Luther Needlesafe Products, Inc.lnpinc.net/assets/LNP_Investment_Brochure.pdf · Exhibit 3.1:...

Luther Needlesafe Products, Inc.

Mini-Midline™ Extended Dwell Peripheral IV Safety Catheter

PRIVATE & CONFIDENTIAL

Executive Summary 1

Company Overview 2 Investment Considerations 2

Investment Considerations 3 Innovative, Proprietary Product Design 4 Product Patent Portfolio 6 Significant Customer Value Proposition 7 Meaningful Patient Benefits 8 Large Market Opportunity 8

Company Overview 10 History and Background 11 Product Overview 11 Product Manufacturing 13 Management Biography 13

Industry Overview 14 Macro-Economic Trends 15 Acute Care Industry 17 Catheter Market Overview 17 Catheter Market Competitive Landscape 18

Appendices 20 Appendix 1: Patent & Trademark Portfolio 21

Table of Contents

ii

Exhibit 2.1: Soft Catheter Design 4 Exhibit 2.2: Over-the-Needle Insertion Capability 4 Exhibit 2.3: Flashback Chamber and Index Finger Insertion Tab 5 Exhibit 2.4: Catheter Passive Safety Mechanisms 5 Exhibit 2.5: Protective Needle Sheath 6 Exhibit 2.6: Slit Value Design 6 Exhibit 3.1: Catheter Comparison 12 Exhibit 3.2: MINI-MIDLINE™ Key Features 13 Exhibit 4.1: Healthcare Expenditures Per Capita 15 Exhibit 4.2: Historical and Projected U.S. Aging Population 16 Exhibit 4.3: Venous Access Device Manufacturing 18 Exhibit 4.4: Catheter Market Competitive Landscape 18

Table of Exhibits

Executive Summary

Luther Needlesafe Products, Inc. CONFIDENTIAL 1

Section 1

Executive Summary

Executive Summary


Luther Needlesafe Products, Inc. has developed an innovative peripheral intravenous (“IV”) safety catheter product, the MINI-MIDLINE™ Extended Dwell Peripheral IV Safety Catheter (the “MMC” or the “Product”) that combines the extended in vivo dwell time of a midline catheter with the ease of insertion of a traditional peripheral IV catheter. The owner of the MMC will be able to capture/maintain a significant share of the short peripheral IV and midline catheter markets.

• Only patented short, soft catheter to use an over-the-needle patient delivery method. • Only patented short, soft catheter to receive Food and Drug Administration (“FDA”) approval for

inpatient dwell times of up to 29 days. • Able to de-commoditize the industry, replacing all existing short and most midline catheters on the

market.

The MMC features design improvements and passive safety mechanisms that reduce the likelihood of accidental needle sticks and/or exposure to blood residue. The MMC has passed all biocompatibility and clinician testing. In April 2013, the FDA granted 510(k) (K130518) approval to the device with the following indications of use:

“The MINI-MIDLINE™ Extended Dwell Safety Catheter is inserted into a patient’s vascular system for short term use (<30 days) to sample blood or administer fluids intravenously. These catheters may be used for any patient population with consideration given to the adequacy of vascular anatomy and appropriateness of the procedure.”

The MMC’s innovative product design, advanced features and indicated use present several key investment considerations.

• Product design that allows clinicians to deliver a soft catheter using over-the-needle insertion techniques.

• Passive safety mechanisms that protect clinicians against accidental needle sticks as well as blood residue on the retracted needle.

• Luther’s patents cover the design and use of the catheter body, safety mechanism and insertion. • Compelling customer value proposition resulting from meaningful cost savings of approximately

$20 per peripheral catheter change and over $100 if substituted for a midline catheter (based on clinician interviews and internal estimates) as a result of dwell times of up to 29 days, improved safety features and reduced training requirements.

• Improved patient comfort from less frequent catheter changes and a reduced risk of infection. • Large and growing catheter market opportunity with significant industry tailwinds – U.S.,

worldwide, and developing nations.

