© Proprietary & Confidential Dr. Eyal Bressler & Co. ORTHOPEDIC PATENTS: CURRENT TRENDS, INNOVATIONS AND FUTURE OPPORTUNITIES December 16 th, 2015 Dr. Joe Wyse, Partner, Head of Patent Dept. Dr. Ilan Riess, Medical Devices Tel: / /

© Proprietary & Confidential Dr. Eyal Bressler, PhD INTA, AIPPI, LLB(Biotechnol.)(Hebrew University)1, 3 Dr Joe Wyse, PhD INTA, AIPPI(Genetics)(London University)1 Dr Lior Itzhaki, PhD INTA, AIPPI(Chem.)(Bar Ilan University)1 Dr. Richard Schultz, PhD(Chem.)(Harvard, UC Berkeley)1, 2 Dr. Michael Meyklyar, PhD(Physics)(Khazan University, Weizmann Inst.)1 Dr. Keren Hagai, PhD(Mol.Bio.)(Tel Aviv University)1 Dr. Jeannette Fine, PhD(Physics.)(Washington University) Dr. Noa Ofer, PhD(Mol. Bio.)(Technion) Ms. Sigalit Avraham Bsc. LLB. LLM.(Chem, Law.)(Hebrew University) 1 Dr. Ilan Riess, PhD(Biotechnol.)(Turin University) Mr. Dean Mai Bsc., LLB.(Computers. Law)(IDC) Ms. Chantal Balla Bsc.,Msc.(Computer Science) (Technion) Dr. Michael Jaffe, PhD(Engineering)(Michigan) Dr. Limin Wang, PhD (Physics)(Penn. State, Peking ) 1 – IL Pat Att; 2 – US Pat Agent; 3- IL Att at law Dr. Neil Wilkof, LLB 3 Aviv Pollak, LLB3 Rachel Nissim, BA Idan Sides,LLB 3

© Proprietary & Confidential 1. Patents as a Monetizer 2. Global Orthopedic Devices Market, “Big Ortho” and IL Orthopedic Device Patent Trends 3. What is to be Done ?

© Proprietary & Confidential Patents as a Monetizer: Patents are used to 1. Create a monopoly for a limited time. 2. Extract licensing fees from the market. 3. Transfer Rights from the Inventor to a company. Note that most licensing business is done before the patent is granted. Patents are written for the investor/partner/competitor

© Proprietary & Confidential Global Orthopedic Device Market : 10 Predictions/Facts Transparency Market Research, DeLoitte,Decision Resources Group, Becker 1.The global orthopedic device market $41.2 billion by compound annual growth rate of 4.9 %. 2.Elderly population - osteoporosis, osteoarthritis, bone injuries, obesity: Growth : Middle East, China, India and other Asian countries. 3.Technology advancements — particularly bioabsorbable implants — coupled with the increased success rate of these implants and fixators in emerging markets. 4.The orthopedic knee devices are largest share of the total orthopedic device market revenue in But, product recalls may cause decline in United States and European markets over the next five years. 5.The global market for hip devices : compound annual growth rate of more than 5.9 percent through 2019 high rate of hip fractures and demand for hip replacement procedures. 6.The orthopedic consumables market -anchors and staples —$457 million by Anchors are 80 percent of the market share in 2019.

© Proprietary & Confidential Global Orthopedic Device Market : 10 Predictions/Facts Transparency Market Research, DeLoitte,Decision Resources Group, Becker 7.North America dominates the global orthopedic device market. Bioabsorbable implants, growing elderly population and increasing obesity in the United States will contribute to North America's leadership in the market. 8.US healthcare spending growth 4.4 percent, Healthcare reform will likely create more consolidation and pressure to control costs. Europe was the second largest regional market for orthopedic devices in Increasing demand for drug eluting stents and infusion pumps. Europe expected to have slow healthcare spending growth. 9.Asia-Pacific market will be the fastest growing region in the world for orthopedic devices. Middle Eastern countries 10 percent,China 14% India 17% Spinal implants and bone growth substitutes, the Asia Pacific market is expected to reach $7 billion by 2022, according to a Decision Resources Group report. 10.The major players in the global hip and knee orthopedic devices market are DePuy Synthes, Zimmer and Stryker. Medtronic, DePuy, Stryker and NuVasive dominate the overall spine device market. There have been huge financial transactions among these companies recently consolidation is expected to continue in the short term. The biggest transactions from 2014 include Zimmer's $13.4 billion merger with Biomet and Medtronic's $42.9 billion acquisition of Covidien.

