Corporate Investment in Start-Ups Rachael Scherer Vice President, Marketing Medtronic, Inc.

1. Corporate Investment in Start-UpsRachael SchererVice President, MarketingMedtronic, Inc.

2. Medtronic Mission Medtronic: the Company “To contribute to human welfare by application of biomedical engineering in the research, design, manufacture and sale of instruments or appliances that alleviate pain, restore health and extend life.”

3. Medtronic History Founded in 1949 as a medical equipment service company

5. Sinusitis Peripheral Vascular Disease Acid Reflux Enlarged Prostate Essential Tremor Tachyarrhythmia Parkinson’s Disease Coronary Vascular Disease Diabetes Degenerative Disc Disease Spasticity Hydrocephalus Bradyarrhythmia Incontinence Chronic Pain Dystonia Unexplained Syncope (Fainting) Medtronic Solutions Restore Health Atrial Arrhythmias Heart Valve Disease Scoliosis Heart Failure

6. We Diversified Into Attractive Markets Balanced Growth US$12.3 Billion Net Sales (Fiscal Year 2007) Cardiac Surgery 6% ENT 4% CRDM 47% Diabetes 6% Vascular 8% Neurological 9% Spine/Navigation 20%

7. Medtronic Global Reach Eastern Europe Central Asia Canada Europe USA Asia Pacific Middle East/ Africa/India Latin America • International • Western Europe • Canada • Emerging Markets • Latin America • Eastern Europe • Middle East/Africa/India Asia-Pacific • Japan • Australia • China • ASEAN • Korea • Salesin 120 Countries • Officesin 44 Countries • 36,000employees world wide

8. Ingredients to Drive Growth are in Place In billions $22B - $24B $12B + INT’L US

9. R&D Spending Continues To Increase $1Billion + $191 Million FY95 FY07

10. Productive R&D = New Products 2/3 of revenues are from products introduced within the past 2 years

11. Medtronic Mission Medtronic: the Investor “To contribute to human welfare by application of biomedical engineering in the research, design, manufacture and sale of instruments or appliances that alleviate pain, restore health and extend life.”

12. Where Does This Growth Come From? What is Required to Sustain Growth? Annual Incremental Revenue Required to Sustain 15% Growth ($ in Billions) $4.7 $4.1 $3.5 $3.1 $2.7 $2.3 $2.0 $1.8 $1.5 $1.3 FY

13. We Have Ample Financial Flexibility Free Cash Flow and Cash Available for Investment Free Cash Flow (Billions) Cash Available for Investment (Billions) Free Cash Flow (Operating Cash Flow less Cap Ex) Cumulative Cash Balance

14. We Diversified Into Attractive Markets Balanced Growth US$12.3 Billion Net Sales (Fiscal Year 2007) Cardiac Surgery 6% ENT 4% CRDM 47% Diabetes 6% Vascular 8% Neurological 9% Spine/Navigation 20%

15. Market Development Indication Expansion Market Share Geographic Expansion New Markets Evaluating New Growth Platforms, Strengthening Existing Growth Platforms • “White Space” will augment top growth, diversify business, geographic and payor mix • Aggressive global scouting efforts continue to identify new technologies • Minority investment portfolio provides early access to new technology • We will identify new business platforms where we add value and leverage Medtronic strengths

16. Business Development Strategy • Disruptive technologies in therapeutic areas of interest • Extension of existing technologies into new therapeutic areas • Drug partnering • Procedure solutions (how do we make therapies more efficacious, safer, less invasive and more convenient) • Sensors and closed loop systems • Miniaturization

17. Minority Investment Strategy • Extend eyes and ears for key emerging technologies • Board seat or board observer seat • Membership on scientific advisory board • Create bonds to enhance ability to negotiate future investments • Development agreements • Distribution rights • Gain certain option rights • Right of first offer • Right of first refusal Medtronic currently has ~$200M in active investments in over 70 companies

