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Interviewer: Julien Regnard, TMTG Partner Q: Good morning and thank you Mr. Conviti for having accepted our invitation to talk about CARMAT. If you could first tell me a little bit more about yourself; what you have done? What is your personal experience until now?

Tin Man, here’s your new heart

In recent years, the CARMAT Heart project is among the most exciting in the field of cardiac surgery and heart transplant. The CARMAT name is the contraction of the founder’s name, famous cardiac surgeon Professor Alain Carpentier and the company Matra Défence (Currently EADS). Today, CARMAT SA is headed by Marcello Conviti and the established objective is to market a complete artificial heart (2 ventricular cavities) that is a viable alternative to heart transplant. In our exclusive interviews with CARMAT SA CEO, Marcello Conviti, and Professor Daniel Duveau, they provide a better understanding of the CARMAT global project, its history, ambition and the details of this extraordinary experience of artificial heart transplants.

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March 2016

INTERVIEW OF THE SEMESTER

Mr. Conviti Carmat SA CEO

Mr. Conviti:

First of all, thank you for this interview; it’s my pleasure and my honor to be part of the people who are exposed to your media. My name is Marcello Conviti, I’m Italian, I am 63, I have a PhD in computer science and I have been involved since the very beginning of my professional life in the medical device industries. I was originally with FIAT in Italy. FIAT was the major shareholder of a company named SORIN Biomedical, which today is number one in the cardiovascular field in Europe. I started my career at SORIN Biomedical in 1981. So this is the first part of my background. In 1992 I thought it was time for me to look after an international company, so I went to a company that is quite well known, Baxter Healthcare. I have taken the position of Italian director for the cardiovascular businesses and quickly moved into the position of vice president, Europe for marketing & sales. Then within Baxter Healthcare, the cardiovascular business was spun off into a company now called Edwards Lifesciences. Today, Edwards is one of the main players in the cardiovascular business. In 2009, I was approached by Pr. Carpentier, he asked me to be part of his adventure and I believed it was time for me to give back a bit of what I got from this field. We felt it was a great opportunity to have someone with senior experience to join a company that was ready to be launched. And the opportunity was quite attractive to me, to do something that will make a difference. At that time I was 57 and it was time for me to move somewhere else. So I moved from Lausanne to here in Paris, and since then I have the pleasure and the great honor to handle the CARMAT operations.

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Q: So this was some kind of exciting adventure that you actually started at that

point?

Mr. Conviti:

Yes, very much exciting because, on one hand it is the same kind of customer, the same wish to provide a solution for a very hard illness but I have brought with me my own previous experience in terms of indication, surgery, environment, etc. Here there is the combination of the biomedical and the bio-hemocompatibility like in the heart valve business. These are the key points that I have been able to bring with me.

Q: So your professional experience allows you to do what you do today in the CARMAT

organization. What is it exactly that you do for CARMAT today?

Mr. Conviti:

Yes, I basically do three things. First of all, I try to run the program, which is quite complex because, on one hand, we have an external visibility, customers or patients, surgeons, medical world. And, on the other hand, I try to lead the buildup of CARMAT as a company with people that come from fields all over. And I try, as part of my responsibilities, to create a unique company with people from different backgrounds. My second commitment is to run a relationship with the financial community. I have to manage the relationship with the people that are investing in us or eventually want to invest in us and with the public authority that supports us. Finally, my third task is to manage communication over all the regulatory bodies and the external world. Those are my three major daily commitments.

Q: Now let’s get to the heart of the activity, The CARMAT Heart, can you tell us a little bit more

about that? What makes it so unique?

Mr. Conviti:

Let’s start with what is unique. First of all, our product is a total artificial heart. We are doing exactly what a surgeon does with a transplant. The three major characteristics of our approach are: First, is that all the blood has been in touch with biological tissues so we may not need or we may need a much smaller anticoagulation treatment than any other device. Second, is the fact that we are providing cardiac output according to the patient needs. If you try to climb stairs, quickly your heart rate goes up because your body needs more energy so it needs more blood. Or, when you go to sleep, your body is horizontal so you don’t have the same level of activity. Our machine is reacting absolutely in the same way. Not only in the physiological but also in the pathological. The third point is related to the fact that the CARMAT Heart has been designed in order to guarantee that all the blood that is inside gets out at any kind of beat rates. We also have some constraints; nature provides the human body with a cavity which is more or less the same independently of your gender or where you are born. We have some size limitations; the CARMAT Heart is, at present, mainly fit for male patients. In addition, the CARMAT Heart should work properly at least for 5 years. One patient that is transplanted today has around 50% chance to be alive in 10 years from now, so 5 years of life expectancy is going to be considered a very good result.

