Inion Oy. Preliminary Results 12 months ended 31 December March 2008

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2 Inion Oy Preliminary Results 12 months ended 31 December March

3 Chris Lee Chief Executive Officer Julien Cotta Chief Financial Officer 3

4 Our Mission Inion aims to be the leading company focused on the development and successful commercialisation of innovative & unique biodegradable and bioactive surgical implants in selected high-value orthopaedic market segments 4

5 Outcome of Strategic Review Reduce business units from Five to Two Focus on Spine and Specialty Orthopaedics (Foot & Ankle and Upper Extremity) market segments. Divest other business units Geographical focus Priority market, USA and select territories in rest of world Change distribution channels Move from corporate partnerships to independent distributor networks Shift emphasis from R+D to commercial enterprise Close research lab and long-term projects Hire experienced commercial leadership 5

6 Operational Highlights Hired experienced commercial leadership Reduced headcount and cost base Restructured and realigned internal operations Distribution network radically overhauled US operation fully functioning Portfolio enhanced with new products Transition from R&D lead to commercial orientation now complete Sales in line with expectations Sustainable platform for growth 6

7 Financial Review Julien Cotta Chief Financial Officer 7

8 Income Statement Year ended 31 December Difference Revenue (0.5) Cost of sales (3.6) (4.8) 1.2 Gross profit Other operating income (0.3) Research and development costs (5.4) (5.7) 0.3 Selling and marketing (3.9) (5.5) 1.6 Administrative expenses (4.7) (4.5) (0.2) Operating loss (12.0) (14.1) 2.1 Finance expense (0.3) (0.3) - Loss before income tax (12.3) (14.5) 2.2 Income tax (0.1) (4.1) 4.0 Loss for the year (12.4) (18.6) 6.2 8

9 Income Statement one off items Year ended 31 December 2007 Before one- off items One-off items After one- off items Revenue Cost of sales (3.4) (0.2) (3.6) Gross profit 1.8 (0.2) 1.6 Other operating income Research and development costs (4.8) (0.6) (5.4) Selling and marketing (3.6) (0.3) (3.9) Administrative expenses (4.4) (0.3) (4.7) Operating loss (10.6) (1.4) (12.0) Finance expense (0.3) - (0.3) Loss before income tax (10.9) (1.4) (12.3) Income tax (0.1) - (0.1) Loss for the year (11.0) (1.4) (12.4) 9

10 Income Statement before one-off items Year ended 31 December Before one- Before one- Difference off items off items Revenue (0.5) Cost of sales (3.4) (4.1) 0.7 Gross profit Other operating income (0.3) Research and development costs (4.8) (5.6) 0.8 Selling and marketing (3.6) (3.8) 0.2 Administrative expenses (4.4) (3.7) (0.7) Operating loss (10.6) (10.8) 0.2 Finance income/(expense) (0.3) 0.1 (0.4) Loss before income tax (10.9) (10.7) (0.2) Income tax (0.1) (0.1) - Loss for the year (11.0) (10.8) (0.2) 10

11 Revenue By product Difference By region Difference Spine (0.7) US (0.7) CMF Specialty Orthopaedics S America (0.1) Sport Europe (0.1) Dental (0.4) RoW Total (0.5) Total (0.5) 11

12 Balance Sheet Difference Non-current assets (0.5) Current assets (17.4) Total assets (17.9) Non-current liabilities (4.6) (5.8) 1.2 Current liabilities (4.6) (9.7) 5.1 Total liabilities (9.2) (15.5) 6.3 Shareholders equity (16.1) (27.7) 11.6 Total shareholders equity and liabilities (25.3) (43.2)

13 Cash Flow Statement Difference Net cash used in operating activities (9.9) (11.3) 1.4 Net cash flow from investing activities Net cash flow from financing activities (6.6) (1.7) (4.9) Decrease in cash and cash equivalents (3.6) (1.9) (1.7) Cash and cash equivalents at 1 January (1.9) Cash and cash equivalents at end of period (3.6) 13

14 Cash Burn Cash flow Difference Decrease in cash and cash equivalents (3.6) (1.8) (1.8) Repayment of $6.0m loan Disposal of other financial assets at fair value through profit or loss (13.5) (11.5) (2.0) Net cash burn for the period (12.4) (13.3) 0.9 Cash burn per month (1.0) (1.1) 0.1 Balance sheet Gross cash (16.6) Capital loans (2.3) (2.3) - Borrowings (0.7) (6.4) 5.7 Finance lease liabilities (2.5) (3.1) 0.6 Total debt (5.5) (11.8)

