NMT Medical

1
NMT Medical

• Steven Jens
• February 24, 2004

2
Trivia

• Happy Birthday to Yelena
• Happy Mardi Gras to whomever celebrates it

3
Background

• Patent Foramen Ovale artifact of gestation
• Ordinarily closes within a year of birth
• One in four adults still has a PFO in most
  cases, harmless, but
• Causes 150,000 strokes per year in the U.S., and
  up to 200,000 Transient Ischemic Attacks

4
PFO Treatment Options

• Blood-thinning drugs (aspirin and coumadin) 16
  two-year recurrence
• Open-heart surgery (rarely worth it)
• Cardiac Septal Repair Devices (CSRDs)

5
CSRDs

• Delivered by catheter in an outpatient procedure

6
CSRD Market

• NMT Medical and three private companies
• Most significant competitor is AGAs PFO Occluder
• NMT produces the CardioSEAL and STARFlex devices

7
CLOSURE I

• CLOSURE I is a three-year trial designed to lead
  to full FDA approval of StarFLEX
• Started in March, 2003
• Estimated cost 20 million
• Full FDA approval expected in 2007

8
Valuation

• Book Value (all real) 37.8 million (36 million
  in cash and friends)
• Present Value of royalties on divested products
  .8 million
• Market cap 55 million

9
Valuation (continued)

• Present value of CSRD residual income with
  CLOSURE I 40 million
• Present value of CSRD residual income without
  CLOSURE I at least 14 million

10
Valuation III

• Total value with CLOSURE I 78 million
• Total value without CLOSURE I 52 million
• Market cap 55 million
• Verdict probably undervalued, but not clearly
  undervalued

11
What makes it a buy?

• More certainty, better expectations, better price
• FY 03 results come out first week of March. I
  will be looking especially at European
  sales/market share numbers.