Background

Motasim Sirhan, formerly of the Guidant Corporation, founded Avantec, a medical device company, in 1999. We invested in Avantec shortly after it was founded and were its sole institutional investor.

Key Insights and Vision

• In select medical device markets, such as interventional cardiology, companies earn pharmaceutical company-like margins despite dramatically shorter and less costly regulatory approval processes.

• Even in international markets where medical device approval timelines are shorter than the US, companies still earn high margins.

• Interventional cardiologists, unlike other medical professions, will more easily switch stent systems for improvements in performance specifications.

• With Mr. Sirhan's leadership a low profile, tight knit, highly innovative, team could accomplish with a limited budget what most companies struggle to accomplish with hundred million dollar R&D budgets.

• Develop and quickly bring to international markets a best in class current generation stent system to quickly begin generating revenues, while investing in the development of next generation systems.

Company’s Strategic and Operational Achievements

• Developed and launched best in class bare metal stents in the Japanese market within two years of start-up.
• Made considerable progress in developing next generation product including first in-man studies.
• Eighteen months after incorporation, and accumulated burn of less than $5 million, Avantec was cash flow positive.

Outcome

• In 2003, Avantec was sold to its Japanese manufacturer and distributor, Goodman Ltd., for $165 million (10X return on our initial investment).
• After partnering on Avantec, Mr. Sirhan and Invus formed Elixir Medical, a joint venture to fund and develop new products at the intersection of medical devices and drug therapy.