Bioactive Bone Substitutes

Company presentation

Ilkka Kangasniemi, CEO

Spring 2020

Company | BBS

www.bbs-artebone.fi 2

• Bioactive Bone Substitutes Oyj

• Founded in 2003, 12 employees

• Listed in Nasdaq First North 2018, Helsinki and Stockholm

• R&D phase turning into marketing and sales phase

• Regulatory process ongoing

• Medicinal substance production certificate

• Factory for production of protein extract and medical device end product

• Reindeer bone protein extract combined with a bioceramic bone filler

• For filling of bone defects in extremities, pelvis and scapula

• Production capacity for 25.000 cases per year

• Off the shelve product, ready to use in a syringe

• Cost effective, safe and efficient

Product | ARTEBONE®

UPDATE ON THE COMPANY’S

KEY DEVELOPMENTS

• Major owner has quaranteed cash liquidity until September 2020

• BBS’ share price took a significant turn upward after the release of clinical trial results

(19.2.2020).

• An animal trial was performed due to Notified Body clarification demand, trial started 5/2019.

• Interim results are delivered in spring 2020, final results in end of June 2020.

• BBS is ready to submit its CE marking application. Notified Body has agreed to process it

starting end of May 2020.

• CE marking approval is expected early 2021.

• FDA presubmission process ongoing. We expect to be able to submit a 510(k) application as a

medical device.

• Clinical trial report published 19.2.2020 with excellent outcomes.

• Patents accepted in Canada 10/2019 and USA 4/2020. worldwide IPR covers product and

processes. US split process application still pending final approval notification.

• Partnering discussions ongoing with Zimmer Biomet and Lifenet Health.

8 others have expressed high interest level in discussions.

1

2

3

FINANCIAL

SITUATION

REGULATORY

APPROVAL

PROCESS

KEY

ACHIEVEMENTS

CLEAR CLINICAL NEED IS IDENTIFIED FOR BBS’ PRODUCTS

Bone defects in severe cases

lack natural ability to heal

Treatment helps the healing process to

reach its natural ability

Need to provide a biological tool for the

surgeon to boost the healing

Tumors, Cysts, Trauma, Joint fusions, Osteochondral

defects, Osteoporotic fractures, Elderly people and

Diabetics

In treatment of bone healing problems related with

Currently used solutions

Synthetic growth factors

Overgrowth complications. High cost.

Sales falling.

Animal, Cadaver, Ceramics

and Synthetic derived

Not high enough bone healing capacity,

safety issues.

ARTEBONEⓇ IS THE FIRST EFFICIENT AND SAFE, OFF THE SHELVE SOLUTION

Golden standard: AUTOGRAFT,

bone harvested from the patient

Requires second bone harvesting operation,

cost, complications

WOUND | 10 cm accross

COLLECTED BONE | 5 cm accross

AUTOGRAFT | Golden standard

Current golden standard autograft requires bone

harvesting from patient’s own bone.

Thus, there is a higher risk of complications which

include pain, infection and delayed healing.

BBS’ ARTEBONE® IS THE ONLY PRODUCT THAT HAS

BOTH NECESSARY COMPONENTS FOR BONE GROWTH

The combination of safety, efficacy

and cost factors position

BBS’ ARTEBONE® next to Autograft

OSTEOINDUCTION

Reindeer bone proteins and growth factors

OSTEOCONDUCTION

Synthetic tricalcium phosphate scaffold

ARTEBONE® composition

ARTEBONE®’S EFFECTIVENESS AND SAFETY

CLINICALLY PROVEN

• Ankle and hindfoot fusion Chosen as it is the most challenging area for bone healing

• 34 patients

• 1 year follow up

KEY FINDINGS Fusion rate with ARTEBONEⓇ was comparable with the fusion rates with autograft

CLINICAL TRIAL

EFFECTIVENESS

SAFETY KEY FINDINGS ARTEBONEⓇ was proven to be safe The complications were comparable to: Ankle and hindfoot fusion and ceramic products

Autograft

35.6%

Source: Market research future (2017) Bone Graft Substitute Market Research Report-

Global Forecast till 2027; MSC analysis based on Wanget al (2017) Bioactive Materials 2(4): 224-247

Demineralized bone matrix

(DBM) and Allograft

32.5%

Synthetics

20.1%

Recombinant growth

factors (RGF)

