Sale of InnerPulse, Inc.
Gerbsman Partners (www.gerbsmanpartners.com) has been retained by InnerPulse, Inc. (www.innerpulse.com) to solicit interest for the acquisition of all, or substantially all, the assets of InnerPulse, Inc.
Headquartered in Research Triangle Park, North Carolina, InnerPulse, Inc. is a cardiac rhythm management (CRM) medical device company founded in 2003 with disruptive technology which will likely change the industry by creating unique access to and delivering new growth in the existing $12 billion worldwide CRM market.
InnerPulse has raised three rounds of private financing to date totaling $85 million from both venture capital and strategic partners. Investors have included Delphi Ventures, Frazier Healthcare Ventures, Synergy Life Science Partners, Ascent Biomedical Ventures, as well as strategic investments from Boston Scientific, Johnson & Johnson Development Corp., and Medtronic.
IMPORTANT LEGAL NOTICE:
The information in this memorandum does not constitute the whole or any part of an offer or a contract.
The information contained in this memorandum relating to InnerPulse’s Assets has been supplied by InnerPulse. It has not been independently investigated or verified by Gerbsman Partners or its agents.
Potential purchasers should not rely on any information contained in this memorandum or provided by InnerPulse, or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.
InnerPulse, Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of InnerPulse’s or Gerbsman Partners’ negligence or otherwise.
Any sale of the InnerPulse Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of InnerPulse or Gerbsman Partners. Without limiting the generality of the foregoing, InnerPulse and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the InnerPulse Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.
This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.
InnerPulse has developed and patented a novel device platform technology, the fully intravascular implantable device (IID) that is extensible into all of CRM—single and dual chamber pacemakers, single and dual chamber defibrillators, and cardiac resynchronization therapy defibrillators. The platform is built upon industry-proven technology, yet innovated to allow physicians to implant devices via a standard percutaneous procedure rather than the traditional surgical technique. This dramatic change will simplify the implant for the physician and improve therapy access and outcomes for the patient.
InnerPulse believes its assets are attractive for a number of reasons
1. The InnerPulse fully intravascular, percutaneously implanted IID technology is revolutionary and disruptive, and can provide both market growth and market share in the large, $12 billion worldwide CRM market.
2. The InnerPulse novel form factor and intravascular implant location provide significant benefits over traditional CRM devices, yet utilize well-established, proven methods and therapy for pacing and defibrillation, with clinical evidence already existent, reimbursement in place, and clinical practice guidelines well-known.
3. InnerPulse’s Intellectual Property, comprising 7 issued US patents, 22 pending US patent applications, 2 issued international patents and 5 international pending patent applications, is the exclusive portfolio for the practice of fully intravascular implantable electrophysiological devices.
4. The company has significantly de-risked the technology by completing over 400 animal studies and an acute human study, demonstrating safety and efficacy of the technology to the fullest extent prior to chronic human clinical trials.
5. This unprecedented set of animal data, including peer-reviewed and published studies, is also augmented by an acute defibrillation threshold (DFT) human trial that demonstrated better defibrillation efficacy than traditional defibrillators and validated the implant procedure.
6. InnerPulse has developed a comprehensive strategic product plan with enabling technology pathways to enable the platform into all CRM products.
7. InnerPulse has developed the basic manufacturing processes required for its novel technology and has produced its percutaneous implantable cardioverter defibrillator (PICD™).
8. The world’s thought leaders in both electrophysiology and interventional cardiology have actively supported and advised the company since its inception.
9. The company has developed excellent relationships with several leading European cardiology centers that have participated in the Company’s acute human study and have indicated they will participate in its CE Mark trial.
InnerPulse Company Profile
InnerPulse, Inc. is located in Research Triangle Park, NC, and is a privately held company founded in December 2003. InnerPulse has raised three rounds of private financing to date totaling $85 million from both venture capital and strategic partners. Investors have included Delphi Ventures, Frazier Healthcare Ventures, Synergy Life Science Partners, Ascent Biomedical Ventures, as well as strategic investments from Boston Scientific, Johnson & Johnson Development Corp., and Medtronic.
