Executive Summary

    The company presently holds twelve patents in the areas of image-guided medical devices and anesthesia and analgesia, and has six additional patents pending. Most of its revenue is presently generated through the company’s pharmaceutical partners, including but not limited to: Baxter, E. Merck, Laboratories PiSA, Nicholas Piramal, Novartis, Panion BF Laboratories and RxElite. In the fourth quarter, the company will introduce a second generation of its image-guided medical technology.

Anesthesia & Analgesia

    In December 2000, MINRAD acquired the assets of Celltech Medeva’s inhalation anesthetic business and modern manufacturing facility in Bethlehem, Pennsylvania. MINRAD produces three inhalation anesthetics: enflurane, isoflurane and Sevoflurane in the facility, which they sell, to leading acute care pharmaceutical companies around the world.

The acquisition reunited Messrs, Burns and McNeirney with Dr. Ross Terrell, the Vice President of Research of the subsidiary, with whom they had collaborated in pioneering the introduction of modern halogenated ethers as inhalant anesthetics while with the BOC Health Care Group. Dr. Terrell, who remains an active Research Fellow with MINRAD, was the inventor of enflurane, isoflurane and desflurane; and was acknowledged by the Pharmaceutical Manufacturer’s Association (“PMA”) as Man of the Year in 1991.

    Since the acquisition, MINRAD has sharply reduced the manufacturing costs in the facility, and is presently re-tooling the facility to allow the manufacture of sevoflurane (process patent, Terrell, issued).

Image Guidance

    MINRAD has been a pioneer in real time, fluoroscopic image guidance for medical devices since 1996. The company’s x-ray and laser technology enables medical professionals to precisely (accuracy: +/-1 mm at 1 meter) visualize both the surface point of entry and the true angle of approach required to reach an internal treatment area or biopsy site. Company products have broad application in anesthesiology, neurosurgery, orthopedics and interventional radiology. The first product from this technology platform, the Dual Radiation Targeting System, met with technical success (see: Schwend et ala, “Accuracy of Fluoroscopically Assisted Laser Targeting of the Cadaveric Thoracic and Lumbar Spine to Place Transpedicular Screws”, Journal of Spinal Disorders, October 2000, pp 412- 418 and Moreland et ala, “Vertebroplasty: Techniques to Avoid Complications”, The Spine Journal, January/February 2001, pp 66-71.), but did not achieve the penetration envisioned by the company due to issues with ease of use.

    In the fourth quarter, MINRAD intends to introduce its patented (Kennedy and McNeirney) second-generation real time image guidance technology. The United States Food & Drug Administration (“FDA”) accepted device, SabreSource, mounts on a C-Arm fluoroscope, and, like its predecessor, is accurate to +/- 1mm at 1 meter and allows the surgeon, anesthesiologist, or interventional radiologist to turn off the x-ray and follow the laser beam to the sub-surface target, substantially reducing patient and OR staff exposure. MINRAD intends to accompany the launch of the SabreSource with the launch of the company’s patented (McNeirney and Landi) Light Sabre line of disposable devices (six lines presently have FDA acceptance) and patented optically clear SabreSource sterile drape (McNeirney and Burns). These products illuminate when the laser beam is projected through them allowing a physician to target and access a sub-surface target, such as a potentially malignant lesion, with an accuracy of +/-3mm at a depth of 100mm (approximately 4 inches).

Conscious Sedation

    Conscious Sedation (“CS”) is a program with an initiative that leverages MINRAD’s two-core competencies medical device and inhalation anesthetic competencies. The CS program, patent applied (Burns, McNeirney, and Terrell), is focused on a drug/drug delivery system to allow halogenated ethers to be employed as inhalant analgesics. The goal of a system of this type would be to supplant nitrous oxide, sedative hypnotics and narcotic analgesics in both the pre-hospital and hospital market places.

Inhalant anesthetics rapidly move through the relaxation and sedation phases of inhalant anesthetic induction – sometimes as rapidly as 20 seconds.     MINRAD’s drug delivery technology will limit the inspired gas concentration to a level that provides inhalant analgesia while leaving the patient aware and responsive. This will be done without the risk of toxicity associated with nitrous oxide or the need to use scheduled drugs and reversal agents with the sedative hypnotics and narcotic analgesics. In this regard, the company will carefully monitor recovery rate and discharge time during our clinical trials.     Conscious Sedation (“CS”) is a developmental stage program that most undergo clinical trials and receive health agency approvals before it can be marketed.

Outside Directors

    MINRAD’s outside directors have wide experience in both clinical and commercial health care.

    Dave DiGiacinto is a Senior Managing Director of SpencerTrask Specialty Group (“STSG”). Dave joined SpencerTrask Specialty Group in 2000 bringing with him 18 years of experience in various management roles and business disciplines, which he acquired at Pfizer. Dave became a Director in 2002.

    Dave Donaldson, FDS, MDS, is Professor and Head of the Department of Oral Biology and Medical Sciences at the University of British Columbia. Dave is an expert in the areas of pain management and anxiety control who has published over 120 scholarly papers on related subjects. Dr. Donaldson became a Board Member in June 2004.

    Don Farley is the CEO of Spenser Trask Specialty Group. Previously he was the President of Pfizer’s consumer health group. Don became a Director in 2002.

    Duane B. Hopper has served as a director of MINRAD since 2004. He was President, CEO, and COO of Graphic Controls Corporation from 1992 to1998, when it was acquired by Tyco International, Inc. He served in executive positions with other medical products companies such as: Air Products and Chemicals, Inc.; Zimmer, Inc.; Surgilase, Inc.; and Ohmeda, Inc. He earned his Masters in Management Degree from the Kellogg Graduate School of Management at Northwestern University in 1974.

    Robert Lifeso, MD, a co-founder of the company, is the Director of the Spine Center at Erie County Medical Center and has previous stints as Chief of Orthopedic Surgery at the King Faisal Hospital in Saudi Arabia and the Veteran’s Center in Buffalo. Dr. Lifeso has been a Director since 1994.

    John Rousseau is a Managing General Partner of New England Partners (“NEP”). He has held several senior management positions including Homart Development (Sears) and was a Senior Partner with the law firm of Hale and Dorr. John has been a Director since 2002.

    Theodore Stanley, MD has served as a director of Minrad International since March 2007. He is a Professor of Anesthesiology at the University of Utah, where he has been employed for the past 30 years. Dr. Stanley graduated from Columbia College and then Columbia University Medical School before completing a residency in anesthesiology at the Columbia-Presbyterian Medical Center. Dr. Stanley was director of research at the University of Utah for over 20 years and is internationally known for his developmental work on opioids, other intravenous anesthetics and novel drug delivery techniques. In 1985, he co-founded Anesta, a drug delivery company with two FDA-approved products: fentanyl Oralet and Actiq. In 1996, Dr. Stanley co-founded ZARS, a specialty pharmaceutical company of which he is currently Chairman of the Board.

    Brett Zbar, MD has served as a director of Minrad International since March 2007. He is a Principal at Aisling Capital LLC, a private equity firm that invests in life science companies. Previously, Dr. Zbar was an Associate Principal at McKinsey & Company and a member of the Pharmaceuticals and Medical Products practice. Prior to joining McKinsey, Dr. Zbar trained on the Osler internal medicine service at Johns Hopkins Hospital. He received his MD from Harvard Medical School and his BA from Yale College.