Duravest, Inc. was founded to make strategic investments in the field of medical products and medical technology. Recently, the company has concluded an agreement to make a capital investment in a highly promising, proprietary technology that seeks to improve the level of recovery in angioplasty and arterial intervention through the use of a naturally occurring hormone. This technology could change fundamentally the way in which such treatment is currently practiced and capture a significant share of the lucrative market for stents and balloons in angioplasty, currently estimated at between 5 and 8 billion dollars (US) a year. By investing at the pre-market stage, Duravest is seeking to optimize its return after the phase of human clinical trials is concluded.

Duravest was created in December 2001 specifically to take advantage of medical research opportunities. The company trades publicly on the NASDAQ (OTC-BB) under the symbol DUVT.

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THE TECHNOLOGY

The medical innovation involves the procedure known as angioplasty, which is used in the treatment of arteriosclerosis and other diseases which create induration of the arteries. This condition is fairly common, with well over a million such procedures carried out every year in North America. In 1997, a team of Canadian medical researchers working under the auspices of the Montreal Heart Institute (MHI) set out to determine why such diseases occurred more frequently in men than in women. The researchers elected to focus their efforts on the role of naturally occurring hormones unique to women and elaborate upon their potential role in blocking the onset of arteriosclerosis, or other induration of the arteries. After a set of preliminary trials, the researchers narrowed their focus to the role of a form of estradiol (technically, 17-beta-estradiol), a female sex hormone in the estrogen family. Initial animal trials proved rewarding. Use of estradiol dramatically improved the success of angioplasty procedures. Angioplasty is a non-surgical, interventional procedure that uses a tiny balloon to open blacked arterial passages. Frequently, the blocking recurs, requiring the patient to undergo further procedures; many patients require a stent inserted into their arteries to keep the passage open. For a number of years now, researchers have been looking for ways to improve the efficacy of the initial procedure by treating the angioplasty, balloon such that it impedes a re-blocking of the arterial passage. The technology backed by Duravest demonstrated in its early trials a dramatic increase in the success of this procedure by enhancing the expediency of the catheterization through inhibiting the onset of hyperplasia (a staling of the surrounding arterial tissue). The researchers announced results of their initial trials in the prestigious Journal of the American College of Cardiology in 2000, with a follow-up study published last year.

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THE MARKET

Duravest is backing the MHI research in order to profit from its introduction into the marketplace. There are two principal medical products that could potentially benefit from embracing the MHI research; intravascular stents and angioplasty balloons. Use of balloon catheters and stents in angioplasty, almost unknown a decade ago, has become the preferred means by which, to treat most arteriosclerotic conditions as an alternative to the much more invasive bypass surgery. The main problem is that the tiny balloons and stents are very expensive. Repetition of the procedure thus imposes a significant financial burden prompting the current demand in the marketplace for a more efficient product that can reduce the need for multiple interventions. The MHI research is directed specifically to this problem and the attractiveness of their approach is derived from two things.

First, estradiol is a naturally occurring hormone that has already been approved by the US Federal Drug Administration for other clinical uses. Therefore, the application of very small amounts of 17-beta-estradiol should not require the extensive FDA approval regimen, which dramatically lowers the time, effort and resources necessary to bring the coating substance to the marketplace.

Second, the market for angioplasty balloons and stents is at once larger growing and lucrative. Typically, the procedure cost well over $10,000, and the price of stents and balloons is such that currently hospitals frequently re-use the devices in order to contain costs. The introduction of a technique that reduces the frequency of the procedure should therefore be attractive in a marketplace that is already concerned about the price of material.

Therefore, the use of a coating substance such as estradiol in conjunction with existing stent and balloon technology to reduce the recurrence of blockage after an initial angioplasty is compelling. Further, anticipation is for rapid growth in the existing market as factors such as the growth of diabetes and other such diseases contribute to the overall need for coronary intervention.

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RISK ASSESSMENT

All new and innovating medical technologies carry with them risk. A principal assessment of those risks include consideration of the following factors.

