Healthcare Industry News:  Intra-operative Imaging 

Devices Surgery

 News Release - January 29, 2007

Novadaq imaging system receives FDA clearance for use during plastic reconstructive surgery

TORONTO, Jan. 29 (HSMN NewsFeed) - Novadaq® Technologies Inc. (TSX: NDQ ), a developer of medical imaging systems for the operating room, announced today that it has received 510K clearance from the United States Food and Drug Administration (FDA) for its imaging system for use during plastic reconstruction and micro surgery. Novadaq plans to market the system under the name HELIOS(TM), which is the first fluorescent imaging system available for use during plastic reconstructive surgery. In plastic reconstructive surgery, the system enables surgeons to:

- Pre-operatively visualize blood flow as an adjunct for the evaluation of circulation in the tissue targeted for harvest, commonly referred to as a "flap", A flap is tissue taken from the patients own body, such as from the abdomen, used to create the new body part;

- Intra-operatively assess blood flow in the co-joined vessels which are responsible for providing adequate blood supply to the tissue and the quality of blood perfusion to the newly created body part; and

- Post-operatively continue to adjunctively evaluate blood perfusion to the tissue in the newly created body part which can be indicative of a successful or unsuccessful reconstruction.

"I wish to thank Drs. Michel Samson and Martin Newman, Plastic Surgeons at the Cleveland Clinic Florida in Weston, Florida who observed the use of the SPY System during an open heart coronary artery bypass grafting procedure, and saw the potential clinical value of imaging during breast reconstruction and potentially other reconstructive procedures," said Dr. Arun Menawat, President and Chief Executive Officer Novadaq Technologies Inc. "These two visionary surgeons note significant clinical benefits to imaging during these very complex procedures, which represent a large potential new market opportunity for Novadaq."

During any plastic reconstructive surgery the maintenance or creation of adequate blood supply to tissue is integral to the procedure, as inadequate blood flow in reconstructed tissue, such as a newly created breast, can lead to serious complications such as necrosis, partial or total flap loss. A 10-year retrospective study of 758 breast flap procedures published by Gill et al., in Plastic and Reconstructive Surgery in April 2004 reported that complications can occur in up to 30% of all breast reconstruction surgeries and that 5% of patients undergoing breast reconstruction will return to the operating room due to complications. Use of the HELIOS System may allow surgeons to quickly identify areas of inadequate blood perfusion and potentially make immediate revisions to the surgically reconstructed area that ultimately may save the newly constructed body part, prevent life altering complications and improve the overall outcome of the surgery for many patients.

Breast reconstruction procedures are extremely complicated, typically lasting as long as 8-12 hours, and therefore can be very expensive procedures. Novadaq estimates that the average cost of a breast reconstruction procedure can exceed $50,000 (USD). Most patients undergoing these procedures are either being treated simultaneously by mastectomy for breast cancer or are already breast cancer survivors who have undergone a prior mastectomy.

According to the American Society of Plastic Surgery (ASPS), in 2005, approximately 1.5 million plastic reconstruction procedures were performed by the members of the society. In October of 1998, federal legislation was signed in the United States, requiring health plans and health insurers providing benefits with respect to mastectomy procedures, to cover the cost of reconstructive breast surgery for women who have undergone a mastectomy. Novadaq believes that the HELIOS System will add value in the most complex of plastic reconstructive surgeries and therefore estimates the potential annual market opportunity to be approximately 300,000 procedures.

About Novadaq Technologies

Novadaq Technologies Inc. (TSX: NDQ ) develops and commercializes medical imaging devices for use in the operating room. Novadaq's proprietary imaging platform can be used to visualize blood vessels, nerves and the lymphatic system during surgical procedures. Novadaq's SPY® Intra-operative Imaging System, commercially available worldwide, enables cardiac surgeons to visually assess coronary vasculature and bypass graft functionality during the course of open-heart surgery. Novadaq's OPTTX® System which received CE Mark approval in November 2006, is aimed at the diagnosis, evaluation and treatment of wet Age-related Macular Degeneration (AMD) by using the same core imaging technology that is used in the SPY System. The HELIOS System, which received FDA clearance in January 2007, is the first fluorescent imaging system available for use during plastic reconstructive surgery allowing surgeons to evaluate pre- and intra-operative blood flow, as well as post-surgery perfusion. Novadaq's LUNA(TM) system is designed to enable surgeons to visualize nerve bundles during the course of urological and neurological procedures. LUNA has been granted a license for use by Health Canada. For more information, please visit the company's website at

This press release contains certain information that may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management's future outlook and anticipated events or results, and may include statements or information regarding the future financial position, business strategy and strategic goals, research and development activities, projected costs and capital expenditures, financial results, research and clinical testing outcomes, taxes and plans and objectives of or involving Novadaq. Without limitation information regarding future sales and marketing activities, the utility of and the Company's plans for the HELIOS System and the size of the potential market for HELIOS, is forward-looking information. Forward-looking information is based on certain factors and assumptions regarding, among other things, market acceptance and the rate of market penetration of the HELIOS System and the number of plastic reconstruction procedures performed annually in the United States. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what we currently expect. These factors include risks relating to the transition from research and development activities to commercial activities, risks related to the establishment and maintenance of a direct sales force, risks associated with market acceptance and adoption of the HELIOS System, risks related to third party contractual performance, dependence on key suppliers for components of the HELIOS System, regulatory and clinical risks, risks relating to the protection of intellectual property, risks inherent in the conduct of research and development activities, including the risk of unfavorable or inconclusive clinical trial outcomes, potential product liability, competition and the risks posed by potential technological advances, and risks relating to fluctuations in the exchange rate between the US dollar and the Canadian dollar. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While Novadaq may elect to, Novadaq is under no obligation and does not undertake to update this information at any particular time, except as required by law.

This press release was prepared by management from information available to January 23, 2007.

Source: Novadaq Technologies

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