SurModics Inc (SRDX)

[Democritus_of_Abdera]

Dew – Regarding MicroIslet Encapsulation...

I had noticed when I was obtaining background on MediVas that it had an alliance with MicroIslet (www.gsm.uci.edu/clubpages/healthcare/documents/MediVasSlides.pdf). I wonder if MediVas is contributing to MicroIslet's encapsulation technology even though MicroIslet clearly states on its webpage that its technology is licensed from Duke University... MicroIslet’s webpage cartoon for the MicroIslet-P capsule includes a Poly-amino acid membrane separating an Alginate coating from an Alginate liquified core. MediVas specializes in membranes derived from amino acids.

I raise this issue because I view MediVas as a potentially serious competitor to SRDX.

MicroIslet, on the other hand, does not appear to me to have the resources to be an important competitor to Novocell. My negative sentiment about MicroIslet’s competitive position comes from SEC Form 424B3 (dated Nov 15, 2006) where they state:

“We anticipate that our existing funds will be sufficient to fund our operating expenses and capital requirements into the beginning of 2007. We expect to incur substantial additional costs, including costs related to ongoing research and development activities, preclinical studies and trials. In the event funding is not obtained we may be required to curtail operations. These factors raise substantial doubt about our ability to continue as a going concern, and our independent registered public accounting firm has included in its report on our 2005 audited financial statements an explanatory paragraph expressing substantial doubt regarding our ability to continue as a going concern. ”

MicroIslet’s anticipated schedule (per SEC Form 424B3, 11/15/2006) is:

2nd half 2007 (@ $10-12M) - Initiate phase I/II Human Allotransplantation Clinical Trials

2nd half 2008 (@ $4-5M) – File IND Application for Xenotransplantation Clinical Trials

2008-2009 – Initiate Phase I/II Xenotransplantation Clinical Trials

2010 – Initiate Phase III Human Clinical Trials

2010-2011 – Complete Human Clinical Trials and Submit Product to FDA

2011 – Manufacture, market and sell product.