1. Radio Frequency Ablation (RFA) of Barrett’s Esophagus HALO 90M FOR THE ASC

2. “RFA is not just a cosmetic issue for someone's esophagus. It is a cancer prevention. It's got a very high threshold of evidence. We get to prevent cancer.” Robert Ganz, MD Minnesota Gastroenterology Inc. (MINNGI) Chief of Gastroenterology; Abbott Northwestern Hospital It’s this simple…

3. HALO Ablation System Facts FDA Clearance in 2001 Commercially Launched in 2005 Over 1,800 Physician Users Over 120,000 Procedures Performed – ~55% of patients treated since 2005 have been non-dysplastic Barrett’s Published in over 75 Peer-Reviewed Articles 2010 Publication of Efficacy & Durability of RFA Therapy Over 5 Years 1 Cited as “The Treatment of Choice 2 ” (1) Endoscopy, October 2010 (2) Shaheen, ACG 2010, Referring to HGD

4. Standard of Care Comparison

5. Barrett’s Esophagus 0.5%/patient/year cancer 0.9%/patient/year HGD Colon Polyp 0.5%/patient/year cancer 7.5M colonoscopies/year

6. Routine Colorectal Polypectomy & BE Ablation: Intellectually the Same (El-Serag, Graham. Gastroenterology, 2010) Historical perspective: Current evolution in BE management parallels colon polyp paradigm shift of ~25 years ago BE Management Past: Risks of previous endo therapies made surveillance only viable option for NDBE/LGD Present: Published literature demonstrates RFA is safe and effective in NDBE, LGD, HGD Future: Authors predict ablation will shift the BE management paradigm from surveillance-only to cancer prevention via treatment “In the case of colorectal polyps, the advent of fiberoptic colonoscopy with polypectomy has been the turning point in the management of these lesions. We believe that the management of BE is likely to proceed along a similar path.” Paradigm Shift

7. Barrett’s Esophagus Contemporary Management of Barrett’s Esophagus

8. Barrett’s Esophagus 8

9. Barrett’s Esophagus: A Precursor to Esophageal Cancer

10. Accumulate Genetic Changes Injury Acid & bile reflux nitrous oxide Genetics Gender, race, ? other factors (cox-2) Evolution of Barrett’s and Cancer 10: Confidential

11. Relative Change in EAC Incidence Esophagus Melanoma Colorectal Lung/Breast Prostate From: Pohl H, Welch HG. Natl Cancer Inst. 2005 11

12. AGA Medical Position Statement Gastroenterology 2011;140:1084-1091 HGD: “Endotherapy with RFA, PDT, or EMR is recommended rather than surveillance” LGD: “RFA should be a therapeutic option for treatment of patients with confirmed LGD” NDBE: “RFA with or without EMR should be a therapeutic option for select individuals with NDBE (non- dysplastic BE) who are judged to be at increased risk for progression to HGD or cancer” “The AGA Institute strongly supports the concept of shared decision making where the treating physician and patient together consider whether endoscopic surveillance or eradication therapy is the preferred management option for each individual.” 12

13. HALO 90M Catheter RFA Depth (Musc Mucosa) Epithelium Lamina Propria Submucosa Muscularis Propria Bipoloar Electrodes Uniform mucosal removal with a strictly controlled depth of ablation.

14. Ablation with the HALO 90M System 1. MOUNT2. ABLATE 3. CLEAN & REPEAT

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16. Focal RFA “Touch-up” Shaheen, et al. NEJM 2009. 16

17. HALO 90M for the ASC BEFOREAFTER

18. HALO 90M Feasibility in the ASC Fast, Easy, Effective Takes ~15-20 minutes to perform Easy to use (similar to EGD) Performed under conscious sedation or Propofol Discharge time similar to colonoscopy CMS Facility Fee in the ASC setting increased by 62% effective January 1 st, 2012

19. 75+ Peer-Reviewed Publications

20. AIM Trial: 5-Year Durability (Fleischer, Endoscopy, 2010) Extension of AIM II Trial to 5 years Biopsy surveillance –4Q/1cm; central path lab If BE recurrence: –focal RFA; biopsy 2 mos later Results: 92% (n=46) CR-IM at 5 yrs 8% (n=4) with NDBE (no neoplastic progression) All re-established CR-IM –No strictures or perforations –No buried glands in 1,473 bxs Conclusion: –CR-IM after RFA is durable

21. Safety HALO RFA: total procedures to date: 92,187 – Cumulative Reportable Event Rate by Procedure (HALO 360 & HALO 90 ): 0.22% Perforation: 0.01%, Bleeding 0.02%, Stricture: 0.17%, Mucosal injury: 0.01%. vs. Colonoscopy – *Complications after routine Colonoscopy: 0.20% Perforation 0.02%, GI bleeding requiring hospitalization 0.16%, diverticulitis requiring hospitalization 0.02%. *Clin Gastroenterol Hepatol, 2010 Feb;8(2):166-73 Ko CW, Riffle S, Michaels L, Morris C, Holub J, Shapiro JA, Ciol MA, Kimmey MB, Seeff LC, Lieberman D, University of Washington, Seattle, Washington 98195,

22. ASC Economics

23. ASGE Recommended Codes CPT CodeFull Descriptor 43228 Esophagoscopy, rigid or flexible; with ablation of tumor(s), polyp(s), or other lesion(s), not amenable to removal by hot biopsy forceps, bipolar cautery or snare technique 43258 Upper gastrointestinal endoscopy including esophagus, stomach, and either the duodenum and/or jejunum as appropriate; with ablation of tumor(s), polyp(s), or other lesion(s) not amenable to removal by hot biopsy forceps, bipolar cautery or snare technique CONFIDENTIAL

24. ASC Facility Payment Trend (CMS) CONFIDENTIAL

25. 2012 ASC Medicare Payments National Average ProcedureCPTPayment Esophagoscopy w/ Ablation43228$1,048 EGD w/ Ablation43258$511 EGD43235$341 EGD w/ Biopsy43239$341 Colonoscopy45378$378 Colonoscopy w/ Biopsy45380$378 Colonoscopy w/ Polypectomy45384/45385$378 CONFIDENTIAL

26. Why an ASC Strategy makes sense now… Consensus Society Guidelines supporting RFA ASC’s are looking to reduce their dependency on screening colonoscopy Centers are seeking new, profitable, safe, and “necessary” procedures 2012 Final CMS rule: payment increase for CPT code 43228 & 43258 Comparative Pro forma for Colonoscopy vs. RFA Procedures in an ASC CONFIDENTIAL 2011 RFA 2011 Colonoscopy 2012 RFA 2012 Colonoscopy CMS average $ payment$646$362$1048$378 Estimated cost of disposables$400$10$400$10 Profit per procedure$246$352$648$368 MD’s professional fee$228$221$228*$221*

27. Economic model questions 1)Payer Mix: % of Medicare vs. % of Private Payer for ICD-9 530.85 (Barrett’s Esophagus) 2)Identify top 3-5 Payers to see what they pay for CPT 43228 3)What do the contracts look like for each ASC with their top payers for CPT 43228 a)Current rate b)Grouper rates c)Out-of-network d)Any ability to do Supply carve-out 4)Ability to re-negotiate contracts (if necessary), or carve-outs? 5)Anesthesia – do you charge and get reimbursed separately for anesthesia? 6)Pathology – do you have your own Pathology LLC, or do you refer pathology out? Details for each payer and the rates associated with each payer for 43228 are needed to generate accurate economic models CONFIDENTIAL