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Orthopedic News Roundup 29-Jul-05 BY HUYEN NGUYEN, JULY 29, 2005

Earnings: Please refer to the table (below) for individual company sales and earnings.
It's all about earnings this week...

Biologics: Clearly, the big winner this week is LifeCell Corp. who reported strong earnings on Monday stock was up 24% at the close. The company now trades at $21.99 compares to $8.58 a year ago. In 2Q:05, the Company's flagship product, AlloDerm® Regenerative Tissue Matrix, reported 71% increased over 2Q:04, while Graft Jacket® and AlloCraft™DBM increased 34% for the quarter. Allograft company, Osteotech, also reported 2Q:05 with continual net loss for three consecutive quarters, but have raised revenue guidance for the year. The Company's Grafton® DBM product increased by 28% year-over-year. Research and development company, OrthoLogic, is continuing advancing its Chrysalin® product platform technology for the fracture repair market. The Company incurred a net loss of $6.6 million in the quarter. Hyaluronic Acid (HA) injection company, Anika Therapeutics, reported decline in OrthoVisc® sales for the quarter, sales was down by $604,000 year-over-year. But the Company is confident that sales will improve next quarter once DePuy Mitek (JNJ) starts to market this product.

Bracing companies, dj Orthopedics ("DJO"), Orthofix ("OFIX") and Ossur, all reported their 2Q:05 earnings the week. DJO's stock took a 10% dip after earnings call due to the Company lowering its 2005 guidance. OFIX continues to report positive results with strong spinal sales which increased by 24% over 2Q:04. Icelandic company, Ossur, reported 11% increased in top line growth and 20% increased bottom line.

Large Joints: Orthopedic giant, Zimmer Holdings ("ZMH") reported this week with total reconstruction division grew by 16% in 2Q:05 compared to 2Q:04; knee was up by 20%, hip 10%, extremity 17% and spine 22%. ZMH also revised its 2005 revenues outlook to be approximately $3,325 million due to strengthening of the US dollar against foreign currency. Previously, ZMH estimated sales to be in the range of $3,325 to $3,345 million for FY2005. Gainesville, Fla. orthopedic implant company, Exactech, reported 2Q:05 net income at $1.8 million, which is basically flat compare to 2Q:04. However, hip sales grew by 9% and knee grew by 11% for the quarter.

Spine: Kyphon ("KYPH"), an MIS Balloon Kyphoplasty company, reported another strong quarter with diluted EPS increased by 64% to $0.18 over 2Q:04. The company strong marketing network contributed another great quarter by training (to date) approximately 6,800 spine specialists worldwide to perform kyphoplasty. KYPH also posted its 2005 outlook for next quarter EPS to be between $0.21 and $0.23 in 3Q:05.

Other: Powered surgical instruments and video equipment for arthroscopic sports medicine, ConMed, reported total orthopedic surgery sales increased by 12% for 2Q:05 compared to 2Q:04. Arthroscopy grew by 14% while powered surgical instruments grew by 8% for the quarter. Medical imaging company, Hologic, reported osteoporosis assessment revenues increased by 9% for 3Q:05 compared to 3Q:04. The increase was primarily due to an increase in bone densitometry systems sold and an increase in service revenue.

Clinical: The Journal of Arthroscopic & Related Surgery published a study on ArthroCare's TOPAZ Coblation technology. Study proves that TOPAZ is effective when used in patients who suffers from common tendon disorders.

Distribution Agreement & Acquisition: Orthofix entered into a three-year agreement to offer its Gotfried PC.C.P (PerCutaneous Compression Plate) System to Novation. Icelandic bracing company, Ossur, announced the acquisition of Royce Medical for $216 million. Here's our analysis on this press release.

Legal: The long drawn-out battle between Medtronic and Cross Medical Products, Inc. (Biomet) regarding patent infringement still continues with the Federal Circuit Court of Appeals ruled in favor of Medtronic. Allograft company, CryoLife announced a class action lawsuit settlement (totaled $23.25 million) with its shareholders relating to the August 2002 tissue recall by the FDA.

Management and BOD Change: The most surprising news this week is the announcement of Michael Jeffries of Osteotech retiring. He has been with Osteotech for almost 16 years and have decided to retire his title as Executive Vice President and Chief Financial Officer. He is currently 62 years old. Biologics company, Osteologix, appointed Bobby W. Sandage, Jr., Ph.D. to the Company's board of directors. He is an executive vice president, R&D and chief scientific officer of Indevus Pharmaceuticals, Inc.

Regulatory Clearance: Biomet received FDA clearance to market The StageOne™ Disposable Spacer Molds for knee revisions surgery. LDR Spine received 510(k) clearance for its spinal fusion products: MC+® and ROI partial vertebral body replacement systems (PVBRs). LDR Spine was formed by a joint venture between LDR Medical (Troyes, France) and Path4 Ventures.

Miscellaneous: Recent studies have found that there is a relationship between osteoporic bone and fat. Fat seems to fill more in the bone cavity of patients who have osteoporosis than those who do not have bone disease. Here are some tips on how an individual can relieve pains and stresses associated with arthritis or osteoarthritis conditions.