12%

Ost

eoin

ducti

ve

Osteoconductive

RGF

Synthetics

DBM/Allograft

BONE GRAFT

SUBSTITUTE

MARKET

Autograft:

Gold standard

BBS

ARTEBONE®

BBS’S VIEW OF ARTEBONE®’S POSITIONING

IN THE BONE SUBSTITUTE SEGMENT

Other

3.1%

DIVISION OF PROCEDURES

ARTEBONEⓇ PRODUCTS’ POSITIONING IN THE MARKET

Procedures per year

GLOBAL BONE CRAFTS AND SUBSTITUTES

MARKET OVER $2.9 BILLION, CAGR 4.3%

Source: Bone Grafting (2019) Orthobullets, Jahangir A. et al (2008) AAOS, MSC analysis,

GlobalData (2014) Bone grafts and substitutes – Global analysis and Market Forecasts

US

1 million

US

$1.9 billion

in 2019

GROWTH DRIVERS

• Ageing population

• Young surgeons adopting

new technologies

• Preference for minimally invasive

procedures

ARTEBONE® DRIVERS

• Slowing sales of BMP’s

• Potential to convert Autograft users

• Potential to outperform

conventional materials

• Potential to combine to other

conventional implants

Not including autograft

procedures

EU5

440 thousand

EU

$560 million

in 2019 Not including

autograft procedures

Sales per year

THE WORLDWIDE MARKET OPPORTUNITY FOR THE ARTEBONE® PRODUCT

Source: Orthoworld (2019) Orthopaedic Industry Reaches

$49 Billion in 2017, MSC analysis, AAOS (2008) Bone-graft

substitutes in orthopaedic surgery; GlobalData (2014) Bone

Grafts and Substitutes - Global Analysis and Market Forecasts

MARKET OPPORTUNITY

Worldwide US EU5

Number of bone

graft surgeries 2 200 000 1 000 000 440 000

ARTEBONE

Cost per dose* $1,300 – 2,500 $1,300 – 2,500 $1,300 – 2,500

Market

penetration 5-10% 5-10% 5-10%

Market

opportunity for

ARTEBONE® $121 – 242 million $55 – 110 million $24 – 48 million

*ARTEBONE® is priced

between $1,300 – 2,500

per dose.

EU5: US, UK, Germany,

France, Spain and Italy.

Note: The annual sales figure of

these companies include more

than one product portfolio or

products that correspond to the

bone substitute orthobiologic

market.

SALES OF TOP 10 COMPANIES WITH ORTHOBIOLOGIC PRODUCTS IN 2018

161

168

209

233

266

375

386

393

405

538

Heraeus

LifeNet Health

Bioventus

Stryker

Seikagaku

MTF Biologics

Sanofi

DePuy Synthes

Arthrex

Medtronic

$ million

ARTEBONEⓇ WILL COMPETE EFFECTIVELY ACROSS ALL MARKET SEGMENTS

Competing segments Performance Safety

risks

Availability of raw

material Cost per dose

Autograft High Mediu

m

Possible for most

patients High

Recombinant growth

factors High High High $3,500 - 5,500

Machined and bank

bone allograft Medium

Mediu

m Limited on donors $300 - 600

DBM and Allograft Medium Low Limited on donors $600 - 900

Synthetics Medium Low High $900 – 1,300

BBS ARTEBONE® High Low High $1,300 –

2,500

ARTEBONE®

COMPETITIVE ADVANTAGE

• Broad array of indications

and implant combinations

• High optimal performance

• Favorable safety profile

• Cost-effective solution

• Production capability of up to

500 000 doses per year

• Patented

Source: MSC analysis from FDA access data

NEW GENERATION BONE SUBSTITUTES

CONSISTENCY

REDUCES OPERATING TIME, RISKS AND COSTS

SAFETY

COST EFFECTIVE PRICING

CLINICAL EVIDENCE OF OPTIMAL PERFORMANCE IN BONE HEALING

ARTEBONE® portfolio

In pipeline

ARTEBONE® EXTRACT

Opportunity

ARTEBONE® GEL

Chitin fixed

Opportunity

ARTEBONE® PUTTY/

CEMENT/SCREW/NAIL

Lead product ARTEBONE® PASTE

In pipeline ARTEBONE® BLOCK FOR SPINE CAGE

ARTEBONEⓇ PIPELINE

2020

Q1

Q2

Q3

Q4

2021

Q1

Q2

Q3

Q4

2022

Q1

Q2

Q3

Q4

2023

Q1

Q2

Q3

Q4

2024

Q1

Q2

Q3

Q4

TIMELINE PLAN OF ARTEBONE® PRODUCT PORTFOLIO

CE-marking

FDA approval

Market launch in EU

Marketing & Commercialization in EU, US and Asia

Product development

Testing in big animals

Product process

validation

CE-marking & FDA approv.