The company has developed and manufactured the revolutionary IID platform technology, as well as developed percutaneous implant and removal procedures using custom catheter-based tools. The InnerPulse intravascular platform has been developed and evaluated extensively in over 400 animals to date, as well as with thorough bench and laboratory testing. Chronic safety has been demonstrated in animal studies over 1 year, and the Company has conducted acute human studies on the platform and procedure.
Impact of Technology on the Market
The percutaneously-implanted IID will compete in, and dramatically impact, the existing CRM market. InnerPulse will market both pacemaker and defibrillator product lines. With respect to the existing CRM devices on the market today, the InnerPulse devices are superior. The benefits include a simpler and faster procedure, reduced complications, device reliability advantages, and lower post-procedure discomfort.
Unlike current CRM devices, which are surgically implanted in a procedure that typically takes 35 minutes and requires an operating room, the InnerPulse fully intravascular pacemaker (PPx™) and defibrillator (PICD™) technology are implanted percutaneously utilizing a catheter-based procedure, which takes less than 15 minutes and can be performed in the cardiac catheterization laboratory. Additionally, the implant procedure is familiar to both electrophysiologists (who currently implant the majority of CRM devices) and other implanting cardiologists, and has significantly lower infection rates than surgical procedures. The intravascular device is also projected to deliver reliability advantages, including the virtual elimination of performance issues associated with cardiac leads and device headers. Because the IID does not require a surgical pocket, patients benefit through lower post-procedure discomfort and improved cosmesis. In the end, the device is imperceptible to the patient and will address known barriers to patient acceptance of an implanted device. The shortened procedure and improved cost efficiency of the cardiac catheterization lab will increase hospital and physician revenue by facilitating more procedures at higher margin.
Together, the benefits provided by the InnerPulse technology will appeal to all stakeholders—physicians, patients and hospitals, and will drive market acceptance.
InnerPulse’s Assets
InnerPulse has developed a portfolio of assets critical to the development and manufacture of its revolutionary, fully intravascular cardiac rhythm management device technology. These assets fall into a variety of categories, including:
– Patents, Patent Applications and Trademarks
– Significant intellectual capital, know-how and expertise in the design and manufacture of fully intravascular systems and the novel percutaneous implant and removal procedure
– Long-term strategic Product Plan including next generation product designs
– Design and quality assurance test equipment
– Fully-outfitted manufacturing equipment for the PICD™, the company’s fully intravascular implantable defibrillator
– Pre-clinical animal data including the following:
– Data from over 400 development animal studies
– Peer-reviewed, published animal data demonstrating superior defibrillation efficacy in porcine and canine
– Completed GLP studies on anchoring stability and vascular response
– A cohort of survival animals implanted over 1 year targeted for long-term removals required for regulatory submission
– Clinical data from the acute DFT human study
The assets of InnerPulse will be sold in whole or in part (collectively, the “InnerPulse Assets”). The sale of these assets is being conducted with the cooperation of InnerPulse. InnerPulse and its employees will be available to assist purchasers with due diligence and a prompt, efficient transition to new ownership. Notwithstanding the foregoing, InnerPulse should not be contacted directly without the prior consent of Gerbsman Partners.
The Sale of the InnerPulse Assets is being conducted pursuant to a Resolution of the Board of Directors of InnerPulse, Inc. for the liquidation and dissolution of the company which was approved by the Board on February 3, 2011, and by the stockholders on February 7, 2011. InnerPulse expects the sale of the InnerPulse Assets to be completed without any further vote or action by InnerPulse’s stockholders.