Company Overview

Investment Considerations



Section 2




The MMC was designed to provide significant improvements over existing peripheral IV catheters. The MMC combines the dwell time of a midline device with the convenience of a peripheral IV catheter. The innovative design features include:

• Soft, Short IV Catheter – The MMC is the first and only patented short, peripheral catheter to utilize a soft catheter body design with a traditional over-the-needle insertion system. The MMC soft catheter body is made of a more flexible, less invasive material significantly increasing its approved in vivo dwell time, up to 29 days, compared to traditional short peripheral catheters with approved dwell times of up to 96 hours. Until the MMC, soft catheter technology has been limited to midline and central catheters. Traditional short, peripheral catheters feature a completely rigid catheter typically made of a hard Teflon® cannula (typical hardness Shore 99A). The MMC’s soft, flexible design reduces complications caused by rigid catheters, such as inflammation, phlebitis and the risk of a stiff catheter penetrating the wall of a patient’s vein.

Exhibit 2.1: Soft Catheter Design

• Simple Insertion Process – The MMC utilizes a hard tip blended to a soft catheter body to provide proper catheter insertion and placement using an over-the-needle delivery system. This patented design and unique tip manufacturing process provides for easy and accurate insertion and prevents the soft catheter from binding or bunching (accordion affect). The MMC, unlike traditional midline and central catheters, can be inserted into a patient without the need for a guide wire or stylet to verify position. The distal end of the MMC can rest below the antecubital region, in the lower arm (hand or wrist) of the patient unlike midline or central catheters that are required to finish in the upper arm or vena cava.

Exhibit 2.2: Over-the-Needle Insertion Capability

Innovative, Proprietary Product Design

Blunt Cannula Hard tip blended into soft body

Made of more flexible, less invasive materials, the MMC catheter is approved for in vivo use up to 29 days

Blunt cannula pushes against the hard tip ensuring successful insertion of the soft body catheter

Needle



Exhibit 2.3: Flashback Chamber and Index Finger Insertion Tab

• Passive Safety Design – The MMC was designed with passive safety mechanisms. The catheter needle is automatically protected as it is withdrawn from the patient. Traditional safety catheters require manual sealing of the used needle by the clinician. This less desirable active safety mechanism design can be defeated if not properly used by the clinician. During an active needle retraction process the clinician is more likely to suffer an accidental needle stick than with a device that utilizes passive safety mechanisms, such as the MMC. The MMC design features locking mechanisms that secure both the distal and proximal ends of the needle, ensuring that the safety mechanisms cannot be accidentally defeated or manually reset.

Exhibit 2.4: Catheter Passive Safety Mechanisms

• Blood Residue Protection – The passive safety design of the MMC also reduces the clinician’s exposure to patient blood residue. As the needle is retracted, the protective sheath traps the blood residue. This reduces the chance that a clinician may come in contact with the patient’s blood.

Flashback Chamber: Provides a visual confirmation when the needle has punctured the vein

Index Finger Insertion Tab: A stationary platform to push against to make one-handed operation easier

The distal needle lock automatically secures the finger slide at the back of the protective sheath

The proximal needle lock automatically snaps into place, securing the bloody needle, when the catheter retention jaws open to release the catheter hub

Detached catheter hub



Exhibit 2.5: Protective Needle Sheath

• Slit Valve – As blood flows around a catheter within a vein, the tip can become occluded and

impede the flow of IV fluid into the patient. This requires traditional catheters to be frequently flushed to prevent occlusion and blood clotting. If clots have already formed, an IV flush has the potential to dislodge a clot. This can cause severe side effects as the clot travels through the vascular system. The MMC’s design can accommodate a slit valve (Luther’s slit valve patent is pending) on the side of the soft catheter body near the tip. The slit valve allows for the uninterrupted flow of IV fluid, even if the tip of the catheter has been occluded.

Exhibit 2.6: Slit Value Design

The MMC is supported by a strong patent portfolio. Issued or filed patents (see Appendix 1) cover all aspects of the MMC’s design and construction, including the catheter body, safety mechanism, and insertion technique. The Company holds an additional patent entitled “Flush Entrance Hemostasis Valve with Unobstructed Passageway” and has a patent pending for a safety subcutaneous needle device which is expected to be granted later in 2014.

