Artimplant receives CE mark for three new Artelon® Spacers

Västra Frölunda, Sweden, July 14, 2006 The biomaterials company Artimplant, has received CE mark for its Artelon® STT Spacer, Artelon® MTP Spacer and Artelon® CMC Spacer Arthro for minimally invasive surgery. These are three of four products under the development and license agreements with Small Bone innovations, Inc. (SBI), signed in October 2005. The fourth spacer product under that agreement, Artelon® DRU Spacer, received CE mark in March 2006.

Lars-Johan Cederbrant, CFO and Interim CEO of Artimplant, said; “Since the four development and license agreements were signed with SBI in late October 2005 we have worked diligently to develop these new spacers. We are very pleased with the fast development process and our cooperation with SBI. It is encouraging that our team managed to expand the spacer concept to additional joints in the upper and lower extremities as well as develop Artimplant’s first product for minimally invasive surgery in less than nine months. Approximately 1200 patients with thumb base osteoarthritis have successfully been treated in the USA and Europe since the Artelon® CMC Spacer received clearance for marketing. Together with the recent addition of a larger CMC spacer the new spacer products almost double the market potential of spacer products. This significantly contributes to establishing Artelon® as the biomaterial of choice and the spacer concept as the preferred therapy for treatment of osteoarthritis in small bones and joints.” Artimplant will receive milestone payments from SBI when regulatory approvals have been granted both for Europe and USA. As communicated in October 2005 total revenues, to Artimplant, from the four new spacer products are estimated to exceed 50 million SEK over the next five to six years. THREE NEW SPACERS The new CE marked spacers are intended to treat osteoarthritis (OA) – one of the most common joint diseases in the hand and foot. The Artelon® Spacer is preserving the anatomy and is buffering the bone on bone contact that results from osteoarthritic joint degeneration. The spacers are made of Artelon®, a unique long-term degradable biomaterial that acts as a temporary scaffold to facilitate formation of new host tissue. The unique capacity of Artelon® in various medical applications lies in the interaction between a biomaterial with excellent material properties and the human body´s inherent ability to heal itself and to form new tissue. New spacer for minimally invasive treatment of OA in the thumb base joint Artelon® CMC Spacer Arthro is intended for minimally invasive procedures in the thumb base joint. Arthroscopic surgery will reduce the invasiveness and simplify the procedure while maintaining the patients’ anatomy. More patients will be able to undergo surgery early enough to halt joint destruction at an early stage. Treatment of osteoarthritis of the STT joint of the hand Artelon® STT Spacer is a new spacer for a joint adjacent to the CMC-I joint. OA is almost as common in the STT joint as in the CMC-I joint. Patients with OA in both the CMC-I and STT joints that previously were excluded from rehabilitation with the Artelon® CMC Spacer will now have the possibility to receive the benefits of the spacer concept. The first spacer for treatment of OA in a foot joint Artelon® MTP Spacer is a spacer for the treatment of OA in the joint at the base of the big toe, the MTP joint. OA of the MTP joint is a common condition resulting in e.g. Hallux Rigidus. Mobility in the MTP joint decreases, usually in combination with increased pain and ultimately the joint becomes completely stiff. Pain and difficulty bearing weight are often associated with significant disability. The results of conventional surgical treatment have not proven successful and therefore surgery is only done after lengthy medical treatment with analgesics and anti-inflammatory drugs. Successful study A pilot study with Artelon® CMC Spacer for treatment of OA in the base of the thumb conducted by Artimplant has been published in the March 2005 issue of American Journal of Hand Surgery. The results from the study show that patients with the Artelon® Spacer experienced significantly better grip strength compared to a control group of patients treated with tendon interposition arthroplasty.