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Archive for the ‘National Venture Capital Association’ Category

SALE OF ALURE MEDICAL, INC.
Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Alure Medical, Inc. (www.AlureMedical.com) to solicit interest for the acquisition of all, or substantially all of, Alure Medical’s assets.

Headquartered in Santa Rosa, California, Alure Medical is a medical device company developing innovative product for minimally invasivecosmetic and reconstructive procedures.  Allure’s technology provides applications to various parts of the body, including breasts, buttocks, thighs, etc.

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 Alure Medical’s Assets (as defined herein) has been supplied by Alure Medical.  It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by 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.

Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, andcompleteness 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 Alure Medical’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the Alure Medical Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either expressed orimplied, of any kind, nature, or type whatsoever from, or on behalf of Alure Medical and Gerbsman Partners. Without limiting the generality of the foregoing, Alure Medical and Gerbsman Partners and their respective staff, agents, andattorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Alure Medical Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, theimplied 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. Thismemorandum and the information contained herein are subject to the Confidential Disclosure Agreement attached hereto as Appendix A.

Company Profile

Alure Medical, Inc., a Santa Rosa, California based medical device company, develops innovative products for minimally invasive cosmetic and reconstructive procedures.  The company’s main product is the minimally invasive internal suspension systems that support soft tissue naturally from within.  The company has one (1) issued U.S. patent (Nov 2010), four (4) pending U.S. patent applications, and three (3) pending foreign PCT applications.

Alure Medical was founded in 2007 and has raised $5.5 million in capital financing.  Alure Medical’s mission is to develop minimally invasive solutions for enhancing cosmetic and reconstructive procedures.   The body changes significantly during one’s lifetime and many are seeking for ways to correct or regain a youthful, aesthetic appearance.  Most options are invasive surgeries, while other options have limited effectiveness.

Everyone is affected by ptosis (drooping/sagging) which is part of the natural aging process.  Ptosis is often exaggerated after child birth and other weight fluctuations.  Others have asymmetry due to genetics or previous procedures like mastectomies or otherbreast reconstruction.  The Alure technology provides a unique and elegant approach to aesthetic procedures in an effective, minimally invasive system.

The core of Alure Medical’s technology is the Alure Medical RefineTM device.  The device kit consists of two sets of implantable mesh and sutures lines.  In addition, the kit comes with two delivery needles and a handle that will aid the physician in delivering the implantable components.  The product is packaged and delivered sterilized via e-beam radiation.  The system has proven to be an effective, easy-to-learn, and easy-to-use product for patients who desire a change to their breast shape and position.   The product has not been tested in other areas of the body but a high level of interest has been communicated to thecompany.  These new areas include buttocks, thighs, and other soft tissue areas that are troublesome for patients and their physicians.

AVIDEO IS AVAILABLE DESCRIBING THE ALURE MEDICAL REFINE DEVICE UPON REQUEST WITH A SIGNED NON-DISCLOSURE AGREEMENT

 
Alure Medical believes its assets are attractive for a number of reasons:

·    Alure Medical’s intellectual property based on Minimally Invasive Tissue Support and Non Augmentative Mastopexy, includes one (1) issued U.S. patent (Nov 2010), four (4) pending U.S. patent applications, and three (3) pending foreign applications in each of Australia, Canada, and Europe.

·    US FDA 510(k) clearances 2009 (K08312) and 2010 (K092538):  The Refine™ Support System is indicated for reinforcement of soft tissue in plastic or reconstructive procedures.

·    CE Mark 2008:  The Refine™ Lift System is indicated for use in the approximation of soft tissue including, but not limited to the breast, mid-face, forehead, neck, jowls, and buttocks.

·    Alure Medical is being sold in US and Europe.

·    Longest term Alure cases now implanted 3.5+ years.

·    Alure Medical implant procedures exceed 100+ cases to date.

·    Three (3) internationally renowned plastic surgeons have actively supported, implanted, and purchased Alure Medical’s devices.

·    Alure Medical has sold over 60 units with an ASP of $800+, for a kit.

·    Two US surgical sites have reimbursement approval (hospital pay).

·    Recent sites have paid training fees of $500 each.

·    Alure Medical has achieved ISO 13485 certification.

·    Alure Medical has received California FDB (Food and Drug Branch) approval.

·    Alure Medical is vertically integrated with the majority of the assembly in-house and easily scalable.

·  Alure Medical believes suspension technology is applicable forother markets inside the plastic surgery field, and also applies into non-surgical cosmetic field and other non-cosmetic clinical procedures, such as wound therapy.