18. Minority Investment ExamplesPast & Present Equity Investments: • Volcano / IVUS First investment in 2002, Licensing agreement in 2003 Equity financing used to develop IVUS products Up-front payment for technologies used in Medtronic products Volcano completed successful IPO in mid-2006; Medtronic still a shareholder. • CardioMEMS / Wireless Sensing & Communications In 2005, Medtronic made entered into a license and joint product development program. Equity investment and series of milestone payments Medtronic has overall responsibility & bears cost for clinical and regulatory CardioMEMS began IPO process, but has opted to remain private, for now • Spinal Dynamics / Artificial Disk Initial investment in 2001, Medtronic became exclusive OUS distributor of Bryant disc In 2003, Medtronic acquired Spinal Dynamics for $270M Bryant disc expected to go to FDA Panel this Fall

19. Case study: Neurologix Collaboration Neurologix, Inc. And Medtronic, Inc. Agree To Develop Gene Therapy Infusion Catheters; Medtronic Makes A Further $2 Million Equity Investment In Neurologix • Medtronic will manufacture, delivery devices for Neurologix's Parkinson's disease and temporal lobe epilepsy clinical programs • Two companies will have a revenue-sharing arrangement • Medtronic increased its equity investment in Neurologix by $2.0

20. Case study: Alnylam Collaboration • Scope • Collaboration to develop novel siRNA-device treatments for neurodegenerative diseases • Begin with exploration of one target/disease: huntington in Huntington’s Disease (HD) • Roles • Discovery and early development of siRNA component • To “Clinical Proof of Concept” ≈ completion of Phase IIa • Late-stage development of siRNA component • All development of Device component • Commercialization of siRNA-Device combination Alnylam Medtronic

21. Minority Investment ExamplesPast & Present Equity Investments: • Volcano • CardioMEMS • Spinal Dynamics • Neurologix Collaboration (case study) • Alnylam Collaboration (case study) “Larger than Life” deals: • Minimed • Vidamed

22. IdeasOpportunities IdeasOpportunities IdeasOpportunities IdeasOpportunities Process Clear fit with MDT business White Space Opportunities Investment Committee Investment Committee Corporate Development Strategy Committee Medtronic Business Units Several Sources

23. Acquisition Goals Acquire new strategic platforms focused on treatment of chronic disease and Acquire businesses or product lines complimenting or supplementing existing businesses Enhance Revenues!

24. Acquisitions Strengthen/Broaden Existing Business Cardiac Surgery Vascular Surgical Navigation CRDM Neuro Surgery Patient Mgmt • Intelex 2000 • Odin 2005 • Vitatron 1986 • Midas Rex 1998 • PaceArt 2001 • BioMedicus 1990 • DLP 1994 • Avalon 1994 • Electromedics 1994 • Carbon Implants 1994 • Avecor 1999 • Coalescent 2004 • Instent 1996 • AVE 1999 • PercuSurge 2001 • TVI2003 • Radius2004 • AngioLink2004

25. Acquisitions Expand into New Strategic Platforms Prior Acquisitions Current Interests Biotechnology Cancer Dental Hearing Hypertension Obesity Ophthalmology Orthopedics Urology/Gynecology Stroke Heart Valves – J&J’s Tissue Valve Business (1988) Cardiopulmonary – J&J’s Oxygenator Business (1988) Coronary Vascular – Versaflex (1989) / IMI (1989) Neuro/Gastro/Uro Diagnostics – Synectics/Dantec (1994) Peripheral Vascular/AAA – MIS (1995); AneuRx (1997) External Defibrillators – Physio Control (1998) Spinal – Sofamor Danek (1999) Neurosurgery – PS Medical (1995), SNT (1999) ENT – Xomed (1999) Diabetes – MiniMed/MRG (2002) BPH – VidaMed (2002) GERD – Endonetics (2002) Artificial Discs – Spinal Dynamics (2003)

26. Why Would You Want Medtronic as an Investor? • Expertise of entire Medtronic science organization available to our partners (with/without CDAs) • Medtronic will keep ownership below control position (unless investment moves to acquisition) • Medtronic invests for strategic reasons. We don’t like to lose $$, but generally run our portfolio to learn about technology and markets • Medtronic won’t tell you how to run your business; generally looks to be Board observer, not Board member