1 Market Feasibility Study Real-Time Brain Monitoring System

2 Introduction

3 Brief Summary Market feasibility study Office of Technology Licensing offerings Benefits based on available market Weighed philanthropic benefits Based final decision on financial merits

4 Assumptions Assumptions: –Add-on Versus Stand-alone Solution –U.S. Market Only –Initial Market Demand Based Only on Neonatal Intensive Care Units Follow-On Markets Exist (e.g., PICU, Operating Room, Recovery Rooms)

5 The Problem Current monitoring devices and methods are limited –Providing qualitative assessments –Predicting seizure events is difficult –Analyzing events results is lengthy Video

6 From the Inventor… Care of University of Florida Hospital Systems: mms://wm8.video.ufl.edu/onc/051705Carney386.wmvmms://wm8.video.ufl.edu/onc/051705Carney386.wmv

7 The Solution Real-Time Brain Monitoring System Algorithms based on multivariate data input Uses all available patient data Alerts when activity varies from the expected norm Intervention/fidelity of analysis

8 Patient Signal Acquisition Equipment Wireless Monitoring Illness Index and Detection Alarm Technical Depiction

9 Market Analysis

10 Market Analysis Medical Devices –$125.9B in 2004 sales –Future demand at 4.1% compounded annual rate to $167.4B by 2010 Electromedical Equipment –$19.7B in 2004 sales, 8.7% growth rate –Growth rate of 7.7% annually until 2009

11 Market Analysis Neonatal Intensive Care Units –4.1M births annually –1 in 8 births classified as premature –Premature infants at 30% greater risk of major medical issues –Impact $26.2B annually, $51K per infant –>20,000 NICU beds

12 Entry Barriers Food and Drug Administration –Class II Device –Pre-market Notification required (510K) –Needs to be Substantially Equivalent Market Acceptance

13 Competition Other patented devices Brain Z Infra-Red Perfusion and Brain Imaging Technology

14 Demand Analysis

15 Demand Product demand is dependent on service demand Service demand is based occupancy of NICU beds by preterm infant seizure patients

16 Demand Historical data suggest; –> 20,000 NICU beds in the U.S. –≈ 78.5% occupancy rate –11.1% preterm infants have seizures –Demand ≈ 1,750 units –Significant uncertainty in data

17 Demand Estimate Population Birth rate (14.14/1,000) Preterm births (12.5%) Preterm infants with seizures (11.1%) Average NICU stay (17.5 days)

18 Demand Analysis U.S. Population291,263,000293,672,000296,081,000298,490,000 Total Number of Births 4,118,4594,152,5224,186,5854,220,649 Preterm Births514,807519,065523,323527,581 Preterm Births with Seizures 5,714457,61658,08958,561 Number of NICU Beds Requiring RTBMS 2,7402,7622,7852,808

19 Demand Summary Initial demand ≈ 2,740 units Demand increases ≈ 0.8% per year

20 Financial Analysis

21 Assumptions The Financial Analysis includes the following assumptions: –US market only –One scenario – one company to take product from development phase to market –Market share over ten years 41% –Government funding –Price per unit $12,500 –Units sold –Revenue growth is 8.7% per year

22 Research & Development R&D costs total $11.6M and are incurred mainly during the period 2006 to 2008 Costs include: –Software development costs of $2.0M –Research costs involving the validation and integration of the EEG measures of $1.9M –Marketing and Planning during the development phase of $1.3M –Clinical testing of $1.7M –Other costs of $4.7M

23 Profit & Loss Statement

24 Break-Even Analysis

25 Financial Indicators Return on Investment (ROI) –5th Year -$921% –10th Year -$1,286% Internal Rate of Return (IRR) –10th Year -121% Net Present Value (NPV) –5th Year -$73M –10th Year -$89M

26 Conclusions and Recommendations

27 Conclusions The RTBMS offers a tangible solution –Doctors and medical staff are not able to predict the onset of neonatal seizures. The technology can reduce seizure associated financial burdens –Parents of patients (costs of care) –Hospital community (lawsuits) The philanthropic nature of the RTBMS is not enough to warrant the technology’s being taken to market. –Limited market demand for the technology –Protracted payback (break-even) period

28 Recommendations We recommend no investment in the University of Florida’s Real-Time Brain Monitoring System –Large financial risks based solely on the investment in the technology –Cumulative losses of $4.9 million over a 14 year period

29 Questions and Answers

30 Thank You!

31 Research & Development