update likely within a week, page-57

re: great report...will be a good year The acquisition of MVL was completed approximately 12 months ago. It has been a year of considerable
progress and growth along the path to growing a company whose aim is to become a leading supplier and
developer of medical and surgical training tools, deploying the latest technology. The first year has been as
much about laying the proper foundations for the long-term development of a successful and profitable
business as about growing the sales revenue and pipeline. It is indeed pleasing that both have occurred and at
this stage we expect that sales for the financial year will show a doubling over the previous year.
REVIEW OF OPERATIONS
With what is currently in the pipeline we expect to be able to continue the pattern of previous years and
continue to double sales again in the next financial year. We are also working towards the position that during
the 2nd half of the next financial year, the MVL business should start to become cash flow positive. At this
stage, the investment and work undertaken over several years is expected to start paying real rewards, in
terms of market position as well as financially.
Medic Vision Pty Ltd (MVL)
Following is a review of operations of Medic Vision Pty Ltd, PulmoSonix Pty Ltd and Corporate Activities for the
2005/06 financial year.
MVL is committed to providing leading edge simulation devices and consulting services to the medical and
surgical teaching profession globally.
Over recent years, Medic Vision has made significant progress in establishing itself as a leading medical
simulation tools and education provider. The following provides a snapshot of the progress made in the last 12
months – a significant transitional year for the Company. In addition, this year has seen the Company move
from being solely a distribution and consulting company with agency lines to a full solutions provider with its
own R & D and product development team and program. Indeed, it is in the area of developing its own
products and selling these through existing distribution channels that MVL believes strong growth will continue.
PRODUCT SALES AND DISTRIBUTION ACTIVITIES
ASIA
MVL has recently completed a major sales and installation contract with the South West Hospital in
Chongqing, China. This contract is a multi-staged contract for the supply of surgical simulation and
consulting services to the hospital. The South West hospital is the leading hospital within the Chongqing
Province. A major benefit from this project is to introduce a leading and state of the art skills training
centre that can be showcased to the rest of the rapidly growing Chinese market.
MVL has completed a series of sales contracts covering a variety of simulation products for the Prince of
Wales Hospital in Hong Kong. This is a major surgical training institution for the region and a leading
health facility in Hong Kong. The simulators have been deployed within the surgical training centre which
MVL designed. This training centre, known as the ‘Minimally Invasive Surgical Skills Centre’ was opened
in November 2005. Within this training centre surgeons are able to practise operations using innovative
computer-based simulations. The centre also offers a complete simulated Operating Theatre (OT), where
OT teams can simulate real life procedures ahead of performing the actual operation.
MVL has also entered into an exclusive distribution agreement to sell the Ophthalmosurgical (‘Eyesi’)
simulator, developed by German Company, VR Magic, into the Asia Pacific region. This is a new product
targeting the ophthalmology market where, to date, VR training tools have not existed. This training tool
fits very well into the Medic Vision product range which can now service a market that previously had
been unreached with this type of simulated training.
In October last year MVL completed an agreement to provide surgical simulation products to the leading
health facility based in Macau, the Kiang Wu Hospital. This facility is operated by the Kiang Wu Charitable
Association and represents an important and a major step towards alternative training methods utilising
latest technology for surgical training for the hospital.
Several of the above installations represent the initial deployment of simulation technology. It is expected
that as this technology is used its more widespread take up in more hospitals and training centres is likely
to occur.
AUSTRALIA
MVL has in the last few months completed theatre integration installations at the Adelaide Women’s and
Children’s hospital and the Hervey Bay private hospital. MVL has been able to introduce new technologies
to these operating theatres which will enable the theatres to link into skills training centres. These
installations are part of MVL’s core competencies and will provide the basis for MVL to integrate their core
products within these hospitals.
A further integration project was announced in late March 2006 for a major Brisbane hospital. This
hospital establishes another point of connection for linking surgical procedures across different countries
or regions for demonstration and / or training purposes.