Impact of Technology on the Market

Many procedures performed by plastic surgeons are limited by their tools of scalpels, sutures, and augmentation implants.  There is a universal desire from physicians and patients to achieve aesthetic results with the minimal amount of noticeable scarring, while maintaining a natural appearance.  A clinical need exists for a specialized device to help reinforce, support, and manipulate soft tissue from small entry sites.

Specific to the breast surgery field, physicians and patients desire a minimally invasive method of performing mastopexy that allows faster recovery and less post-operative pain as compared to traditional surgical methods.  Market research indicates that approximately 90,000 traditional mastopexy procedures, 80,000 breast reductions, and 300,000 breast augmentation surgeries are performed each year in the US alone.  In the US, there are also about 4,000,000 previous breast implant patients, and 1,000,000 previous breast lift patients.  Feedback demonstrates there is also a potentially large “new market” of patients that are dissatisfied with their body, but do nothing.  Many know their options are invasive surgery or breast implants, which are not acceptable.  The company estimates that there could be 7,500,000 “new market” patients in the US alone that would consider using this technology.  Considering all theprocedures numbers above, the global market is estimated as 2X the size of the US market.

Physician feedback indicates that a significant percentage of their cases would utilize the Alure device instead of their surgical procedure and would also use thedevice in conjunction (adjunctively) with their surgical procedure.  The previous breast surgery patients may also want a quicker, less obtrusive revision to refresh their look.  Within a few years, this minimally invasive option is expected to capture 100,000 procedures per year, when penetrationreaches 0.5% of the market.  This conservative 0.5% penetration would equate to $60,000,000 dollars in global sales.

Intellectual Property Summary

1.  Alure Medical’s intellectual property based on Minimally Invasive Tissue Support and Non Augmentative Mastopexy, includes one (1) issued U.S. patent (Nov 2010), four (4) pending U.S. patent applications, and three (3) pending foreign applications in each of Australia, Canada, and Europe, each as more specifically described in Intellectual Property section.  The portfolio represents a broad array of strategic variables including:

2.  Alure IP covers an internal suspension implantation system for performing a breast tissue lift.

3.  Alure issued IP uniquely has an upper fixation mesh and lower soft tissue anchors.  This is comparison to other lower sling “internal bra”, concepts, that have not proven effective via a minimally invasive approach.

4.  Alure issued IP covers fixation points in soft tissue.  This creates natural look and a natural suspension.  This is compared to the disadvantages of fixing into rigid clavicle or ribs.

5.  Alure IP generated around post implanted adjustability mechanisms- able to adjust and correct a device that has been previously implanted.

6.  Alure IP generated around durable and bioabsorbable internal suspension components.
7.  Alure IP generated on a variety of other internal suspension concepts.

Alure Medical’s Assets

Alure Medical has developed a technology portfolio that delivers a product platform for adjunct and stand-alone use in cosmetic and reconstruction procedures.  It is a simple technology that physicians are creatively expanding to new indications.  These assets fall into a variety of categories, including:

·     Patents, patent applications, and trademarks

·     Regulatory approvals in US and Europe

·     Technology addressing in the billion dollar market of aesthetics

·     Established customer revenue with surgeon/patient sales

·     Established hospital pay

·     The only minimally invasive internal fixation system that works

·     Positive long term clinical feedback from top surgeons and their patients

·     Next generation product designs

·     Manufacturing and equipment developed internally and easily scalable

·     Intellectual capital and expertise

The assets of Alure Medical will be sold in whole or in part (collectively, the “AlureMedical Assets”). The sale of these assets is being conducted with the cooperation of Alure Medical. Alure Medical and its employees will be available to assist purchasers with due diligence and a prompt, efficient transition to new ownership. Notwithstanding the foregoing, Alure Medical should not be contacted directly without the prior consent of Gerbsman Partners.

Management

Michael J. Lee
VP of Research and Development
Head of Operations

Mr. Lee has headed Alure R&D and Operations since April 2009.  He has more than 18 years of medical device experience.  Prior to Alure, Mr. Lee headed Medlogics, a drug eluting coatings and stent company, in the areas of R&D, Engineering, Equipment, and Facilities since August 2003. Prior to Medlogics, Mr. Lee was the Director of R&D of Bioheart’s hybrid percutaneous, thoracoscopic, and surgical myocardial regeneration injection systems, where he started and headed the delivery system division.  Prior to Bioheart, Mr. Lee was in R&D for Cardeon Corporation, responsible for research and development of innovative blood return cannulae with cerebral protection using differential flow and temperature. Prior to Cardeon, he was in R&D for Arterial Vascular Engineering, Inc. (subsequently acquired by Medtronic, Inc) working on stents, stent delivery systems and angioplasty devices for coronary and peripheral indications; and was instrumental in the growth from about 30 to 3000 employees over 4 years.  Prior to AVE, he worked in R&D at Cardiac Pathways Corporation (subsequently acquired by Boston Scientific Corp.) on innovative electrophysiology systems with integrated cooling. Mr. Lee has several patents issued and several that are pending.  He has a B.S. in Mechanical Engineering from California Polytechnic State University, San Luis Obispo.

