 2013; $1.3bn Raised in H1 2014

foundHealth, a significant increase in activity in the medtech space inin 2014, in terms both value double that raised The largest IPO in EvaluateMedTech® H1 2014 was Castlight a healthcare ITIPO company, which raised $204m March. This ofwas almost IPO 2013 2014 andAnalysis: number of closed deals. and By the end of H1 2014 $1.3bn had been raised in completed IPOs, which is 44% more by the second ranked maker K2M, which raised $120m in May. thancompany, the $900m spinal raised device in the whole of 2013. The largest IPO in H1 2014 a healthcare ITin company, Medtech IPO Activity Pickswas UpCastlight from Q4 Health, 2013; $1.3bn Raised H1 2014which raised $204m in March. This was IPO Analysis: 2013 and 2014 almost double that raised the second ranked company, spinal makerspace K2M, which raised $120m in May. EvaluateMedTech® foundby a significant increase in IPO activity in device the medtech in 2014, in terms of both value

800 700 500 700 600

400 600 500 300 500 400

6 7

100 300 200

5 $200m

0 200 100

Q1 2013 $200m

8 12 10 6 10 8

4 8 6

4 6

7 2 6 4

$123m

4 $182m

$395m

$597m

$694m

Q2 2013

4 Q3 2013

Q4 2013

Q1 2014

Q2 2014

$123m

Deal Value $182m

$597m

$694m

Deal Count $395m

Count of Medtech IPO Deals vs. 2013 - Q2 2014) Q1 2013 Q2Total 2013 IPO Value Q3(Q1 2013 Q4 2013

200 400 300

100 0

10 14 12

Q1 2014 $200m $123m $182m $395m $597m 0 Q1 Q2 Deal Value Q3 Q4 Count Q1 Q2 Deal Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 2013 2013 2013 2013 2014 2014 Quarter Count ofMedtech Medtech IPO Deals vs. IPO Value (Q1 2013 2014) Count of IPO Deals vs. Total IPO Value (Q1 2013 2014) 5 Total 7 Deal 4 - Q2 6- Q2 10 12 Deal Count Value Deal Count % Chg. from previous quarter 40% -43% 50% 67% 20% Q1 Q2 Q3 Q4 Q1 Q2 Count of Medtech IPO Deals vs. Total Deal Value ($m) 200 IPO Value 123 (Q1 2013 182 - Q2 2014) 395 597 694 2013 2013 2013 2013 2014 2014 Quarter % Chg. from previous quarter -39% 48% 118% 51% 16% 5 7 4 6 10 12 Deal Count Q1 Q2 Q3 Q4 Q1 Q2 % Chg. from previous 40% -43% 50% 67% 20% 2013on Deal2013 2013 2014 2014 Quarter Top 10 Medtech IPOquarter Deals: Ranked Value (H12013 2014) Value ($m) 200 123 182 395 597 694 5 7 4 6 10 12 Deal Count -39% 48% 118% 51% 16% % Chg. from previous quarter 40% -43% 50% 67% 20% Country Stock Primary DealCompany Value ($m) 200 123 Focus 182 395 597Exchange694 Top 10 Medtech IPO Deals: Ranked on Deal ValueIT(H1 2014) USA 1 Healthcare NYSE %Castlight Chg. fromHealth previous quarter -39% 48% 118% 51% 16% 2 K2M Orthopedics USA Nasdaq Top 10 Medtech IPO Deals: Ranked on Deal Value (H1 2014) Top 10 Medtech IPO Deals: Ranked on Deal Value (H1 2014) 3 Horizon Discovery In Vitro Diagnostics UK LSE AIM Company Country Stock Exchange Primary Focus 4 Materialise Group 3D Printing Belgium Nasdaq 1 Castlight Health Healthcare IT USA NYSE 5 TriVascular Technologies Cardiology USA Nasdaq 2 Company K2M Orthopedics USA NasdaqExchange Country Stock Primary Focus 6 CYBERDYNE Rehabilitation Japan Tokyo Stock Exchange 3 Castlight Horizon Discovery In Vitro Diagnostics UK LSE AIM 1 Health Healthcare IT USA NYSE 7 Inogen Respiratory USA Nasdaq 4 K2M Materialise Group 3D Printing Belgium 2 Orthopedics USA Nasdaq 8 Supersonic Imagine Diagnostic Imaging France NYSE Euronext 5 Horizon TriVascular Technologies Cardiology USA Nasdaq 3 Discovery In Vitro Diagnostics UK LSE AIM 9 Lombard Medical Technologies Cardiology UK Nasdaq 6 Rehabilitation Japan Tokyo Stock Exchange 4 CYBERDYNE Materialise Group 3D Printing Belgium Nasdaq 10 Vital Therapies Liver Disorders USA Nasdaq 7 TriVascular Inogen Respiratory 5 Technologies Cardiology USA Nasdaq Other 8 Imagine Diagnostic Imaging France NYSE 6 Supersonic CYBERDYNE Rehabilitation Japan Tokyo Euronext Stock Exchange Total 9 Cardiology UK Nasdaq 7 Lombard Inogen Medical Technologies Respiratory USA Source: EvaluateMedTech® (18 SEP 2014) 10 Therapies Liver Disorders USA Nasdaq 8 Vital Supersonic Imagine Diagnostic Imaging France NYSE Euronext Note: Does Medical not include pharmaceutical or biotech companies. UK Other 9 Lombard Technologies Cardiology Nasdaq 10 Total Vital Therapies Liver Disorders USA Nasdaq OtherEvaluateMedTech® (18 SEP 2014) Source: Total Note: Does not include pharmaceutical or biotech companies.

