Interim Management Statement

    RNS Number : 0220I
  Inion Oy
  13 November 2008
   


    



    Inion Oy
    ("Inion or the "Company")

    Interim Management Statement

    Tampere, Finland and Guildford, UK. 13 November 2008, Inion (LSE: IIN.L), a company focused on the development and commercialisation of
novel biodegradable medical implants, today issues its Interim Management Statement ("IMS") for the period 1 July 2008 to date.

    Chris Lee, CEO of Inion, said: "We continue to make solid progress during 2008 and our commercial operation in the focus segments of
spine and speciality orthopaedics is gaining real momentum. The approval in July of three key spine products in the US was a significant
milestone for the Company. These approvals have given us a unique biodegradable product offering for surgical graft containment procedures
covering the entire length of the spine. We are now aggressively promoting this range of innovative leading-edge products through our new
spine distribution network, and we are already seeing their sales build quickly in this important market. The significant progress that we
are delivering in our core areas has however recently been temporarily offset by slower deliveries in our non-core US CMF
(cranio-maxillofacial) business.

    "While the new growth trajectory being established for the streamlined Inion business is expected to enable the Company to become
profitable in the medium term, it is clear that further funding will be needed in the short term to achieve this goal. The Directors of the
Company continue to evaluate options that could provide the funding needed to bridge the period until Inion becomes profitable."

    Financial Summary

    *     Sales for the nine-month period ended 30 September 2008 were EUR3.7m, up 8% on 2007 (EUR3.4m)
    *     Revenues in the core business, i.e. spine and speciality orthopaedics, rose 29% in Q3 2008 compared to Q3 2007 (EUR619,000 vs
EUR479,000), and 16% for the nine-month period (EUR2.1m vs EUR1.8m). This growth has continued through October, particularly in the US.
Combined sales of spine and speciality orthopaedic products in the US for September and October now exceed combined sales of these products
during all of the preceding months in 2008.
    *     Third quarter sales of EUR1.1m are roughly equivalent to sales in the same period of 2007 but down 37% from the second quarter
2008 (EUR1.8m). The main reason for this sales performance in Q3 was the result of our main US distributor for CMF products reducing its
purchases in order to hold lower levels of inventory.
    *     Sales growth by the end of the year is expected to be approximately 15% to 20%, or in the region of EUR6 million against a
previous forecast of approximately EUR7 million. This reduction in our 2008 sales expectations is the result of the delayed registration of
our products in China, destocking by our US CMF distributor and a temporary loss of momentum in two European markets due to our decision to
change to better long-term distribution partners.
    *     Cash, cash equivalents and short-term investments totalled EUR7.77 million as at 30 June 2008 (EUR13.82 million at 31 December
2007)

    Operational Summary

    *     Three key products for Inion's spine offering received US FDA 510(k) marketing clearance in July 2008 allowing the Company to
accelerate commercial activities in the US spine market. US marketing clearances were received for:
    *     Inion S-1[TM] Anterior Cervical Fusion System
    *     Inion S-1[TM] Double-Level plate 
    *     Inion S-2[TM] Anterior Thoraco-Lumbar Fusion System 

    These systems consist of biodegradable plates and screws, which are designed for bone graft containment in spinal fusion procedures.
Such procedures are carried out as a treatment for a range of spinal conditions including ruptures and displacement of inter-vertebral
discs. Inion's spinal surgery products received European marketing clearance in 2007.

    As an indication of the potential opportunity for Inion in the spine market, a cervical plating procedure using an Inion system equates
to a sale of approximately EUR3,000, and in the US it is estimated that 187,000 such procedures take place each year. 

    *     Inion's commercial operation continues to develop and deliver increasing sales. In the US, 42 distributors are currently engaged,
with 22 focusing on the sales and distribution of speciality orthopaedics products and 20 focusing on spine product sales. US commercial
activity is focused on the launch of the recently approved spinal graft containment systems alongside the training and engagement of high
volume users in these areas. In the key markets within Europe and the Far East retraining the distributors' sales force continues, focusing
on the core business areas of spine and speciality orthopaedics
    *     Inion signed an out-licensing agreement in August with US firm Curative Biosciences Inc. covering novel bioactive technology for
promoting bone regrowth and repair when treating patients with broken bones. This represents a total deal value of approximately $2
million.
    *     In August, Inion elected Ian Paling as the Chairman of Inion, replacing G? Ando, who stepped down from the Board. Ian has more
than 25 years' senior management and Board-level experience, most recently as CEO of Corin Group PLC (LSE: CRG), a world leader in the
development, manufacture and distribution of a wide range of reconstructive orthopaedic devices.

    -ends-

    For further information, please contact:

    Inion Oy 
    Chris Lee, Chief Executive Officer
    Julien Cotta, Chief Financial Officer
    Tel: [phone]

    Citigate Dewe Rogerson
    Mark Swallow / Helena Galilee / David Dible    
    Tel: [phone]

    About Inion (www.inion.com)

    Inion Oy is a medical devices company focused on the development and successful commercialisation of innovative and unique biodegradable
and bioactive surgical implants in selected high value orthopaedic market segments. 

    Inion's core expertise and technology lies in the design and manufacture of innovative biodegradable plates, screws, pins and membranes,
which are used to enhance the healing of bone or soft tissue injuries to the skeleton, such as those caused by trauma or by reconstructive
surgery. Inion implants are made from its proprietary Inion family of biomaterials, with properties tailored for specific surgical
applications, in terms of strength, flexibility and rate of degradation

    Inion is also focused on developing proprietary new bioactive and biodegradable biomaterials that promote bone healing and accelerate
patient rehabilitation.

    Inion was incorporated in early 2000 and listed on the Official List of the UK Listing Authority in December 2004 (ticker: IIN). The
Company has offices in the UK and US, and its head office, R&D and production facilities are in Tampere, Finland.

    This announcement includes "forward-looking statements" which include all statements other than statements of historical facts,
including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating to the Group's products), and any statements preceded by, followed by
or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will",
"can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results,
performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by
such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group
will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ
materially from those in forward-looking statements include those relating to Inion's funding requirements, regulatory approvals, reliance
on third parties, intellectual property, key personnel and other factors. These forward-looking statements speak only as at the date of this
announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking
statements contained in this announcement to reflect any change in the Group's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based. As a result of these factors, prospective investors are cautioned not to
rely on any forward-looking statement.



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