Since 1895. Member SIPC and NYSE. Securities Products And

Piper Jaffray Health Care Group Issue 229: May 24, 2004

Sections: Weekly Relative Price Performance Initial Public Offerings Subsequent Offerings Buyers & Sellers Movers & Shakers Index Performance Medical Technology Contacts

Animas Prices 4.25 Million Shares at $15 Per Share in IPO May 19, 2004: Medical device maker Animas priced 4.25 million shares at $15 per share in its initial public offering which represented the top end of the filing range. The company, which makes insulin pumps for diabetics, originally filed to offer shares at an estimated price range of $13 to $15 a shares. Animas traded well in the public markets by closing up 18% after its first day of trading. Piper Jaffray and J.P. Morgan acted as co-lead advisors with Thomas Weisel Partners LLC acting as a co-manager on the deal. Animas, based in West Chester, Pennsylvania, has listed its stock on the Nasdaq under the symbol "PUMP."

Cardinal Health to Buy Alaris May 19, 2004: Cardinal Health Inc. has agreed to acquire Alaris Medical Systems for $1.6 billion to expand beyond drug wholesaling and into medication safety products, the companies said on Wednesday. Including assumption of Alaris debt by Cardinal, the deal is worth $2 billion, the companies said.

The deal fits with Cardinal's strategy of broadening its reach beyond shipping products between drug makers and pharmacies and hospitals. Cardinal produces pharmacy automation equipment and medical supplies and also provides packaging and marketing services for drug makers. Alaris makes medication safety systems such as computers that monitor patient safety during intravenous injections.

Under the deal, expected to close by June 30, Cardinal will make a cash tender offer to buy all outstanding Alaris common stock for $22.35 per share, an 18 percent premium over Alaris' closing price of $18.88 on Tuesday on the New York Stock Exchange

Piper Jaffray Investment Banking Weekly Relative Price Performance 5/23/03 – 5/21/04

170

160

150

140

130

120

Price = 100 on 5/23/03 110

100

90 5/23/03 6/20/03 7/18/03 8/15/03 9/12/03 10/10/03 11/07/03 12/05/03 1/02/04 1/30/04 2/27/04 3/26/04 4/23/04 5/21/04

Date

Large Cap Medical Technology Small Cap Medical Technology NASDAQ

Source: FactSet Research Systems

Since 1895. Member SIPC and NYSE. Securities products and services are offered in the United Kingdom through Piper Jaffray Ltd., which is authorized and regulated by the Financial Services Authority.

Initial Public Offerings

Date Issuer $ Raised (mm) Filing Range Issue Price 5/21/04 Price

05/19/04 Animas Corporation $63.75 $13.00-$15.00 $15.00 $18.05

05/13/04 NuVasive, Inc. $71.5 $11.00-$13.00 $11.00 $10.60

03/31/04 Cutera* $49.5 $14.00-$16.00 $14.00 $14.05

02/24/04 Kinetic Concepts Inc.* $540.0 $27.00-$29.00 $30.00 $47.00

07/12/02 HealtheTech(1) $30.00 $45.00-$55.00 $37.50 $2.00

06/20/02 CTI Inc.* $209.6 $16.00-$18.00 $17.00 $13.48

05/16/02 Kyphon* $103.5 $13.00-$15.00 $15.00 $22.48

05/06/02 Quinton Cardiology $32.2 $13.00-$15.00 $7.00 $11.32

03/26/02 MedSource Technologies $115.1 $15.00-$17.00 $12.00 $6.92

(1)Split adjusted *Piper Jaffray managed Source: Company filings

Subsequent Offerings

Date Issuer $ Raised (mm) File Price Offer Price 5/21/04 Price

02/26/04 Biolase Technology $51.9 $12.82 $18.50 $12.55

02/18/04 dj Orthopedics* $142.5 $19.00 $19.00 $25.14

12/10/03 Encore Medical $61.09 $7.01 $6.25 $6.91

12/03/03 LCA Vision $56.93 $17.89 $16.50 $23.35

10/30/03 Intuitive Surgical* $72.50 $17.54 $14.50 $16.13

10/01/03 OraSure Technologies $45.00 $9.96 $9.00 $6.85

9/25/03 Angiotech Pharmaceuticals(1) $218.75 $24.84 $21.88 $19.51

09/18/03 Baxter International $671.00 $30.00 $30.50 $31.60

08/05/03 Encore Medical $42.55 $3.55 $4.00 $6.91

06/25/03 Alaris Medical $130.63 $13.08 $12.50 $22.29

06/17/03 VIASYS Healthcare $67.28 $18.35 $19.50 $20.87

12/11/02 Baxter International $430.3 $31.30 $28.78 $31.60

06/20/02 Conceptus $74.2 $18.15 $16.00 $11.22

05/22/02 Advanced Neuromodulation* $89.1 $29.21 $31.00 $33.87

(1)Split adjusted *Piper Jaffray managed Source: Company filings

Since 1895. Member SIPC and NYSE. Securities products and services are offered in the United Kingdom through Piper Jaffray Ltd., which is authorized and regulated by the Financial Services Authority.

Buyers & Sellers (Deals over $20 million)

Date Target Acquirer Deal Value (mm) Value/LTM Rev.