UK
MVL is currently also involved with the design of an important new skills training centre at the Alfred
Hospital in Melbourne.
In December 2005 MVL established a UK office and appointed a senior sales and marketing manager,
dedicated to servicing the growing UK and Irish markets where use of medical simulation is still in its early
stages of adoption but where a committed presence to capture a share of this growing market is
essential.
In April 2006 MVL announced the acquisition of Crawford Medical’s simulation consulting and re-selling
business. At the time of acquisition Crawford had an agency agreement with Immersion in the USA and
Surgical Science in Sweden. It also offered a range of training and consultancy services to medical
institutions. This acquisition gives MVL additional presence and spread into Europe. MVL will also acquire
increased manpower, marketing resources and importantly, access to an established client base and
pipeline of sales opportunities. The agreement now places MVL as one of the leading suppliers of
computer-based medical and surgical simulation equipment in the UK and Ireland.
On the 24th May 2006 MVL announced what is probably its most prestigious project, namely that the
Royal College of Surgeons in London have appointed MVL to provide consultancy services for the design
and development of their new skills training centre.
PREMIER BIONICS LIMITED ABN 67 099 084 143 4 of 23
PulmoSonix Pty Ltd
This project consists of four phases, with the first already underway. The project is designed to bring the
Royal College’s training techniques into the 21st century and is a strong endorsement for the range of
skills and experience that MVL brings to the marketplace and MVL’s position and reputation in this
growing industry.
PRODUCT DEVELOPMENT ACTIVITIES
On the 21st December 2005 MVL announced the launch of its proprietary Epidural Trainer/Simulator under the
trading name the ‘Mediseus Epidural’. This simulator is a world first and is aimed at being able to train
anaesthetists and others delivering the epidural procedure. Epidurals currently have a relatively high error rate
and this tool is designed specifically to improve the proficiency of those carrying out epidurals, with the result of
reducing mishaps associated with what is a tricky procedure requiring a hire degree of precision.
In March this year MVL announced a co-development project with the CSIRO and the University of Melbourne
to develop a temporal bone simulator. This simulator will enable Ear, Nose and Throat (ENT) surgeons to train
in major ear surgery including preparation for the implantation of assisted hearing devices, including the
cochlear ear implant device. At present, an advisory panel comprising international ENT luminaries is being
assembled which will oversee the development of this simulator and related curriculum. Their input will help to
ensure that the product is not only technically excellent but has the features and functionality that will help to
ensure that it is a commercial success and attractive to potential partners.
APPOINTMENTS OF ADDITIONAL PERSONNEL
The response from the user market to the simulator has been very positive. This was highlighted by the first
sale announcement of the simulator on the 30th December. To date, a key endorsement has come from
winning the Victorian section of Innovic “Next Big Thing” Award for 2006. This award is a national competition
to identify and showcase new products with the potential to become the next big thing. This prize confirms the
uniqueness of this product as well as highlighting the technical competence of MVL’s own product development
team. The sales team is currently marketing this product with sales expecting to ramp up in the new financial
year.
Another important project initiated during this period is the proposed development of the mass trauma
simulator with Hadasit, the technology and commercialisation arm of Hadassah Hospital in Jerusalem. This
Hospital is one of the leading institutions worldwide in regards to trauma management and treating victims of
mass casualty trauma events. As previously announced, the current training for mass trauma relies on reenactments
and role play which are limited in their deployment and the ability to create multiple scenarios. The
next generation of training within the field of mass trauma will rely on computer generated simulation tasks and
scenarios and will comprise various task oriented procedures.
A key part of building the MVL business has been the recruitment of additional suitable qualified and
experienced sales and marketing and technical people. The Company has been successful in securing a
number of talented individuals who have considerable experience in the medical equipment, sales and product
development fields. In growing this business globally it is essential to have a team with sufficient depth across
all key disciplines to ensure a successful and ultimately profitable expansion path is maintained.