Product Patent Portfolio

The bloody needle is contained within a protective sheath between the distal and proximal needle locks

Slit valve (normally closed) ensures that any blockage of the catheter tip will not interrupt IV flow



The MMC presents a value proposition to customers unmatched by competing products. By offering a longer dwell time in vivo (FDA approved for up to 29 days) and an improved passive safety system, the MMC can reduce direct IV product costs, labor costs, costs associated with accidental needle sticks and costs related to patient complications and infections.

• Dwell Time – The average peripheral IV catheter has an approved dwell time of approximately 96 hours (4-5 days). The MMC’s indicated use dwell time of up to 29 days eliminates the need for catheter changes versus a traditional peripheral catheter by almost 5 times. This is estimated to save hospitals $20 per peripheral catheter change. Moreover, the MMC’s dwell time matches that of midline catheters. For instances where the MMC is used in lieu of a midline catheter, the estimated cost savings to the hospital is over $100.

Product cost savings include a reduction in the number peripheral IV catheters purchased, as well as a reduction in the number of more expensive midline catheters required. In addition, healthcare facilities save clinician time as a result of less frequent catheter changes and the reduced likelihood of patient infections from fewer venipunctures. IBISWorld estimates that the cost of a catheter-related bloodstream infection (“CRBSI”) is between $3,700 and $29,000. Reducing the number of catheter changes and CRBSIs, allows a healthcare facility’s staff to work cost effectively and more efficiently by focusing on patient treatments and monitoring, without having to spend time with IV catheter changes and complications.

• Improved Safety Features – By offering passive safety technology, the MMC greatly reduces the likelihood of accidental needle sticks and inadvertent contact with blood residue. The American Nurses Association estimates that between 600,000 and 800,000 accidental needle sticks occur each year. Approximately 27% of accidental needle injuries occur when the needle is being manipulated within the patient and over 40% of injuries occur after patient usage. In addition, surveys by The Centers for Disease Control and Prevention (the “CDC”) indicate that 50% of needlesticks are not reported. These accidents can range from minor injuries to the contraction of serious diseases, such as HIV, hepatitis B, hepatitis C, and other bloodborne diseases. The CDC estimates that the cost of a routine needle stick is between $500 and $3,000. These cost estimates only include the treatment of the actual needle stick and the associated blood testing and analysis required. If a clinician contracts a disease, the American Hospital Association estimates the lifetime costs associated with an individual needle stick incident can run into the millions of dollars.

• No Training Requirements – Traditional catheters with active safety mechanisms require training

of clinician staff in product usage and safety. Traditional catheters can be accidentally reset by clinicians offering the possibility of accidental needle sticks. The passive mechanism of the MMC requires less clinician training on proper product handling, usage, and safety. The MMC’s passive design ensures the needle is automatically secured in a protective sheath following patient insertion, requiring no clinician manipulation or excess handling to properly safety the

Significant Customer Value Proposition



device. Locks at both the proximal and distal ends of the MMC ensure that the needle cannot be reset or the safety position defeated.

• Reduction in Reimbursement as a Result of Patient Complications – As the healthcare industry

changes to a “pay-for-performance” model and risk shifts to healthcare providers, organizations are under increased scrutiny to prevent patient complications and readmission. The longer dwell times and slit valve features are important innovations helping to improve patient outcomes and reduce patient complications – keys to maximizing provider reimbursement dollars.

In addition to providing significant benefits and cost savings to healthcare facilities and clinicians, the MMC offers meaningful benefits to patients.

• Reduced Risk of Infection – Multiple venipunctures as a result of frequent catheter changes can increase the likelihood of a patient developing an infection. Infections are often difficult to observe in patients with dark skin, leading to increased risk of complications. Moreover, infections in elderly and pediatric patients can be serious. The MMC’s FDA approved dwell time of up to 29 days helps to reduce the likelihood of infections by reducing the frequency of catheter changes by a conservative factor of approximately 5x (up to 29 days for the MMC versus approximately 5 days for traditional peripheral IV catheters).