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Q: So today you have already implanted three patients. The third one just got back home if I well understand today’s news announcement. And now, what are the next steps for you?

Mr. Conviti:

For the next step, we are involved in a feasibility study. So, we have to test the feasibility of our Heart and in order to do that the protocol calls for four patients for 30 days each. At the moment, we have three patients with altogether, 450 days. Unfortunately the first two patients, for different reasons, passed away. So the next step is going to have another patient implanted, for that patient I cannot give more information due to the quite strict legislation related to clinical studies. Once this step is done we are going to move into a period of study in which we are going to have at least 20 patients and we have expectations for longer time of observation, usually six months and, with these patients, we are going to apply for CE marking and then start a step-by-step commercialization. Honestly, our business horizon is to be on the market by end of 2016/ beginning of 2017. We are working day and night to do so because we have a lot of patients, a lot of physicians, and a lot of families that are writing to us in order to be exposed to our machine. There is a lot of hope placed into our solution. The sad fact is that in Europe and in the US, transplant covers less than 5 % of the needs.

Q: Would you say that, looking back on what you have done until now, being innovative in the

healthcare field is never easy? What would you say are the biggest difficulties?

Mr. Conviti:

There are different ways to approach innovations. In my previous experiences I was involved in two major innovations. One is the introduction of the membrane oxygenator and the second one is a kind of large acceptancy of a biological valve into a valve change surgery. Those are quite significant innovations. If you link it to the history of those two very large fields, there was a kind of development continuity. But here it is really different; there is nothing like this; here, it is really a big breakthrough. There are two major points. One is the finance; we need a lot of money to do that and it is challenging for a company that is a kind of start-up to be able to run such a project. The second one is that it involves so many different technologies. When you put this all together; it is difficult to avoid negative intersections. So you need from one hand a lot of visibility; you have to spend a lot of time on the money raising part. But, on the other hand, you should be extremely careful when you are going to select a solution. For example, in order to improve the mechanical side you then weaken the technological or the biological side. Maintaining the right equilibrium requires to remain extremely cautious and always keep in mind the needs and objectives to carry on the project. That is the big challenge.

Q: You have been under the spotlight with the previous patients, how did you manage that?

Mr. Conviti:

It is quite difficult. In two ways I guess, we were proactive and reactive. On the reactive side we have been extremely helped by the visibility and the familiarity of Mr. Carpentier and his team of being under the spotlight. They have been under the spotlight on many other innovations before, so they know how to treat it. Then, we have chosen to stay only in France to do the feasibility study and, finally, the medical community overall was very supportive. Proactively, we have done a lot of internal meetings with our people who were going to be exposed; we had to make sure to voice a common message.

Q: You have to deal not only with your technology and development but also with what people

think about it.

Mr. Conviti:

That is the good and the bad side of the heart, everybody knows a lot about it. Here we are talking in a very specialized way about the way things act. With the heart, everybody understands that it is something that is inside each one of us. So it is something in which people have preconceived opinions and it is going to make things quite interesting for the media industry to expose more. At the moment of our first implant we had over a thousand media spots from all over the world, because everybody seemed interested.

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Q: We are getting to the end of our discussion; maybe the last thing I can ask you is what would be for you the most important lesson about this whole experience?

Mr. Conviti:

I would say that it is important to be extremely careful on people selection and people evolution. In a start-up people play an individual extremely important role. And you have to maintain competence and enthusiasm. Then you have to be selective, try to put what is most important. And finally, it is important to maintain equilibrium. You are going to be exposed to different things, try to balance your day properly and to maintain focus on what is the final aim of your company. So those three things, be motivational, be selective and be fair is what I recommend to people that are going to be exposed to these kinds of situations.