TAVR & Reflections, page-4

You are right Quacker. I think we will persist with the option of valve reconstruction for the younger patients and yes we are considering building our own TAVR device.

It makes sense to see the TVAR device as being an option for those older patients where a less invasive operation is required.

Meanwhile we attack the younger market with reconstructions reducing the need for repeat operations.

I asked Wayne about licensing to the big guys in terms of using our ADAPT technology in their TAVR devices as I thought this would be an excellent way to access large revenues in a short space of time.

Unfortunately like all large companies they don't think they need us and think their own tissue works just fine. They are not interested in giving away margin to some upstart Australian company when they already have market share. Plus I suppose their may be a risk to admit their is a better tissue than their own as it may have implications for their other patch sales. So essentially they do not see it in their interest to licence from us.

So with the confidence that we have a superior tissue we have decided to see if we can get the engineering right and then enter this market on our own. It may be slow like it was / is with CC up against the big boys but eventually the data and results will win out. Then once we start eating some of their pie or the data makes it obvious that our product is clinically superior they will eventually take notice. Unfortunately for now we have to take that road to market and show the world what we have.

Fair play to Admedus and WP for backing our tecnology and attempt to take a new product into the market again up against the 800 pound gorillas. However, each time we do this and each year that passes and each patient that is operated on, our data grows and improves and our reputation and brand in the market develops. Over 5000 people walking around living better lives with ADAPT inside is nothing to sniff at it.

Each day that passes without complications or calcification, increases the value of this technology significantly. So we must sit and watch the momentum slowly build in our favour. Rest asured though, it will seriously tip in our favour at some stage and sales will grow rapidly off the back of that. Hence Wayne's target of 50% market share by 2020 which is a conservative target compared to his internal target. He wants to win and

"ADAPT is simply that good."