• Reduced Risk of Phlebitis – Traditional short, peripheral catheters feature a hard Teflon® catheter

inserted into the vein. These rigid catheters can irritate the interior wall of the vein. In certain cases, the hard catheter can rupture the interior vein wall leading to internal bleeding, bruising and blood clots. Elderly and pediatric patients are at an increased risk of catheter irritation given the often delicate and small nature of their veins. The soft body of the MMC provides less irritation to the vein wall, reducing the likelihood of phlebitis or ruptures.

• Improved Patient Comfort – In addition to the medical benefits related to the MMC’s extended

dwell time, the MMC offers significant improvements in patient comfort. Less catheter changes mean less venipunctures. With a single venipuncture, the MMC can meet the infusion therapy needs of a patient for up to 29 days. By using the MMC in place of a midline catheter, the device can be placed in the lower wrist of hand – a more comfortable location. This reduces discomfort and improves the quality of care experienced by the patient.

The MMC presents the unique opportunity to acquire the only patented extended-dwell peripheral safety catheter device and capture/maintain a significant share of the global peripheral and midline IV catheter markets.

• Large Domestic / Global Catheter Market – The U.S. venous access catheter market is estimated to be $3.8 billion (including central catheters, implantable ports, peripherally inserted central

Meaningful Patient Benefits

Large Market Opportunity



catheters, midline catheters and peripheral catheters). It is estimated that 350 million peripheral IV catheters are used in the U.S. each year, with the global market approaching approximately 1 billion devices. The owner of the MMC and associated patent portfolio would have the ability to capture or maintain a significant share of the large global peripheral and midline IV markets.

• Global Emerging Markets – The MMC provides significant benefits for patients and providers in emerging market healthcare settings. These markets face several healthcare challenges, namely a lack of highly skilled professionals, high rates of patient infection and a necessity for low-cost solutions. The MMC is able to be inserted into a patient without the need for special personnel or training – increasing the products viability in emerging markets. Also, many emerging market regions lack the resources to administer frequent catheter changes or flushes. The extended in vivo dwell time of up to 29 days decreases the risk of infection and reduces costs to the healthcare providers.

• Significant Industry Tailwinds – IBISWorld predicts that the U.S. domestic venous access catheter industry is projected to grow at 6.6% per year from 2013 to 2018. The industry is being driven by increased utilization of healthcare services spurred by increases in insured lives as a result of government legislation, aging demographics and the growing proliferation of chronic diseases.

Company Overview


Section 3

Company Overview

Company Overview


Luther Needlesafe Products, Inc. was founded by Ronald B. Luther in 1998. Mr. Luther was regarded as one of the world’s leading authorities on catheter technology, infusion catheters and infusion catheter devices. He invented the first safety peripheral IV catheter in the mid-1980s. This device, commercially known as the Protect IV®, was sold to Johnson & Johnson and subsequently sold to Smiths Medical, Inc. In addition, Mr. Luther successfully sold approximately 40 patents to Becton, Dickinson and Company.

In 2001, the Company filed for patent approval for a safety Epidural needle device. The patent was granted and assigned to B. Braun Medical AG, in exchange for a cash payment and future royalties. As part of the agreement, the Company retained the rights to use the patent for the development of a new and innovative safety Huber needle. In 2004, the Company sold its safety Huber needle to Med-Design Corporation, a subsidiary of Specialized Health Products International, Inc., who was later acquired by C.R. Bard Inc. in 2008 primarily to gain access to the patents. As a result of this transaction, C.R. Bard Inc. currently controls a significant portion of the safety Huber needle market.

In 2004, the Company began to focus on development of an improved peripheral IV safety catheter, the result of which is known today as the MINI-MIDLINE™ Extended Dwell Safety Catheter. The goal was to save hospitals money and time by developing a product that protected clinicians from needle sticks and blood residue while being patient friendly, as a result of extended dwell times. In 2009, Mr. Luther passed away and Mr. Antonucci, his longtime colleague, took control of the MMC’s development. Mr. Antonucci completed the product design and finished the required biocompatibility studies ultimately gaining FDA 510(k) (K130518) approval.