1. Clinical trial results. As with any medical technology, much depends on the success of clinical trials. The initial trials have been highly encouraging; further trials, however, are necessary before the company can move to introduce a proprietary product into the marketplace. The company is anticipating a 12-18 month time-frame for the successful conclusion of those trials.
2. Competition. Currently there are several competing technologies in development to improve the performance of angioplasty procedure, ranging from lasers and cryogenic application, to other competing coating technologies. The marketplace is currently large enough to support competing technologies, and as the market grows, it can be expected that multiple types of devices will be implemented within the sphere of general angioplasty. The disposition of the marketplace, however, is not immutable and it is always possible that one or another technology can become dominant, even if it is not necessarily the most effective extant technology.

While the Duravest-sponsored research has shown highly encouraging result, and promises to further those through successful clinical trials, it should not be, assumed that the marketplace will necessarily embrace those results, nor that it will prove to be more efficacious than other, potentially competing technologies. Thus, the return on investment is potentially very high but carries with it an associated risk.

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DESCRIPTION OF ESTRADIOL

We include a description of the product, given by the product's developer, Dr. Tanguay. In that document, Dr. Tanguay indicates that his group early on understood the importance of using estradiol to help vascular healing. Starting from in vitro studies, Dr. Tanguay's group moved on to the porcine artery model which is the most successful model to predict a response in the human pathology.

The first study showed that local delivery of estradiol using a specialized local delivery catheter could reduce restenosis in an angioplasty model at one month. After a mechanistic study, (which is a theoretical study) there was confirmation of the better healing of the vessel, with improved neointimal function measured by acetylcholine infusion as well as a better expression of the ENOS expression as well as re-endothiliatization by the lectin expression. Finally, Dr. Tanguay's group evaluated this strategy in a more clinically relevant model, the stent porcine coronary artery model, where there was a renewed confirmation of restenosis as well as a lower inflammatory score.

These latter studies are ready for publication in the January 2 2002 edition of the Journal of American Cardiology, and is highly confidential. However, we can say that the study is highly significant in that estradiol was highly effective and that it protected not only the target area but gave equal protection to all vessels, i.e. in the brain and in other vascular systems. What is highly significant also is the isolation of a gene that is central in cell regrowth in the artery system.

Finally, it can be said that this technology could be used with a local delivery catheter as well as through a drug delivery stent, which appears to be very promising at this time in intervention cardiology.

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TESTIMONIAL

Local delivery of 17- beta estradiol for preventing Vascular intimal hyperplasia and of improving vascular endothelium function after vascular injury

For the last five years, I have been personally involved in the development of an experimental laboratory in hemodynamic where one of the main focuses of our lab is to evaluate local therapy strategies to reduce restenosis.

Reviewing the literature, we, myself and a Fellow Doctor Baskaran Chandrasekar, understood the important rationale of using estradiol to help vascular healing. There is several eveidence in vitro showing that estradiol will protect the "good" endothelial cells after angioplasty and also will prevent "bad" smooth muscle cells migration and proliferation. It can then reduce restenosis after balloon and stent implantation.

However there was no evidence in literature that the local delivery of estradiol or similar compound affecting the estradiol receptor could reduce restenosis and improve the vascular healing. Therefore for the last two years we have evaluated this idea in the porcine coronary artery model which is the most successful model to predict a response in the human pathology.

The first study showed that local delivery of estradiol using a specialized local delivery catheter could reduce restenosis in an angioplasty model at one month. We then followed up with a mechanistic study confirming the better healing of the vessel with improved neointimal function measured by acetylcholine infusion as well as a better expression of the ENOS expression as well as re-endotheliatization by the lectin expression. We also had a significant inverse correlation between the expression of NOS and restenosis confirming our earlier results. Finally we evaluated this strategy in a more clinically relevant model, the stent porcine coronary artery model, where we again confirmed reduction in restonosis as well as a lower inflammatory score (confidential non-published data)

Therefore, with these preliminary results, we filed for a patent to evaluate this potential solution to improve vascular healing after percutaneous coronary intervention in a human feasibility study.

This technology could be used with a local delivery catheter as well as through a drug delivery stent, which appears to be very promising at this time in intervention cardiology.

Dr. Tanguay 5 Juin

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