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MRI Interventions, Inc.

Impact of Drug Delivery Services on Valuation


(as of April 20,2018)

Thesis: MRI Interventions (MRIC) should trade at a valuation that reflects


the reliance of Voyager Therapeutics (VYGR) on MRIC’s ClearPoint
platform technology.

Facts: Share Price: MRIC $3.20


VYGR $18.53

Market Cap: MRIC $34.2 million


VYGR $595 million

Enterprise Value MRIC $29.8 million


VYGR $426.2 million

MRIC is a commercial stage medical device company with proprietary platform


technology that enables minimally invasive and exquisitely accurate surgical
procedures and drug delivery to the brain as well as other organs with live MRI
guidance.

VYGR is a developmental stage gene therapy company focused on central nervous


system diseases. They do not have commercial revenue from drug sales. They
have one lead drug candidate to treat Parkinson’s disease entering a pivotal
Phase 2-3 clinical trial.

VYGR is exclusively dependent upon MRIC’s ClearPoint platform to deliver its drug
to the patient’s brain. VYGR’s future revenue cannot be realized except and
unless they can treat patients using the MRIC ClearPoint platform and have access
to ClearPoints’ clinical support team. VYGR’s investor presentation discloses its
dependency on the ClearPoint technology. It indicates that without the accuracy
of drug placement and dosage administration afforded by ClearPoint the clinical
outcomes of their drug would be inferior. MRIC will realize revenue in a 1:1
correlated rate with VYGR’s revenue.

MRIC’s market value should similarly be correlated to VYGR’s market


value.
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Implied MRIC Procedures
from Voyager Procedures
4,500
4,062
4,000
3,500
3,000
2,500
2,000
1,500
1,402

1,000
172 287
500 113 218
-
2018 2019 2020 2021 2022 2023
Based on consensus of 12 Street analysts VYGR revenue projections as of Mar 30, 2018

Implied MRIC Revenue


from Voyager Procedures
($000)
$45,000 $42,648
$40,000
$35,000
$30,000
$25,000
$20,000
$14,022
$15,000
$10,000
$2,868
$5,000 $1,130 $1,720 $2,175
$-
2018 2019 2020 2021 2022 2023
Based on consensus of 12 Street analysts VYGR revenue projections as of Mar 30, 2018

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By growing MRIC revenue in line with projections from Piper Jaffray, Canaccord
and the consensus of all 12 analysts that cover VYGR we can have a revenue
projection on which to apply the present multiple of revenue being paid for VYGR
for the identical buildup in revenue.

The following table displays the MRIC value per share attributable to VYGR alone.
The total value per share should also include a value component attributable to
MRIC’s non-VYGR business.

Implied MRIC Value based Upon VYGR Metrics


Current VYGR EV VYGR Price Target EV
Per Street Per Street
Per Piper Per Consensus Per Piper Per Consensus
Jaffray Canaccord Rev Jaffray Canaccord Rev
Implied MRIC EV per share attributable to VYGR $ 3.57 $ 5.36 $ 4.01 $ 7.68 $ 11.54 $ 8.64
% Increase from Current MRIC EV per share 28% 93% 44% 176% 315% 210%
Implied MRIC MV per share $ 3.98 $ 5.78 $ 4.43 $ 8.09 $ 11.96 $ 9.05
% Increase from Current MRIC MV per share 24% 81% 38% 153% 274% 183%

The implication is that MRIC should have $4.01 of value attributable to its
strategic importance to VYGR at current market and consistent with the Street
consensus projections for VYGR revenue. That equates to a 44% increase over
the current MRIC Enterprise Value per share. The equivalent Enterprise Value at
VYGR’s price target would be $8.64 per MRIC share.

Different analysts can torture the data and come up with different outcomes but
all analysis should be directionally the same.

Simple is sometimes better . . . Another simple test is to base MRIC’s value


relative to the amount of revenue it will generate versus VYGR’s revenue. The
price per procedure that VYGR intends to charge is $125,000. MRIC’s price per
procedure is approximately $10,000 or 8% of the VYGR price. If you assume that
MRIC should then be equal to 8% of VYGR’s enterprise value you arrive at an
MRIC EV per share of $3.21 attributable to VYGR business. That translates into
$3.63 of MRIC market value and assigns zero value to the rest of MRIC’s business.

There is more . . . The above analysis only applies to one drug and only US sales
of VYGR’s drug. VYGR is developing more drugs and going beyond Parkinson’s
disease. MRIC also is involved with four additional drug companies albeit smaller
ones than VYGR. MRIC’s revenue will experience hockey stick growth if any of the
drugs are approved.
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What one scientist said . . . A former senior scientist with Voyager had glowing
comments about the MRIC ClearPoint platform. He is a neuroscientist and
currently a Chief Scientific Officer with another drug company. He had a
distinguished career at Medtronic.
• ClearPoint “will be required for any intracranial procedure”.
• ClearPoint “is head and shoulders” above any other system, “absolutely
brilliant technology”.
• The accuracy enabled by the ClearPoint system is “crucial” for successful
drug delivery.
• The clinical support team and products are superb and critical for quality
control elements.
• “It is hard to imagine” Voyager not using ClearPoint in their upcoming
Alzheimer’s drug development.
o Abbvie just paid VYGR $69million upfront with as much as
$155million in preclinical and Phase 1 option payments and up to
$895million in milestone payments to develop an Alzheimer’s drug.
o Treating Alzheimer’s using ClearPoint would be over 10X bigger than
Parkinson’s. There are 0.5 million Americans living with Parkinson’s.
5.5 million are living with Alzheimer’.

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