Vascular access catheters typically come in four forms: peripheral IV catheters (“PIVCs”), midline catheters, peripherally inserted central catheters (“PICCs”) and central venous catheters (“CVCs”). The MMC is a unique device within the venous access catheter market. It combines the convenience and ease-of-use of peripheral IV catheters, with the soft catheter body and extended dwell time of midline catheters. Therefore, the MMC virtually eliminates the need for both peripheral IV catheters and midline catheters. It can be used for short hospital stays where the convenience of a peripheral IV catheter is required, as well as longer patient stays of up to 29 days where a midline catheter would typically be required.

The following exhibits list key features of the MMC as compared to typical catheter devices.

History and Background

Product Overview

Company Overview


Exhibit 3.1: Catheter Comparison

Features MINI-MIDLINE™ Peripheral Catheter Peripheral Midline

Catheter Peripheral Central

Catheter

In vivo Dwell Time Up to 29 Days 72 - 96 hours Up to 29 days Up to 1 Year

Catheter Body Soft, flexible Hard (Teflon®) Soft, flexible Soft, flexible

Length Less than 3 inches Less than 3 inches 4 to 8 inches 9 to 24 inches

Insertion Point Hand to antecubital Hand to antecubital Antecubital and above Antecubital and above

Insertion Method Over-the-Needle Over-the-Needle Guide wire Guide wire

Required Professional Nurse clinician Nurse clinician Nurse clinician Specialist, x-ray required

Strengths / Weaknesses

Best Value: Convenience of a short catheter with the dwell time of a

midline device

Short dwell time and hard catheter body

require frequent replacements and increase the risk of

infection and phlebitis

More expensive devices, requiring a guide wire for proper placement, typically

sold in kits

Invasive placement procedure and patient

discomfort

Estimated Total Cost per Use (device + labor)

$20 $20 $120 >$200

Source: Company, various public sources

Company Overview


Exhibit 3.2: MINI-MIDLINE™ Key Features

Source: Company

The Company has developed a unique blending process to affix the hard tip to the soft catheter body. To comply with FDA requirements, the tip blending process has to meet a minimum 5N pull test. This test is performed on an instron machine to verify the strength of the bond between the hard tip and the soft body catheter. The Company’s tip blending process is able to pass the required test. In addition, the Company has developed an automated process and machine able to produce soft-body catheters with hard tips in large quantities. This process will greatly reduce production costs during high-volume manufacturing runs.

Joseph G. Antonucci, Chairman and Chief Executive Officer

Mr. Antonucci joined Ron Luther in 1998 to help manage Luther Research Partners and subsequently became president and majority shareholder of Luther Needlesafe Products, Inc.

Prior to working with Ron Luther, Mr. Antonucci was Comptroller and Treasurer for various companies specializing in credit and equity markets. In 1984, he became a Principal of MCG portfolio management. Over a four-year period, Mr. Antonucci assisted the company’s transformation from a firm with 12 employees and an office in New York City to a total of 135 employees with offices in five states.

Mr. Antonucci graduated from St. Peter’s College with a B.Sc. in Accounting and a minor in Economics. He possesses more than 25 years of experience in the investment banking industry.

Product Manufacturing

Management Biography

Soft Body Made of more flexible, less invasive materials, approved for dwell times of up to 29 days

Slit Valve Slit valve (normally closed) ensures that any blockage of the tip does not interrupt IV flow

Index Finger Tab Stationary platform to push against for easier one-handed operation

Protective Needle Sheath The bloody needle is contained in a safety sheath, secured at the distal and proximal ends, unable to be defeated or reset

Flashback Chamber Provides a visual confirmation when the needle has punctured the vein

Catheter Retention Jaws Holds the catheter hub securely until the slide is pulled back completely, once the slide is pulled back, the jaws automatically open, releasing the catheter and activating the proximal lock

Hard Tip and Insertion Patented method of insertion; Unique hard tip design blended into the soft catheter body

