October 24, 2007

Frost & Sullivan Lauds Small Bone Innovations Aggressive Growth Strategies in the Orthopedic Device Industry

Palo Alto, Calif. — October 24, 2007 — Frost & Sullivan selected Small Bone Innovations (SBi), Inc. as the recipient of the 2007 North American Frost & Sullivan Award for Entrepreneurial Company of the Year. SBi, through its focus on tissue-based and ‘life-altering’ treatment technologies, has established their position in the $35 billion and still growing orthopedic industry.

SBi’s unique and unrelenting focus on addressing unmet needs in the treatment of small bones and joints of the upper and lower limbs has been augmented by the acquisition and integration of several smaller, established device makers.

“Despite the focus on large bone and joint replacements, more than 50 percent of doctor visits and nearly 24 percent of all orthopedic surgeries in the United States are related to small bone and joint problems,” says Frost & Sullivan Research Analyst Archana Swathy. “The lack of emphasis on innovation in the small bone and joint sector reflects in a highly fragmented market containing a host of single product companies.”

The highly experienced SBi team that comprises orthopedic surgeons and industry management aims to transform the treatment methods of small bone and joint impairments by creating a totally new industry model.

Remarkably, within just 30 months of its launch, SBi incorporated 61 product systems in three key product platforms, namely arthroplasty, trauma, and tissue technology. SBi is applying highly innovative technologies to each of the three platforms by focusing primarily on a ‘single source of supply’ concept.

The RE-MOTION™ Total Wrist System, PRECISE SD™ volar distal radius plating, RingFIX™ foot and ankle fixation technology and the SBi rHead™ Elbow Management System have found ready takers within the arthroplasty and trauma sectors.

As for tissue technology, the rapidly evolving line of Artelon® Spacers is fast replacing more radical procedures to eliminate pain and restore function to the thumb joint.

For trauma, SBi has a complete array of internal and external fixation systems including instrumentation to repair and reconstruct small bones of the upper and lower extremity.

“The small bones and joints, due to their anatomical complexity and disposition, make surgical access very difficult,” notes Frost & Sullivan’s Swathy. “As a result, SBI’s RE-MOTION™ Total Wrist System comes with the Precise Guidance Technology (PGT™) Instrumentation to offer a step-by-step, predictable and reproducible approach to these intricate procedures.”

Recognizing the need for innovation and a fast growing yet demanding aging patient base, SBi is working toward becoming the leading solution provider for small bone and joint impairments all over the world. The company has a direct sales and distribution network covering 39 countries.

In 2007, surgeons are, for the first time, using SBi’s new UNI-Elbow™ Radio Capitellum System. This year, the company also launched its STABILITY™ Sigmoid Notch Total DRUJ System™, the first ‘truly anatomical’ distal radial-ulnar joint replacement system.

“SBi also announced a series of new technology acquisitions and licensing agreements in Europe as an assertive move towards expanding their lower limb product line such as the RingFIX™ system used to treat foot and ankle bones and joints severely affected by diabetes,” notes Swarthy.

Each year Frost & Sullivan presents this Award to the company that has demonstrated excellence within its industry. The Award is based on numerous factors including the company’s business development, competitive strategy, and leadership within a particular Frost & Sullivan industry research group. The recipient has demonstrated superior market growth skills through significant gains in the market during the research period.

Frost & Sullivan Best Practices Awards recognize companies in a variety of regional and global markets for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analysis, and extensive secondary research in order to identify best practices in the industry.

About Small Bone Innovations, Inc.
Small Bone Innovations, Inc. (SBi) was founded in 2004 by Viscogliosi Brothers, LLC, (VB), the New York-based merchant banking firm that specializes in the musculoskeletal/orthopedic sector. VB created SBi as the first company to focus purely on small bone & joint science. By integrating established companies and professionals in the field, SBi can offer a broad, clinically proven portfolio of products and technologies to treat trauma and diseases in small bones & joints. Today, SBi has more than 130 employees at facilities in New York, NY, Morrisville, PA, and Bourg-en-Bresse, France.

SBi closed on the sale of $42.2 million of its securities in December 2005. At the time, based on data provided by Venture Source, it was the largest venture capital investment ever recorded in the field of orthopedic devices.

SBi was a 2006 recipient of Red Herring magazine’s annual “Red Herring 100 North America” award, recognizing SBi as one of the nation’s leading technology companies and the only orthopedic device company selected among an initial entry of more than one thousand firms.

Additionally, SBi’s Artelon® CMC-I Spacer, developed for patients with osteoarthritis at the base of the thumb, was featured on the cover and highlighted within Medical Design Technology magazine’s “Year of Innovation” issue as one of the most fascinating technologies influencing the medical device industry. Medical Device & Diagnostic Industry magazine named SBi to its list of “50 Companies to Watch” in 2006, noting, “Small Bone Innovations is going against the grain in its determination to become a market leader in the small bone & joint device sector.”

For more information on SBi, please visit: www.totalsmallbone.com

Anthony Viscogliosi, Chairman & CEO
212.583.0370 ext. 2100

About Frost & Sullivan

Frost & Sullivan, the Growth Consulting Company, partners with clients to accelerate their growth. The company's Growth Partnership Services, Growth Consulting and Career Best Practices empower clients to create a growth focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents. For more information, visit http://www.awards.frost.com.

Stacie Jones