15 Operational Review Chris Lee Chief Executive Officer 15

16 A New Biodegradables Business Clear strategy focus on exciting target markets New structure means sales process now more consistent, predictable and transparent New products creating an offering surgeons and our distributors want Management team that believes in biodegradables and that knows how to sell orthopaedic implants Expected revenue growth of 35% 45% in

17 Key Activities 2008 Divestment options Development of US model Value proposition to support new products New product approvals/launches Continued focus on cost structure Inion OptimaPLUS assessment of commercial opportunity 17

18 Divestment Options Cranio Maxillo-Facial (CMF) In negotiations with interested parties Business continues to grow Validating further developments to enhance value Dental Expect to announce deal closure in H1 IP/Assets Expect to close deal on small molecule assets in H1 18

19 The US Leadership Team Scott Pravda, President, Inion USA Co-founded Hand Innovations (2000) 350 sales reps, pan-us network, sales of $60M, acquired by DePuy (2006) 4 Regional Sales Managers West Coast Josh Sewell RSM with Nexa where he enjoyed great success and previously managing his own Orthopaedic distributorship Central Dave Hawkes Highly successful career in sales and marketing with Stryker and latterly Depuy South East Chris Shepherd RSM with Pegasus Biologics and Kinetikos Medical providing great market knowledge and customer contacts North East Eric Halbower Field marketing and RSM experience with DePuy and a background in Spine and Biologics 19

20 The US Opportunity Spine Cervical Plating 187,000 procedures per annum 1 357M market value 1 Value per procedure 2,200 Market share in % Specialist surgeons perform cases per month One Surgeon contributes between 400K 500K pa 1 Source: Millennium Research Group

21 The US Opportunity Foot & Ankle Ankle Plating System (Inion FreedomPlate ) 140,000 procedures per annum 1 Procedure price 1,700 2,200 Market share in % Two customer groups F&A surgeons and Podiatrists Unique product in underserved market Multiple applications for FreedomPlate have potential to expand sales revenues 1 Source: Millennium Research Group

22 What Do Our Customers Think? Ohio Distributor The S-1 is a truly unique offering that enhances my reputation as a Spine distributor Spine surgeon West Virginia I have been waiting for an alternative to the Mystique plate which works and this fits the requirement in every respect Surgical Podiatrist Chicago The Freedom Plate is the real deal. Versatile easy to use and customisable to every single patient 22

23 US Business Model 31 Independent distributors hired 22 Specialty orthopaedics 9 Spine 60 Planned by end H and 75 by year end Sales rep coverage, 350 by year end Dedicated sales trainer relocated from the UK $2M investment in instrument sets in 2008 Sales doubled each month since December

24 Distributor Profile Exclusive Spine or Extremity distributor No other Biodegradables in their portfolio Strong surgeon relationships in their territories Experienced and trained sales force Attending every surgical case performed Reps paid on success Distributor commission 25% (20 22% the norm) 24

25 Value Proposition New product launch plans Clinical evidence Strength and degradation Versus the Gold Standard Focus on the proprietary position of Inion Optima Economic benefits Surgeon champions National and local podium presentations New marketing material to capture value 25

26 Our Product Portfolio 2008 Q108 Spine S-1 Two-level Plate Product roll-out OUS BioRestore (BioGlass) Bone Filler Product roll-out US & OUS S-2 Lumbar Plate Product roll-out OUS S-1 Two-level Plate Initiation of clinical study S-1 Cervical Plate Case reports BioRestore (BioGlass) Bone Filler Initiation of clinical study S-2 Lumbar Plate Initiation of clinical study S-1 Two-level Plate Product roll-out US S-1 Cervical Plate Study results S-2 Lumbar Plate Product roll-out US Q208 Q308 Q108 Q208 Q408 Specialty Orthopaedics HEXALON Foot & Ankle Product roll-out US & OUS BioRestore (BioGlass) Bone Filler Product roll-out US & OUS OTPS Ankle Plate Study Results OTPS New Procedure kits Roll-out US & OUS OTPS Headless Screws FDA approval & CE-mark OTPS New Instruments Roll-out US & OUS Approval obtained Approval pending New product 26

27 New Product Approvals/Launches Inion BioRestore Bone Graft Substitute Approved in US and EU 8 clinical sites identified (4 in the US and 4 in EU) Study data available with full launch in Q Inion S-1 (Cervical) and S-2 (Lumbar) Approval expected imminently in US (approved in EU) Limited launch planned for end Q2 (Trial sites and high volume users) Full worldwide launch expected in Q

