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. © 2004 Piper Jaffray & Co., 800 Nicollet Mall, Minneapolis, Minnesota 55402-7020 Piper Jaffray Health Care Group Medical Technology Pulse—Issue 229: May 24, 2004 Page 2 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. © 2004 Piper Jaffray & Co., 800 Nicollet Mall, Minneapolis, Minnesota 55402-7020 Piper Jaffray Health Care Group Medical Technology Pulse—Issue 229: May 24, 2004 Page 3 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. © 2004 Piper Jaffray & Co., 800 Nicollet Mall, Minneapolis, Minnesota 55402-7020 Piper Jaffray Health Care Group Medical Technology Pulse—Issue 229: May 24, 2004 Page 4 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. 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