Industry Overview


Section 4

Industry Overview

Industry Overview


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U.S. Healthcare expenditures reached $2.8 trillion in 2012, or 17.2% of GDP. By 2021, analysts estimate that U.S. healthcare expenditures will approach $4.8 trillion, or 19.6% of GDP. This rapid increase in healthcare costs is being driven by several macro-economic factors, mainly federal government healthcare legislation, population demographics, the number of patients suffering from chronic diseases and the increasing costs of medical technology. These factors are driving increases in both the patient population seeking healthcare services and the cost of healthcare per capita in the U.S. The U.S. currently spends more on healthcare per capita than any other nation in the world.

Exhibit 4.1: Healthcare Expenditures Per Capita

Source: OECD. Health at a Glance 2013 - OECD Indicators

• U.S. Healthcare Legislation – One of the main factors expected to increase the demand for healthcare products and services is the Patient Protection and Affordable Care Act (“ACA”) of 2010. As a result, an estimated 20 million additional Americans will gain access to medical insurance. The healthcare system is expected to see increased demand for virtually all healthcare products, including physician and hospital visits, prescription medication, medical tests and diagnostics, and medical supplies.

Macro-Economic Trends

Industry Overview


In addition, government legislation was enacted to reduce clinician injuries suffered from accidental needle sticks and the contraction of blood diseases such as HIV and hepatitis C. The Needle Stick and Prevention Act (“NPA”), signed in 2000, places requirements on healthcare employers to document that they have implemented safety-engineered sharps devices and needless systems. In addition, the FDA application clearance process requires that manufacturers of medical devices must meet requirements for appropriate registration, listing, labeling and good manufacturing practices (“GMPs”) for design and production. In order to receive clearance or approval to market a medical device, manufacturers must demonstrate that the device is substantially equivalent to a legally marketed device or to document the effectiveness and safety of the new device through a more involved premarket approval process.

• Aging Demographics – Research has shown that healthcare expenditure per capita for individuals over 65 year of age is about three times higher than the rest of the population. This demographic group requires more medical services, prescription medication and surgeries. In 2010, 40 million Americans were over 65 years of age (13% of U.S. population). It is estimated that by 2030 the population 65 years of age and older will grow by approximately 80% to 72 million (20% of the U.S. population).

Exhibit 4.2: Historical and Projected U.S. Aging Population

Source: U.S. Bureau of Labor Statistics

• Increases in Chronic Diseases – According to the National Health Council, chronic diseases

currently affect approximately 133 million Americans. The number of Americans affected by chronic diseases is expected to reach 157 million by 2020 with 81 million having multiple conditions. It is estimated that 25.8 million children and adults in the U.S. have diabetes or 8.3% of the total population. In addition, approximately 79 million Americans have pre-diabetes and 42% of the U.S. population will be obese by 2030 and at a high risk of developing diabetes. Chronic diseases are expected to continue to place upward pressure on healthcare expenditures.

• Cost of Medical Technology – In spite of the new levied excise tax as a result of the ACA, budgets for research and development (“R&D”) continue to be strong. Currently in the U.S., R&D

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Industry Overview


expenses account for nearly 12.0% of the medical instrument manufacturing industry’s revenue. As a result, the costs of new treatments continue to rise. A 2010 study by Eli Lilly and Company estimated that the cost of drug discovery and development for a single drug was $1.8 billion. Companies can pursue R&D through in-house efforts, license intellectual property from smaller companies, or acquire competing businesses with established patents. Companies are expected to continue to spend large amounts of capital in R&D to remain competitive.

• Risk Shift to Providers – As a result of increasing healthcare costs in the U.S., the healthcare sector is undergoing significant changes. Healthcare facilities are being evaluated on a value basis rather than a pay-for-service basis. As a result, Accountable Care Organizations (“ACOs”) are being developed to monitor and meet new standards of care to maintain profitability. Profitability within the sector will be exceedingly dependent on operational efficiencies. In an effort to bring down costs, the ACA is requiring hospitals to lower their readmission rates. In addition, malpractice insurance premiums have increased sharply during recent years. To address this problem, healthcare providers are looking for ways to reduce medical errors and patient complications.