Board of Directors

Randy Lashinki

Mr. Lashinski is a co-founder of Alure Medical, served as President and CEO, and currently is Chairman of the Board.   Mr. Lashinski is currently Claret Medical’s President and CEO.  Mr. Lashinski was also a co-founder of Direct Flow Medical a percutaneous aortic valve replacement company.  Acting as the CEO for Direct Flow’s first two years he raised $8.5 million in funding to achieve clinical use of the product which is now in a European Clinical Trial.  Mr. Lashinski also was a founding engineer and served on the board of directors at MitraLife where he helped develop a device based treatment for congestive heart failure.  The company was sold to EV3 in Minneapolis in 2003.  Prior to this was he VP of R&D at Medtronic Vascular (AVE).  This division was spawned from the $4.3 billion dollar acquisition of AVE where Mr. Lashinski held other roles in Engineering and Management.  Mr. Lashinski was also employed as an R&D engineer atTarget Therapeutics which was acquired by Boston Scientific in 1999 for $1.1 billion dollars.  Mr. Lashinski received his education from the University of Minnesota in Mechanical Engineering.

Gordon Bishop

Mr. Bishop co-founded Alure in 2007.  A serial entrepreneur Mr. Bishop also co-founded Direct Flow Medical in June 2004.  Mr. Bishop was recruited to Arterial Vascular Engineering, Inc. (AVE) in 1999 where he lead various stent projects including the Driver™ stent currently on the market in the US and Europe.  In addition to leading the Driver stent Project at AVE, Mr. Bishop served on the ASTM F04 committee alongside agents of the FDA and other industry representatives to establish standards for stenttesting and modeling.  Hired as a Senior Engineer at MitraLife, Inc,. Mr. Bishop was a lead engineer on a novel percutaneous approach to lessen mitral regurgitation by implanting a deviceinto the coronary sinus.  MitraLife was acquired by ev3, Inc. a Minneapolis based company.  Mr. Bishop has a B.S. degree in Mechanical Engineering from California Polytechnic State.

Michael DeVries

Mike is a Managing Director with EDF Ventures. Mike’s 25-year medical device background, coupled with his experience with venture-backed companies, gives him a valuable perspective in guiding start-ups in the medical device industry.  Currently, Mike sits on the boards of the following companies:  Alure Medical, BioSurface Engineering Technologies, and CardioMetrix.  He serves as Chairman of the board for the following companies:  Direct Flow Medical, Sonoma Orthopedic Products, and TransCorp, Inc.  Prior to joining EDF, Mike served as President and CEO of A-Med Systems, a California-based cardiac device company. Prior to A-Med, Mike served on theexecutive team of Medtronic’s venture organization focused on cardiac surgery technology. His background also includes serving on the management team at DLP, a Michigan-based cardiac device company which was acquired by Medtronic.  Mike holds an MBA from Grand Valley State University and a BA from Calvin College. In addition, Mike is a Kauffman Fellow.

Dennis Condon

Mr. Condon has been President and Chief Business Officer of Merz Aesthetics since June 2007 and served as a board of director from January 2004 to June 2007. From March 2006 to June 2007, he was the Chief Executive Officer and President of Apsara Medical, a medical device company focused on the aesthetics market. From February 2005 to November 2005, Mr. Condon was the President and Chief Executive Officer of Reliant Technologies Inc., a provider of lasers for aesthetic applications. Since November 2002, Mr. Condon has also served as a principal of a privately-held medical aesthetics services practice. From 1998 to July 2002, he was Chief Executive Officer of The Plastic Surgery Company, a healthcare services company. From 1991 to 1998, he was President of Mentor Corporation’s aesthetics division. Mr. Condon holds a B.S. from the University of California, Davis