Source: EvaluateMedTech® (18 SEP 2014) Source: EvaluateMedTech® (18 SEP 2014) Note: Does not include pharmaceutical or biotech companies.

Deal Count Deal Count Deal Count

Deal Value Deal Value ($m) Deal ($m)Value ($m)

and number of closed deals. By the end of H1 2014 $1.3bn had been raised in completed IPOs, which is 44% more Medtech IPO Activity Picks Up from Q4 2013; $1.3bn Raised in H1 2014 than the $900m raised in the whole of 2013. Quarterly Count IPOCastlight Dealsincrease vs. Total Value 2013 - Q2which 2014) EvaluateMedTech® found significant inaIPO activity(Q1 in the medtech space in 2014, in terms of both The largest IPO in H1 2014aof was Health, healthcare IT company, raised $204m in March. Thisvalue was and number of closed deals. By the end ofSEP H1 2014 $1.3bn had been raised in K2M, completed is 44% more Source: EvaluateMedTech® (18 2014) almost double that raised by the second ranked company, spinal device maker whichIPOs, raisedwhich $120m in May. than 800 the $900m raised in the whole of 2013. 14 The largest IPO in H1 2014 was Castlight Health, a healthcare IT company, which raised $204m in March. This was almost double that raised by the second ranked company, spinal device maker K2M, which raised $120m in May. Quarterly Count of IPO Deals vs. Total IPO Value (Q1 2013 - Q2 2014) 700 12 Source: EvaluateMedTech® (18 SEP 2014) 12 800 14 Quarterly Count of IPO Deals vs. Total IPO Value (Q1 2013 - Q2 2014) 600 Source: EvaluateMedTech® (18 SEP 2014)

0 4 2 2 0

Q2 2014 $694m 0 Q2 2014

Date 14 Mar 14 13 May 14 27 Mar 14 Date 25 Jun 14 14 Mar 14 16 Apr 14 13 Date May 14 26 Mar 14 27 Mar 14 14 14 Feb 14 25 May Jun 14 13 14 10 Jun 14 16 Mar Apr 14 27 25 Apr 14 26 25 Mar Jun 14 17 Apr 14 14 16 Feb Apr 14 10 Mar Jun 14 26 25 Feb Apr 14 14 17 Jun Apr 14 10 25 Apr 14 17 Apr 14

Deal Value ($m) 204 120 Deal 114 Value ($m) 110 204 Deal 101 120($m) Value 88 114 204 71 110 120 69 101 114 63 88 110 62 71 101 285 69 88 1,288 63 71 62 69 63 285 62 1,288 285 1,288

Note: Does not include pharmaceutical or biotech companies.