The American Hospital Directory reports that there are approximately 4,012 non-federal, short-term, acute care hospitals in the United States. These hospitals have approximately 759 thousand staffed beds, account for an estimated 149 million patient days and generate about $2.4 trillion in gross revenues.

Historically, personal physicians provided first-contact acute care in the United States. Currently, only 42% of the 354 million annual visits for acute care issues are made to general practitioners. The remaining visits are made to emergency rooms (28%), specialists (20%) or outpatient centers (7%). Provisions in the ACA that advance patient-centered medical homes and ACOs are intended to improve access to acute care facilities.

IBISWorld estimates that the U.S. venous access device market is approximately $3.8 billion, and is expected to grow by 6.6% from 2013 to 2018. Power injectable peripherally inserted central catheters (allow for injection of contrast media for CECT scans at a maximum rate of 5 ml/sec) and tip-location devices designed to assist with catheter placement are expected to benefit from this growth. According to Healthcare Global roughly 90.0% of hospitalized patients in the U.S. received some sort of vascular access treatment, in which venous access devices were used.

This growth is being driven by strong macro and demographic trends in the sector and by rising physician visits and higher government and private spending on healthcare.

Acute Care Industry

Catheter Market Overview

Industry Overview


Merger and acquisition activity in the healthcare sector has been driven by the importance of acquiring intellectual property rights. Companies that possess proprietary devices can increase and maintain market share, earning higher margins.

Exhibit 4.3: Venous Access Device Manufacturing

Source: IBISWorld Industry Report. Venous Access Device Manufacturing in the U.S. December 2013

IBISWorld estimates that the four largest companies within the industry hold a combined U.S. market share of approximately 33.2% of total revenue. Consolidation is increasing as large companies are acquiring smaller companies for their lucrative product design patents. Major catheter manufacturers include:

Exhibit 4.4: Catheter Market Competitive Landscape

(USD in millions) Company

Estimated 2013 Catheter Related Revenue Notable Products

Baxter International, Inc. $613.4 CLEARLINK, ONE-LINK, V-LINK, VITAL-HOLD, and other infusion sets

C.R. Bard Inc. $358.9 PowerGlideTM, Bard Poly, Per-Q-Cath Plus, and Groshong catheters

Cook Group Incorporated $150.0 Flexor®, Micropuncture®,

Becton, Dickinson and Company

$120.3 BD Introsyte AutoguardTM, BD Introsyte-NTM AutoguardTM, BD Nexiva™, BD Diffusics™

Smiths Group plc NA ACUVANCE®, PROTECTIV®, ViaValveTM

Covidien plc NA ClosureFAST™, Palindrome™

Terumo Corporation NA SURFLOW®, SurFlash®

Source: Companies’ websites, various public sources

Catheter Market Competitive Landscape

Other37.5%

Peripherally Inserted Central

Catheters (PICCs)29.2%

Implantable Ports25.0%

Central Venous Catheters (CVCs)8.3%

$3.8 Billion

$1.4 billion “Other” Market Opportunity

Includes peripheral and midline IV catheters and other

venous access devices

Industry Overview


Innovation and technological competence, excellence in design, high product performance, quality of services, and competitive pricing are among the main elements driving competition within the industry. The key success factors include economies of scale, ability to undertake technical R&D, a strong brand reputation, and having contacts in key markets. The most vital factors acting as barriers to entry are intellectual property and FDA regulatory approval. In the industry, most goods are manufactured under patents. Companies entering into the industry either have to acquire the required patents or engage in expensive R&D to manufacture a product that can compete without infringing upon intellectual property.

Appendices


Appendices

Appendices


PATENTS

CASE COUNTRY TITLE OR MARK FILING DATE SERIAL NO.

ISSUE / REG. DATE

PATENT OR REG. NO. STATUS

LUTHN-001A U.S. INTRAVENOUS INFUSION NEEDLE WITH SOFT BODY 9/3/98 09/146,451 12/31/02 6,500,157 ISSUED.