05/19/04 ALARIS Medical Systems, Inc. Cardinal Health $2,050 3.7x

05/18/04 Hudson Respiratory Care, Inc. Teleflex Incorporated $460 2.5x

05/17/04 Biohorizons Implant Systems, Inc. Encore Medical Corp, $36 2.3x

05/13/04 Horizon Medical Products, Inc. RITA Medical Systems $137 4.7x

05/10/04 Schaerer Mayfield USA, Inc. Integra LifeSciences $20 1.9x

04/28/04 MedSource Technologies Inc.* UTI Corporation $230 1.3x

03/12/04 Midland Medical Tech. Smith & Nephew $151 4.2x

03/08/04 Interpore Cross* Biomet $268 3.8x

03/01/04 Novacept* Cytyc $325 8.5x

02/03/04 Milex Products Cooper Companies $26 1.9x

01/22/04 AFx inc. Guidant $45 ND

01/13/04 TheraSense* Abbott International $1,173 5.5x

12/18/03 Invivo Intermagnetics General $154 2.6x

12/15/03 I-Stat Abbott Laboratories $353 5.5x

12/15/03 Percutaneous Valve Tech. Edwards Lifesciences $125 ND

11/24/03 Implex Zimmer Holdings $108 ND

11/20/03 BREG Orthofix $150 2.6x

11/12/03 Vertelink Medtronic $22 ND

10/24/03 Parallax Medical ArthroCare $28 ND

10/10/03 Amersham General Electric $9,500 3.7x

10/09/03 Orthologic (BGS Business) dj Orthopedics $93 2.2x

09/26/03 Integrated Vascular Systems Abbott Laboratories $65 ND

09/15/03 AbilityOne Patterson Dental $575 2.6x

08/13/03 Mathys Medical Synthes Stratec $1,107 3.9x

08/11/03 TransVascular, Inc.* Medtronic, Inc. ND ND

05/20/03 Centerpulse Zimmer Holdings $3,220 2.8x

06/30/03 Spinal Concepts* Abbott $210 ND

*Piper Jaffray managed Source: Company filings and Wall Street Research estimates

Movers & Shakers (5/17/04—5/21/04) Index Performance

Largest % Increase + % Close Index YTD LTM

Advanced Neuromodulation $5.48 19.3% $33.87 Small Cap Medical Technology 1.7% 47.8%

Possis Medical Inc. $4.26 17.1% $29.24 Large Cap Medical Technology 4.6% 27.4%

World Heart Corporation $0.84 16.4% $5.95 Nasdaq (4.6%) 28.3%

Largest % Decrease - % Close Dow (4.7%) 17.0%

Synovis Life Tech ($6.03) (38.7%) $9.54 S&P 500 (1.7%) 18.4% Escalon Medical Corp. ($4.74) (23.0%) $15.84

Vascular Solutions ($1.86) (15.7%) $10.01 Source: FactSet Research Systems Source: FactSet Research Systems

Since 1895. Member SIPC and NYSE. Securities products and services are offered in the United Kingdom through Piper Jaffray Ltd., which is authorized and regulated by the Financial Services Authority.

Medical Technology Investment Banking Contacts

Jon Salveson Bob DeSutter Jeff Hoffman Head of Investment Banking Head of Health Care M&A Head of Health Care Investment Banking 612 303-6363 612 303-6392 415 277-1521 [email protected] [email protected] [email protected]

Rick Gustafson Eric Tardif Rakesh Mehta Brittany Bradrick Vice President Vice President Vice President Vice President 612 303-8242 612 303-8308 415 277-1530 415 277-1524 [email protected] [email protected] [email protected] [email protected]

Medical Technology Equity Research Contacts

Thom Gunderson Steven Hamill Raj Denhoy Senior Research Analyst Senior Research Analyst Senior Research Analyst 612 303-6467 612 303-6456 212 284-9304 [email protected] [email protected] [email protected]

The Medical Technology Pulse is published weekly by the Piper Jaffray Health Care Group within the Medical Technology Investment Banking Department at Piper Jaffray. To report any technical difficulties with this e-mail transmission, please contact Julie Lewis at [email protected].

Information contained in this publication is based on data obtained from sources we deem to be reliable, however, it is not guaranteed as to accuracy and does not purport to be complete. Nothing contained in this publication is intended to be a recommendation of a specific security or company nor is any of the information contained herein intended to constitute an analysis of any company or security reasonably sufficient to form the basis for any investment decision. Nothing contained in this publication constitutes an offer to buy or sell or the solicitation of an offer to buy or sell any security. Officers or employees of affiliates of Piper Jaffray & Co., or members of their families, may have a beneficial interest in the securities of a specific company mentioned in this publication and may purchase or sell such securities in the open market or otherwise.

Notice to customers in the United Kingdom: This publication is a communication made in the United Kingdom by Piper Jaffray & Co. to market counterparties or intermediate customers and is exclusively directed at such persons; it is not directed at private customers and any investment or services to which the communication may relate will not be available to private customers. In the United Kingdom, no persons other than a market counterparty or an intermediate customer should read or rely on any of the information in this communication.

Additional information is available upon request. www.piperjaffray.com

Since 1895. Member SIPC and NYSE. Securities products and services are offered in the United Kingdom through Piper Jaffray Ltd., which is authorized and regulated by the Financial Services Authority.