Surgical Navigation and Robotics:The Time is Now

Venkat Rajan, Industry ManagerHealthcare

June 24th, 2008

2

� Market Overview

� Image Guided Surgery Market

� Robotic Assisted Surgery Market

� Robot Assisted Radio Surgery Market

� Orthopedic Navigation Market

� Cardiac Navigation Market

� End User Adoption Trends: Cardiac Navigation

� Conclusion

Focus Points

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Market Overview

•In 2007, the U.S. market revenues for the Robotics and Image Guided Surgery markets

were $721.4 Million.

•The revenues for this market are expected to reach by $3,879.5 Million by 2014, with a

compound annual growth rate (CAGR) for the period 2007 to 2013 is expected to be

26.4 percent

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Image Guided Surgery Market: Revenue Analysis 2007

27.3%

26.9%

32.4%

13.4%

IGS System

IGS Software

Service

Disposables

Image Guided Surgery Systems Market: Revenue Breakdown by Product (U.S.), 2007

Image guided surgery (IGS) resulted from the need to visualize surgical instruments inside the body during minimally invasive surgeries. It involves:

•Sophisticated methodologies of image acquisition modalities include approaches such as computed tomography (CT), magnetic resonance imaging (MRI), ultrasound, fluoroscopy, and other optical techniques.

•Computing

•Image processing, and rendering to generate 3D reconstructions of the human anatomy.

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Image Guided Surgery Market: Utilization By Treatment Area

While the hardware for most IGS systems are fairly equivalent in terms of form and function, sophisticated software tools are used by firms to establish their identity in the market. Some of the ways a competitor can distinguish themselves:

•Software

•Ergonomics

•Anatomical Specialization

•Comprehensive pre and real time surgical planning

24.5%

28.6%16.3%

25.5%

5.1%

Neuro

Spinal

ENT

Ortho

Other

Image Guided Surgery Systems Market: Revenue Breakdown by Treatment Area (U.S.), 2007

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Robotic Assist Surgery Market: Procedure Volume forda Vinci Surgical System 2005-2009

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2005 2006 2007 2008 2009

Year

Nu

mb

er

of

Pro

ced

ure

s

US Prostatectomy

US Hysterectomies

US Other

Technology Advances Supporting Adoption

•Hospital IT infrastructure to stream video. transfer files, incorporate and store high-resolution body scans.

•AI enabled software capable of profiling disease states and potential complications.

•Motion control intelligence to account for tremors.

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Install Base for Robot Assisted Radio Surgery Systems U.S. 2005-2007

Robotic assisted radiosurgery is a more targeted method for delivering traditional radiation oncology therapy.

These systems are designed to deliver a very high cumulative dose of radiation, in targeted treatments specifically targeted at the tumor rather than at a region surrounding the tumor area.

Being able to focus the beam, allows clinicians to deliver higher doses with out having to risk damage to other tissue.

These systems are ideal for applications in anatomy where precision is critical. The majority of current systems are used in neuroradiosurgical and spinal treatments.

Ultimately future growth will depend on hospitals weighing the costs of higher quality over cost efficiency for cheaper less automated systems.

0

10

20

30

40

50

60

70

80

2005 2006 2007

New System

Placement

Total Installed Base

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Orthopedic Navigation Market – MAKO Surgical

The most common reason for joint replacement is osteoarthritis. It is a progressive condition that can get worse over time and result in sever dehabilitative pain. Apart from being age-related, younger patients who have genetic deformities or suffered certain chronic or acute trauma are candidates for disease. Excess weight, joint fracture, ligament tears, or other injury can damage cartilage and cause osteoarthritis.

Depending on the degree of damage, a surgeon may be able to repair or replace a portion of the joint. However, when the entire joint is damaged, a total joint replacement is performed. To replace a total joint, a surgeon removes the diseased or damaged parts and inserts artificial parts.

MAKO Surgical has developed a robotics platform that utilizes tactile-guided robotics to perform surgeries for implantation and alignment of resurfacing implants through a keyhole incision. This system is FDA-cleared and one of the only systems commercially available, targeting the orthopedic market.

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Cardiac Navigation Market Opportunity

0

50,000

100,000

150,000

200,000

250,000

2004

2005

2006

2007

2008

2009

2010

2011

2012Year

Pro

ced

ure

Vo

lum

e

Atrial Fibrilation Other Arrhythmias

Complex Lead Placement Complex CTO

PFO Closure Percutaneous Valves Repair

•The atrial fibrillation market is considered to be the next major opportunity for growth in the cardiovascular space, particularly for companies focused on cardiac rhythm disorders.

•It is estimated that there are 2.5 million individuals in the United States with atrial fibrillation, of which one million are symptomatic and do not respond well to drug therapy.

•Approximately 200,000 new cases are diagnosed annually.

•Market estimates show that less than 20 percent of the addressable market for atrial fibrillation is being served due to limited regulatory approval and lack of provider training and expertise.

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End User Profile: Cardiac Navigation/Robotics Adoption

Profession/Speciality

Cardiologist

41%

Cardiac Surgeon

8%

Electrophysiology

Fellow

3%

Electrophysiologist

48%

Profile of Respondents:150 U.S. Cardiology Focused Clinical Specialists

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End User Profile: Awareness of Robotic Assist Technologies and

Brands in Electrophysiology and Cardiac Surgery Procedures

4%

4%

7%

59%

93%

14%

32%

27%

45%

0% 20% 40% 60% 80% 100%

None

Other

Intuitive Surgical

Hansen Medical

Stereotaxis

% Aw are

Electrophysiologists Others

Majority (72%) of doctors are familiar with robotic assist technologies. Stereotaxis is the brand they are most aware of.

Electrophysiologists have a high awareness of Stereotaxis and HansenMedical.

Very Familiar

5%

Familiar

26%

Slightly Familiar

41%

Unfamiliar

28%

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End User Profile: Likelihood of Adopting Robotic Assist Technologies in the next 12 months

Likely NO

23%Equally Likely

(YES/NO)

23%

Very likely NO

14%

Definitely NO

10%

Definitely YES

8%

Very Likely YES

6%

Likely YES

16%

8% of institutions represented are definitely adopting robotic assist technologies and another 22% are likely or very likely to

adopt it.

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Conclusion

The introduction of image guided surgery and robotics assisted surgery has sparked a new revolution in the practice of medicine. The industry shift towards minimally invasive and laparoscopic procedures has been taken one step further with the introduction of these sophisticated systems.

They allow surgeons the ability to perform high risk procedures in the smallest of anatomy, successfully performing procedures that were nearly impossible a decade ago. As the video game generation of doctors continue to supplant older more traditional surgeons, look for the expertise and applicability for these systems to accelerate in adoption.

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For Additional Information

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