InnerPulse, Inc. Key Personnel
· Stephen C. Masson — General Manager & Chief Technology Officer: Has led the Company’s product development, product planning, operations, and relationships with key technology and funding partners, and consultants. Mr. Masson draws from 30 years experience in the design and manufacture of implantable medical devices, including pacemakers and defibrillators. Formerly Vice President of Product Development at Ventritex. Inc. (now a division of St. Jude Medical), where Mr. Masson was responsible for overseeing the team that created a series of highly advanced implantable cardiac devices, resulting in the company attaining as much as a 35-percent U.S. market share and more than $125 million in annual revenue. Previously, Mr. Masson was Vice President of Research and Development at HeartWare, Inc., a cardiac-assist device company, and began his career in at pacemaker manufacturer Cordis Corporation (now a division of Johnson & Johnson), where he held both design and management roles.
· Terry Ransbury — Vice President, Research & Development, Co-founder: The Company’s first employee, Mr. Ransbury has played a critical role in developing the company’s novel technology and intellectual property, including filing the patents for the platform technology and implantation techniques of the intravascular device. Mr. Ransbury has more than 25 years of management, product development and field experience in the medical device industry to his position. He was the principal designer of the medical instrumentation device for programming implantable defibrillators at Ventritex, Inc. As Clinical Manager at Biosense, he oversaw the field introduction of the industry-standard CARTO 3D electrophysiological mapping and ablation system. Each company was acquired for more than $350 million during his tenure.
· W. Eugene Sanders, MD — Vice President, Medical Affairs & Chief Medical Officer: Dr. Sanders has led the company’s medical affairs including clinical support of product and procedure development and management of the animal and early human clinical studies. Dr. Sanders joined the company after spending 15 years at the University of North Carolina-Chapel Hill as Director of Clinical Cardiac Electrophysiology. He has extensive experience in surgical implantation of defibrillators and pacemakers, as well as all aspects of arrhythmia management including ablation. Dr. Sanders has been a major investigator in multiple national clinical trials of implantable medical devices. His publications include articles in the New England Journal of Medicine, Journal of the American College of Cardiology, and Lancet in addition to several book chapters. He is board certified in Internal Medicine, Cardiovascular Disease, and Clinical Cardiac Electrophysiology.
· Julie Ames — Controller: Ms. Ames has over 25 years experience at the Controller level in corporate accounting and management. She has a broad background in all aspects of company operations including finance, budgeting and forecasting, cost controls, human resources, insurance, IT, staff management and corporate governance.
InnerPulse, Inc. Board of Directors
· John F. Maroney: Delphi Ventures – Menlo Park, CA
· Nathan R. Every, MD: Frazier Healthcare Ventures – Seattle, WA
The Bidding Process for Interested Buyers
Interested and qualified parties will be expected to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the InnerPulse Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of InnerPulse, Inc., Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and neither InnerPulse nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes any representations as to the accuracy or completeness of the same.
Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the InnerPulse Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than March 18, 2011 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) at InnerPulse’s office, located at 4025 Stirrup Creek Drive, #200, Research Triangle Park, NC 27703. Please also email steve@gerbsmanpartners.com with any bid.
Bids should identify those assets being tendered for in a specific and identifiable way. The attached InnerPulse fixed asset list may not be complete and Bidders interested in the InnerPulse Assets must submit a separate bid for such assets. Be specific as to the assets desired.
Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to InnerPulse, Inc.). The winning bidder will be notified within 3 business days after the Bid Deadline. Non-successful bidders will have their deposit returned to them.
InnerPulse reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale. Interested parties should understand that it is expected that the highest bid will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.
InnerPulse will require the successful bidder to close within 7 business days. Any or all of the assets of InnerPulse will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.
All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the InnerPulse Assets shall be the sole responsibility of the successful bidder and shall be paid to InnerPulse at the closing of each transaction.
For additional information, please see below and/or contact:
Steven R. Gerbsman
(415) 456-0628
steve@gerbsmanpartners.com
Kenneth Hardesty
(408) 591-7528
ken@gerbsmanpartners.com
Jim Skelton
(949) 466-7303
jim@gerbsmanpartners.com
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