LUTHN-001C1 U.S. INTRAVENOUS INFUSION NEEDLE WITH SOFT BODY 12/30/02 10/334,679 3/8/05 6,863,662 ISSUED.

LUTHN-002C1 U.S. HARD TIP OVER-THE-

NEEDLE INTRAVENOUS CATHETER

8/19/03 10/644,047 5/10/05 6,890,321 ISSUED.

LUTHN-003A U.S. INSERTION NEEDLE AND

SOFT CATHETER SYSTEM WITH TIP PROTECTOR

3/13/00 09/523,878 7/22/03 6,595,954 ISSUED.

LUTHN-004A U.S. UNIVERSAL PASSIVE

PROTECTOR FOR AN IV CATHETER

10/31/01 10/003,782 01/03/06 6,981,965

ISSUED. 11.5 Year

Maintenance Fee due

07/03/2017

LUTHN-004AU AUSTRAILIA UNIVERSAL PASSIVE


10/31/02 2002340363 12/11/08 2002340363 ISSUED.

Next Annuity due 10/31/2017

LUTHN-004CA CANADA UNIVERSAL PASSIVE


10/31/02 2465520 04/12/11 2465520 ISSUED.


LUTHN-004EP EUROPE UNIVERSAL PASSIVE


10/31/02 02778715.9 07/02/14 1448251 ISSUED.


LUTHN-005C1 U.S.

FLUSH ENTRANCE HEMOSTASIS VALVE WITH

UNOBSTRUCTED PASSAGEWAY

02/10/09 12/368,634 02/28/12 8,123,727

ISSUED. 7.5 Year

Maintenance Fee due

08/28/2019

LUTHN-005C2 U.S.

FLUSH ENTRANCE HEMOSTASIS VALVE WITH

UNOBSTRUCTED PASSAGEWAY

01/24/12 13/356,836 08/13/13 8,506,534

ISSUED. 3.5 Year

Maintenance Fee due

02/13/2021

LUTHN-012A U.S. LOW PROFILE PASSIVE PROTECTOR FO AN IV

CATHETER 07/18/13 13/945,728 2/17/15 8,956,328

ISSUED. 3.5 Year

Maintenance Fee due

08/17/2018

LUTHN-012C U. S. LOW PROFILE PASSIVE PROTECTOR FOR AN IV

CATHETER 01/09/15 14/593,978 – –

PENDING. Response to Office Action due06/30/2017

LUTHN-012CA CANADA LOW PROFILE PASSIVE PROTECTOR FOR AN IV

CATHETER 07/02/14 PCT/US2014/04

5218 – – PENDING.

Annuity due 07/02/2017

Appendix 1: Patent & Trademark Portfolio

Appendices


LUTHN-012EP EUROPE LOW PROFILE PASSIVE PROTECTOR FOR AN IV

CATHETER 01/09/15 07/02/2014 – –

PENDING. Annuity due 07/02/2017

LUTHN-012RC CHINA LOW PROFILE PASSIVE PROTECTOR FO AN IV

CATHETER 10/31/13 2013105295226 – – PENDING.

TRADEMARKS

CASE COUNTRY TITLE OR MARK FILING DATE SERIAL NO.

ISSUE / REG. DATE

PATENT OR REG. NO. STATUS

LUTHN-009T U.S. MINI MIDLINE 06/08/05 78/646,817 12/08/09 3,723,794 REGISTERED. Renewal due 12/08/2019

Appendices



Luther Needlesafe Products, Inc. Joseph G Antonucci Chairman & CEO Phone: 949.829.6696 Fax: 949.461.7238 Email: [email protected] Joseph B Antonucci President Phone: 949.829.6696 Fax: 949.461.7238 Email: [email protected]

Luther Needlesafe Products, Inc.lnpinc.net/assets/LNP_Investment_Brochure.pdf · Exhibit 3.1:...

Documents

Transcript of Luther Needlesafe Products, Inc.lnpinc.net/assets/LNP_Investment_Brochure.pdf · Exhibit 3.1:...