Enterprise Value & Focus Analysis: 2014 Latest vs. 2013 General Electric Number 1 in Latest Enterprise Value Rankings EvaluateMedTech® found US giant General Electric to be the largest company, judged by enterprise value, operating in the medtech space. Focus Analysis: Latest vs. 2013 With a figure ofEnterprise $509bn as at 17 Value SEP 2014,& is a long way ahead of the 2014 second ranked company, Johnson & Johnson, which has an Enterprise Value &GEFocus Analysis: 2014 Latest vs. 2013 enterprise value of $285bn. General Electric Number 1 in Latest Enterprise Value Rankings

The analysis includes only medtech companies that are forecast totohave sales in excess of $1bn in 2020. EvaluateMedTech® found US General Electric beRankings the largest company, judged by enterprise value, operating General Electric Number 1 ingiant Latest Enterprise Value in the medtech space. With a figure of $509bn as at 17 SEP 2014, GE is a long way ahead of the second ranked

EvaluateMedTech® found US giant General Electric toand be the largestatcompany, enterprise value, operating The highest ranking pure-play medtech companies are an Medtronic Covidien positionsjudged 11 andby 12, with enterprise values of $63bn and company, Johnson & Johnson, which enterprise value of $285bn. in the medtech space. With a figure of has $509bn as at 17 SEP 2014, GE is a long way ahead of the second ranked $61bn, respectively. Upon completion of their proposed merger, the new entity’s combined enterprise value of $124bn would move up to The analysis includes only medtech companies that are forecast to have sales in excess of $1bn in 2020. company, Johnson & Johnson, which has an enterprise value of $285bn. The highest ranking medtech companies Covidien positions 11 and 12, with enterprise number 8 in the rankings. The analysis includespure-play only medtech companies thatare areMedtronic forecast toand have sales inatexcess of $1bn in 2020. values of $63bn andpure-play $61bn, respectively. Upon completion of their proposed merger, the new medtech companies are Medtronic and Covidien at positions 11 entity's and 12,combined with enterprise The highest ranking enterprise value and of $124bn move upUpon to number 8 in the values of $63bn $61bn,would respectively. completion of rankings. their proposed merger, the new entity's combined enterprise value of $124bn would move up to number 8 in the rankings. WW Ranking on Enterprise Value in 2014 (Latest) Source: EvaluateMedTech® SEP WW Ranking on Enterprise (18 Value in2014) 2014 (Latest) Source: EvaluateMedTech® (18 SEP 2014) 600 +20%

+16% +16%

400 400

+18% +18% +12% +12%

+15% +15%

+9% +9%

300 300

-5% -5%

$64bn $64bn

$66bn $66bn

Abbott Abbott Laboratories Laboratories

$98bn $98bn

Thermo Thermo Fisher Fisher Scientific Scientific

$132bn $132bn

3M3M

$136bn $136bn

Bayer Bayer

$171bn $171bn

Siemens Siemens

$230bn $230bn

Sanofi Sanofi

$279bn $279bn

Novartis Novartis

$285bn $285bn

Roche Roche

-6% -6% $509bn $509bn

+0% +0%

-3% -3%

-6% -6%

+10% +10% +5% +5%

+4% +4%

Johnson & & Johnson Johnson Johnson

0 0

+13% +13%

Return: +8%

200 200 100 100

+11% +11%

S&P 2014 YTD Return: S&P 2014+8% YTD

-10% -10%

Share Price Performance YTD (%)(%) Share Price Performance YTD

+20%

500 500

General General Electric Electric

Enterprise Value ($bn) Enterprise Value ($bn)

600

-15% -15%

Enterprise Value: Top 20 Medtech Companies in 2014 (2020 Sales: >$1bn)

Enterprise Value: Top Top20 20Medtech MedtechCompanies Companies 2014 (2020 Sales: >$1bn) Enterprise Value: in in 2014 (2020 Sales: >$1bn) Company Country General Electric Country USA 1 Company JohnsonElectric & Johnson USA 12 General USA Roche & Johnson 23 Johnson USA Switzerland Novartis 34 Roche Switzerland Switzerland Sanofi 45 Novartis Switzerland France Siemens 56 Sanofi France Germany Bayer 67 Siemens Germany Germany 3M 78 Bayer Germany USA Thermo Fisher Scientific USA 89 3M USA Fisher Scientific USA Abbott Laboratories 9 Thermo 10 USA Laboratories Medtronic 10 USA 11 Abbott USA Covidien 11 USA 12 Medtronic USA Valeant Pharmaceuticals USA 12 13 Covidien Canada DanaherPharmaceuticals Canada 13 14 Valeant USA Baxter International 14 USA 15 Danaher USA International Kimberly-Clark 15 USA 16 Baxter USA Allergan 16 USA 17 Kimberly-Clark USA Toshiba 17 USA 18 Allergan Japan Philips 18 Japan 19 Toshiba The Netherlands Stryker 19 The 20 Philips USANetherlands Total Top 20 20 Stryker USA Total Top 20 Source: EvaluateMedTech® (18 SEP 2014)