© Proprietary & Confidential 7 An Orthopedic Device, however good, will never help a patient until it’s a final product, deliverable to the market. THE HARD TRUTH Let’s quickly overview “Big Ortho” : Top 10 companies, so that we can understand who IL inventors and companies should target their innovations towards. This is called “Patent Driven Competitive Market Analysis” It tells us what to invent and to whom to sell, and how to monetize.

© Proprietary & Confidential 8 Johnson & Johnson 2013 worldwide orthopedics sales: $8.9 billion 2020 projected worldwide orthopedics sales: $11.3 billion 2020 market share projection: 27.7 percent 72 patents/ 4 in IL

© Proprietary & Confidential 9 Stryker 2013 worldwide orthopedics sales: $5.2 billion 2020 projected worldwide orthopedics sales: $7.4 billion 2020 market share projection: 16.2 percent 132 patents

© Proprietary & Confidential 10 Zimmer (excluding revenues from pending Biomet merger) 2013 worldwide orthopedics sales: $4.3 billion 2020 projected worldwide orthopedics sales: $5.6 billion 2020 market share projection: 12.2 percent 281 patents

© Proprietary & Confidential 11 Biomet 2013 worldwide orthopedics sales: $2.9 billion 2020 projected worldwide orthopedics sales: $3.9 billion 2020 market share projection: 8.6 percent 37 patents / 2 in IL

© Proprietary & Confidential 12 Medtronic 2013 worldwide orthopedics sales: $3 billion 2020 projected worldwide orthopedics sales: $3.2 billion 2020 market share projection: 7 percent 101 patents / 4 in IL

© Proprietary & Confidential 13 Arthrex 2013 worldwide orthopedics sales: $1.5 billion 2020 projected worldwide orthopedics sales: $2.9 billion 2020 market share projection: 6.3 percent 50 patents

© Proprietary & Confidential 14 Smith & Nephew 2013 worldwide orthopedics sales: $2 billion 2020 projected worldwide orthopedics sales: $2.5 billion 2020 market share projection: 5.6 percent 156 patents

© Proprietary & Confidential 15 NuVasive 2013 worldwide orthopedics sales: $646 million 2020 projected worldwide orthopedics sales: $1 billion 2020 market share projection: 2.2 percent 42 patents

© Proprietary & Confidential 16 Globus Medical 2013 worldwide orthopedics sales: $434 million 2020 projected worldwide orthopedics sales: $778 million 2020 market share projection: 1.7 percent 56 patents

© Proprietary & Confidential 17 Wright Medical Group 2013 worldwide orthopedics sales: $474 million 2020 projected worldwide orthopedics sales: $600 million 2020 market share projection: 1.3 percent 57 patents

© Proprietary & Confidential 18 Patents with IL Owners : Trends

© Proprietary & Confidential 19 Orthopedic patents : IL owners Patents 64

© Proprietary & Confidential 20 Observation : Few IL patents are owned by “Big Ortho” IL is not extracting the licensing fees available. IL companies, hospitals, TTO’s Universities, and inventors are not reaching their investment potential. Solution : Study the patents of “Big Ortho” top 10 THEN strategize IL R&D and patent portfolios. For IL companies, “Big Ortho” is the end user, not the patient. Through “Big Ortho” you will you get to the patient and the licensing fees and the investment.

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