ARTEBONE® paste

Partnering for ARTEBONE® implant products portfolio

Partner agreement US

FDA safety study

Revenue report

Upscaling

= publishable milestones

ARTEBONE® gel

www.bbs-artebone.fi 14

• Start sales through selected major clinical centers

-Committed clinical study centers, Finland, Poland, Switzerland

-Selected major hospitals in largest European markets, Ger, Fr, UK, It, Sp

• Own distribution in close by markets

• Strong product support to distributors and reward system to salespeople

Own Marketing Partnerships

• Form partnership with major player in US, Japan, ROW

• OEM and/or ARTEBONEⓇ

Common Marketing

• Key Opinion Leader (KOL) -program in target markets

• Clinical post market follow up to gath- er further evidence of performance

• Scientific board to establish strong clinical direction

• Publications

MARKETING AND SALES STRATEGY

SUCCESS THROUGH EXCELLENCE AND SYNERGY

PROGRESS OF BALANCE SHEET (€) ASSETS 2019 2018 2017 EQUITY AND LIABILITIES 2019 2018 2017

NON-CURRENT ASSETS CAPITAL AND RESERVES

Intangible assets 80 80 80

Development expenditure 7 533 7 533 7 533 1 395 1 395 1 395

Other Intangible assets 359 433 507 11 638 11 338 7 837

Intangible assets total 7 892 7 966 8 040 Retained earnings (loss) -8 396 -8 776 -4 310

Tangible asset Profit (loss) of the period -1 638 380 -4 466

Real estate 84 84 14 CAPITAL AND RESERVES TOTAL 3 079 4 417 536

Buildings and structures 516 554 596

Machinery and equipment 685 774 853 CREDITORS

Tangible assets total 1 284 1 412 1 533 Long term

NON-CURRENT ASSETS TOTAL 9 176 9 378 9 573 Capital loans 176 176 950

Loans from credit institutes 5 191 5 633 6 723

CURRENT ASSETS Long term loans total 5 367 5 809 7 673

Debtors Short term

Short term 141 93 60 Loans from credit institutes 961 522 898

Cash and equivalents 516 1 685 35 Trade creditors 32 21 124

CURRENT ASSETS TOTAL 657 1 778 95 Other creditors 27 13 101

Accrual and referre income 366 374 337

Short term creditors total 1 386 930 1 460

CREDITORS TOTAL 6 754 6 740 9 133

ASSETS TOTAL 9 833 11 156 9 669 EQUITY AND CREDITORS TOTAL 9 833 11 156 9 669

Equity

Share premium account

Invested unrestricted equity fund

BOARD MEMBERS

THE TEAM HIGHLY EXPERIENCED AND KNOWLEDGEABLE IN ORTHOPEDICS, BIOMATERIALS, MEDTECH, BUSINESS DEVELOPMENT AND MANUFACTURING

CORE MANAGEMENT TEAM

JARMO HALONEN,

M.Sc.

Board member

AUVO

KAIKKONEN,

MD, PhD

Board member

TOMI NUMMINEN,

M.Sc.

Board member

PEKKA JALOVAARA,

MD, PhD

Founder,

Advisor

Board member

MERJA HAIKOLA

M.Sc.

Director of Quality

KENNETH

SANDSTRÖM

M.Sc.

Director of R&D

MIKKO VIITANEN

M.Sc.

Director of

Quality Control

HANNA TÖLLI

PhD

Director of

manufactur.

ILKKA KANGASNIEMI

Ass. Prof

CEO, Board member

HANNU

SÄYNÄJÄKANGAS

MSc

CFO, Board member

HEADQUARTER

Kiviharjunlenkki 6 90220 Oulu Finland

PRODUCTION SITE

Teollisuustie 4 85900 Reisjärvi Finland

CONTACT

+358 207 924 700 info@bbs-artebone.fi www.bbs-artebone.fi