% '14 Sales % '14 Sales Medtech Medtech 8%

Enterprise Value ($bn) Enterprise Value%($bn) 2013 Latest Growth 2013 Latest % Growth 533 509 -4%

Share Price ($ ADR) Share Latest Price ($ % ADR) 2013 Growth 2013 Latest 28.03 26.27 % Growth -6%

8% 40%

533 247

509 285

-4% +15%

28.03 91.59

26.27 106.19

-6% +16%

40% 22%

247 246

285 279

+15% +13%

91.59 278.67

106.19 312.63

+16% +12%

22% 12%

246 204

279 230

+13% +13%

278.67 80.38

312.63 94.72

+12% +18%

12% 2%

204 148

230 171

+13% +15%

80.38 51.75

94.72 56.52

+18% +9% +9% -6%

2% 18%

148 127

171 136

+15% +7%

51.75 134.29

56.52 126.63

18% 4%

127 125

136 132

+7% +6%

134.29 142.00

126.63 137.17

-6% -3%

4% 17%

125 96

132 98

+6% +3%

142.00 140.25

137.17 145.37

-3% +4%

17% 24%

96 45

98 64

+3% +43%

140.25 111.35

145.37 123.60

+4% +11%

24% 46%

45 58

64 66

+43% +13%

111.35 38.33

123.60 43.38

+11% +13%

46% 100%

58 55

66 63

+13% +16%

38.33 57.13

43.38 65.98

+13% +15%

100% 100%

55 33

63 61

+16% +84%

57.13 66.08

65.98 123.31

+15% +87%

100% 19%

33 56

61 57

+84% +2%

66.08 117.40

123.31 121.85

+87% +4%

19% 47%

56 54

57 55

+2% +2%

117.40 77.20

121.85 78.73

+4% +2%

47% 38%

54 44

55 46

+2% +5%

77.20 69.55

78.73 72.65

+2% +4%

38% 8%

44 44

46 45

+5% +1%

69.55 104.46

72.65 106.72

+4% +2%

8% 14%

44 32

45 49

+1% +55%

104.46 111.08

106.72 170.04

+2% +53% +53% +8%

14% 6%

32 30

49 35

+55% +17%

111.08 25.41

170.04 27.38

6% 30%

30 35

35 34

+17% -5%

25.41 35.70

27.38 30.45

+8% -15%

30% 100%

35 27

34 31

-5% +14%

35.70 75.14

27 2,238

31 2,445

+14% +9%

75.14

30.45 83.94 avg. 83.94

-15% +12% +12% +12%

2,238

2,445

+9%

avg.

+12%

100%

Source: EvaluateMedTech® (18 SEP 2014) Source: EvaluateMedTech® SEP 2014) Note: Includes companies (18 with >$1bn medtech sales in 2020. Valuation basedcompanies on share price close and valuation onin17 SEP 2014. Note: Includes with >$1bn medtech sales 2020. Valuation based on share price close and valuation on 17 SEP 2014. 21 21

Note: Includes companies with >$1bn medtech sales in 2020. Valuation based on share price close and valuation on 17 SEP 2014.

20 20

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Evaluate – Headquarters – Evaluate Ltd, 11-29 Fashion Street, London E1 6PX United Kingdom Tel: +44 (0)20 7377 0800 – Fax: +44 (0)20 7539 1801 Evaluate – North America – EvaluatePharma USA, Inc., 15 Broad Street, Suite 401, Boston, MA 02109 USA Tel: 1-617 573-9450 – Fax: 1-617 573-9542 Evaluate – Japan – EvaluatePharma Japan KK, Tokyo, Japan Tel: +81 (0) 80 1164 4754 www.evaluategroup.com All intellectual property rights in this report remain that of Evaluate Ltd and/or its respective third party licensors. Whilst all reasonable steps have been taken to ensure that the data presented are accurate, Evaluate Ltd cannot accept responsibility for errors or omissions. Neither does Evaluate Ltd warrant the accuracy, merchantability or fitness for a particular purpose of the data. Nothing in the reports shall constitute investment, financial or legal advice and the contents of the reports are provided for information purposes only. The data is not intended to amount to advice and should not be used as a determining factor in any investment decision. This report may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior written consent of Evaluate Ltd. Copyright © 2014 Evaluate Ltd. All rights reserved. EMTWP2014