Josh Siegel

Joshua Siegel, MD is the Sports Medicine Director at Access Sports Medicine & Orthopaedics in Exeter, NH.  Dr. Siegel has pioneered techniques in arthroscopic surgical treatments of the knee, shoulder and elbow.  He is a fellow of the American Board of Orthopaedic Surgeons, and a member of the American Orthopedic Society for Sports Medicine (AOSSM), the Arthroscopy Association of North America, and the Sports Medicine Fellowship Society.  He is also a founding member of Northeast Surgical Care, an ambulatory surgery center in Newington, NH.  He completed his sports medicine fellowship at the American Sports Medicine Institute in Birmingham, Alabama under Dr. James Andrews and Dr. William Clancy.  He currently serves as a US Ski and Snowboard Team physician and is also serves as a physcian for the US Olympic Committee.  He has won numerous awards for medical and business accomplishments nationally and statewide.

Scientific Advisory Board

Jack Fisher, M.D.

Dr. Fisher is currently the Treasurer of The American Society for Aesthetic Plastic Surgery (ASAPS), and will be President of the Society in 2013.  Dr. Fisher is a distinguished member of the American Board of Plastic Surgery (ABPS) and The American Society of Plastic Surgeons (ASPS).  He also is currently on the ASAPS Board of Education Committee.  Throughout the country, Dr. Jack Fisher is a well-known and respected surgeon. He has been invited to speak at a number of surgical conferences throughout the world particularly on breast and aesthetic surgery. He is also an Associate Clinical Professor of Plastic Surgery at the prestigious Vanderbilt University Medical Center in Nashville, TN.  Dr. Fisher received his medical degree from the Emory University School of Medicine inAtlanta, completed his internships and residencies in general surgery at George Washington University Medical Center and his plastic surgery residency at Emory University Affiliated Hospital. Following his residency, he was on staff at the Mayo Clinic in Rochester, MN, from 1981 to 1986 as attending plastic surgeon.

Dennis Hammond, M.D.
ASAPS Chairman, Symposium Committee
James Namnoum, M.D.
Co-Chair of Atlanta Breast Symposium, (Top Global Breast Surgery Meeting)

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix A) to have access to key members of management and intellectual capital teams and the due diligence “war room” documentation (“Due Diligence Access”), and the Alure Video. 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 had an opportunity to inspect and examine the Alure Medical 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 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 Gerbsman Partners (and their respective staff, agents, or attorneys) do not make any representations as to the accuracy orcompleteness 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 Alure Medical Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than Wednesday, November 2, 2011 at 2:00pm Pacific Daylight Time (the “Bid Deadline”) at Alure Medical’s office, located at 3637 Westwind Boulevard, Suite B, Santa Rosa, California 95403. Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way. In particular, please identify separately certain equipment or other fixed assets.

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.  All bids must be accompanied by a refundable deposit in the amount of$200,000 (payable to Alure Medical, Inc.).  The deposit should be wired to Alure Medical’s attorneys Wilson, Sonsini, Goodrich & Rosati.  The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by Alure Medical’s counsel.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder.

Alure Medical 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 and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

Alure Medical will require the successful bidder to close within a 7 day period. Any or all of the assets of Alure Medical 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 Alure Medical Assets shall be the sole responsibility of the successful bidder and shall be paid to Alure Medical at the closing of each transaction.

For additional information, please see below and/or contact:

Steven R. Gerbsman
Gerbsman Partners
(415) 456-0628
steve@gerbsmanpartners.com

Kenneth Hardesty
Gerbsman Partners
(408) 591-7528
ken@gerbsmanpartners.com

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Based on the strategic growth and access to the Brazilian market, Gerbsman Partners has established a “strategic relationship” with a Brazilian medical device manufacturing and distribution company.   This 24 year old wholly owned family company, is seeking additional product opportunities in the medical device, technology and low tech areas, for manufacturing, licensing and/or distribution.

With the significant growth in Brazil (190 million people) and South American and with The World Cup and The Olympics coming to Brazil, this BRIC country is growing at a significant pace and can offer US, Israeli and European companies “access” to a a highly desirable market.

The company presently is profitable, has no debt, complies with all local regulatory aspects, has international quality manufacturing certification for medical devices, a direct sales and distribution network in place, access to other European and Asian markets and strategic alliances with other Brazilian high and low tech Brazilian companies.

History

The company was founded in 1988 by a leading Doctor and Lawyer/Business Person and was the first company to manufacture and commercialize the Women’s Health Products (Disposable Vaginal Specula (instrument used by the Gynecologists to examine their patients) in Brazil.  Encouraged by the success of its first product, the company launched other disposable medical devices to substitute the reusable ones, i.e. Anuscopes, Sigmoidoscopes, Forceps, etc. For over 22 years the company has been the absolute leader in all the markets in which it competes.