28 New Product Approvals/Launches New universal instrument set for Specialty Ortho Design freeze in March 2008 Worldwide roll out in Q Biodegradable cervical cage and self reinforced headless screws expected to complete development by year end 28

29 Key Market Activity 2008 Area Sales Manager for Northern Europe New distributors hired in Italy, Benelux and Germany Reviewing distribution options in France and UK Recertification on sales training in all key markets Drive growth in Korea, Taiwan and Australia Registration of full portfolio in China 29

30 Summary Inion is positioned for sustainable growth Sales execution is the priority Early signs in the US are encouraging Divestments will provide cash inflow and sharpen focus on target segments OptimaPLUS trial will define commercial viability Value proposition will accelerate adoption 30

31 Questions 31

32 Appendix 32

33 New Board of Directors Göran Ando Chairman Chairman - Novexel SA/Trigen Ltd Vice Chairman Novo Nordisk A/S and S*Bio Pte Ltd Chris Lee CEO Julien Cotta CFO Jim Beery NED Peter Jensen NED Peter Allen NED David Anderson NED Markku Silen NED > 20 years medical devices sector Johnson & Johnson devices subsidiaries Previously Whatman Plc, Chiron UK & PowderJect Senior Counsel Covington & Burling Pre 2001 Senior VP and GC of GSK Plc 21 yrs - GSK/SKB CFO at Abacus Group Plc Previously deputy CEO and CFO Celltech Group Plc President and CEO Gentis, Inc. >20 yrs medical devices >25 yrs management experience. Director Nordic region Accenture This New Board was formed between September 2006 and May

34 New Executive Leadership Team Chris Lee Chief Executive Officer More than 20 years in the medical devices sector holding senior commercial roles at Johnson & Johnson s devices subsidiaries. He was President, EMEA of Ethicon prior to joining Inion in January 07 and Global VP of DePuy s Trauma, Extremities and Biologics business prior to that. Julien Cotta Chief Financial Officer A Chartered Accountant from Coopers & Lybrand with significant experience of establishing and running best financial practice for organisations within the life sciences sector. Prior to joining Inion held the position of Group Financial Controller at Whatman Plc, a FTSE 250 listed UK company following his role as VP Financial Accounting at Chiron UK. David Follows Chief Commercial Officer 20 years experience within major medical devices subsidiaries of Johnson & Johnson involving significant responsibilities within sales and marketing operations. Prior to joining Inion he was Managing Director of Ethicon Endo-Surgery UK where his commercial strategies doubled sales to 70m over 5 years. Scott Pravda President, Inion Inc., USA An impressive track record of building successful sales organisations for medical device companies in the US. In 2000 co-founded Hand Innovations Inc. and as Chief Sales Officer established a sales organisation representing 350 independent sales agents across all 50 US states. The business was acquired by DePuy (a J&J company) in 2006 when sales had grown to $60m. 34

35 US Spine Market Autograft, allograft, DBM; 390,600 $197M $1096M 2007 Cervical; 105,780 $305M Thoracic; 15,120 Biodegradables Lumbar; 5,745 Cervical; 19,350 Thoracic; Autograft, allograft, DBM; 311,600 $230M >$100M 2010 $337M Cervical; 105,400 $509M 11,200 $576M Lumbar; $1578M 76,725 Thoracic; 17,025 Lumbar; 5,520 Cervical; 18,600 Thoracic; 11,350 Lumbar; 81,425 Synthetics; 83,900 $111M Anterior plating systems Interbody fusion devices Bone graft substitutes BMP; 100,000 $788M Synthetics; 99,200 $148M BMP; 137,000 $1,200M Anterior plating systems Interbody fusion devices Bone graft substitutes Source: Medtech Insight, 2007 & Millennium Research Group,

36 US Foot, Ankle, and Toe 2003 Diagnoses, total 17,414,655 Procedures, total 1,591,389 Sprains; 6,546,558; 37 % Osteoarthritis; 785,722; 5 % Acquired deformities; 625,801; 4 % Enthesopathy; 3,778,671; 22 % Dislocations ; 135,104; 1 % Fractures; 5,542,800; 31 % Collateral ligament repair/ repair malunion/ nonunion; 17,395; 1 % Correction of hallux valgus, hammertoe, or soft tissue; 966,111; 61 % Arthroscopy; 67,503; 4 % Fusion; 66,157; 4 % Joint replacement; 8,024; 1 % Open reduction, fracture w/ or w/o fixation; 50,878; 3 % Closed/ percutaneous reduction of fracture w/ or w/o fixation; 408,997; 26 % Data includes both, hospital and outpatient clinic diagnoses & procedures Source: Knowledge Enterprises,