The company is presently divided into 2 business units. The first one, the core of the company, manufactures and commercializes disposable medical products. The company has its own production plant and a solid distribution network throughout the country composed of its own sales team, distributors and sales reps. (5 sales reps and over 400 distributors).

The other unit was created in 2004 and distributes medical products from an American company focused on Women’s Health. This unit is seeking to identify additional products through licensing or manufacturing.

The company also exports to France, England, Poland, Chile, India and Portugal.

The company is building a new production facility to increase its capacity and also to be open and ready to opportunities of manufacturing new products in Brazil. The new facility will have 50.000 square feet divided as follow:

  • 7.000 square feet for plastic Injection
  • 6.000 square feet for packaging
  • 6.000 square feet for assembling
  • 15.000 square feet still open for new products/projects

The company has high quality and well preserved machines for plastic injection, extrusion, cervical brush manufacture, gloves and packaging.

The company has all the international quality certificates to manufacture and distribute medical products, i.e. GMP, ISO 9001:2008, ISO 13485:2004 and CE Mark and it is also in compliance with all rules and regulations of the local health agency called ANVISA. The company has no debt, is profitable and has sales revenues in excess of $ 16 million US dollars.  Along with the founders, the company has added their son to the executive team.  He is a recent MBA graduate in the US and has domain expertise in finance and engineering with major Fortune 500 companies.

As indicated above, Gerbsman Partners is seeking to identify interested companies seeking to access the Brazilian market in the medical device, technology and/or low tech areas.  This access would be through licensing, joint venture, distribution and/or manufacturing.

Please call me to discuss your interest and I will set up a dialog directly with the company.

Best regards

Steve Gerbsman

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Update to the Bidding Process – Procedures for the sale of certain assets of InnerPulse, Inc.

Further to Gerbsman Partners e-mail of February 23, 2011 and February 14, 2011 regarding the sale of certain assets of InnerPulse, Inc., I attach the legal documents and wire transfer information that we will be requesting of bidders for certain assets of InnerPulse, Inc.  All parties bidding on the assets are encouraged, to the greatest extent possible, to conform the terms of their bids to the terms and form of the attached agreements.  Any and all of the assets of InnerPulse, Inc. will be sold on an “as is, where is” basis.  I would also encourage all interested parties to have their counsel speak with Fred D. Hutchison, Esq., counsel to InnerPulse, Inc.

The refundable deposit/wire transfer, will be held in the trust account at Hutchison Law Group and will be refunded back to interested parties that are not chosen as the winning bidder.

For additional information please contact Fred D. Hutchison Esq., of Hutchison Law Group, counsel to InnerPulse, Inc.  He can be reached at 919 829 4300  and/or   fhutchison@hutchlaw.com

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.

For your convenience, I have restated the description of the Updated Bidding Process.

The key dates and terms include:

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:

Fred D. Hutchison, Esq.
(919) 829-4300
fhutchison@hutchlaw.com

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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San Francisco, February, 2011

Successful “Date Certain M&A” of Medical Device companies, its Assets and Intellectual Property

Steven R. Gerbsman, Principal of Gerbsman Partners, Kenneth Hardesty, James Skelton, James McHugh and Dennis Sholl, members of Gerbsman Partners Board of Intellectual Capital, announced today their success in maximizing stakeholder value for two venture capital backed, medical device companies. These companies were in the obesity and cardiac mitral regurgitation spaces.

Gerbsman Partners provided Crisis Management and Investment Banking leadership, facilitated the sale of the business unit’s assets and its associated Intellectual Property. Due to market conditions, the board of directors made the strategic decision to maximize the value of the business unit and Intellectual Property. Gerbsman Partners provided leadership to the company with:

1,  Crisis Management and medical device domain expertise in developing the strategic action plans for maximizing value of the business unit, Intellectual Property and assets;
2.  Proven domain expertise in maximizing the value of the business unit and Intellectual Property through a Gerbsman Partners targeted and proprietary “Date Certain M&A Process”;
3.  The ability to “Manage the Process” among potential Acquirers, Lawyers, Creditors Management and Advisors;
4.  The proven ability to “Drive” toward successful closure for all parties at interest.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 67 Technology, Life Science and Medical Device companies and their Intellectual Property and has restructured/terminated over $795 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception in 1980, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in San Francisco, Boston, New York, Washington, DC, Alexandria, VA, Europe and Israel.

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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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