1. 16000644-01 Importance of Fracture Reduction and Anatomy Restoration in Patients with Vertebral Compression Fractures

2. 16000644-01 2 Common Beliefs and Practices 1.“No one has shown that vertebral deformity causes problems.” 2.“I manage patients non-operatively for one to three months because the pain might go away. I am performing balloon kyphoplasty to address pain.” 3.“There is no evidence that kyphoplasty restores height.” 4.“Sometimes I can restore height with balloon kyphoplasty, but it is not reliable.” 5.“Vertebroplasty restores height.” 6.“I perform balloon kyphoplasty because it is safer than vertebroplasty. I do not care about fracture reduction.” 7.“I do not perform balloon kyphoplasty on a fracture older than three months because you cannot restore height in old fractures.” 8.“Balloon kyphoplasty and vertebroplasty are pain operations. No one has shown any difference in the pain benefit, so why should I spend more money or time to perform balloon kyphoplasty?” 9.“Ballon kyphoplasty increases the rate of adjacent fractures more than vertebroplasty, because bone cement stiffens the vertebral body, while vertebroplasty is better because it preserves the bone and only fills the trabeculae.” 10.“No one has shown any benefit to balloon kyphoplasty.”

3. 16000644-01 3 Consequences are independent of acute fracture pain Impact of Deformity due to VCFs Spinal deformity correlates with: Impaired gait, poor balance (Gold 1996, Sinaki 2004) Disability, reduced quality of life (Leidig-Bruckner 1997) Reduced lung function (Leech 1990, Culham 1994, Schlaich 1998) Early satiety, gastric distress (Gold 1996) Future facture risk (Kado 2003) Excess mortality (Kado 1998, Kado 2004, Huang 2005)

4. 16000644-01 4 Kyphotic Deformity, Not Acute Back Pain, Accounts for Long-term Consequences

5. 16000644-01 5 Deformity Impairs Pulmonary Function Medically stable kyphotic patients with no acute back pain versus age- matched controls (n=30) Excluded patients with pre-existing pulmonary disease, previous spine surgery *All differences p<0.05 Culham - Spine 1994 NormalOsteoporosis% Diff T1-T12 kyphosis (º)34.958.3*67% Rib mobility (centimeters) Anterior expansion3.52.3*34% Lung volume (liters) Total lung capacity4.43.8*14% Vital capacity2.72.2*19% Inspiratory capacity2.21.6*27% Significant negative correlation between kyphosis angle and lung function measures

6. 16000644-01 6 Chronic Low Back Pain Osteoporosis (≥1 VCF) P value Patients (n)5134- % Vital Capacity10594<0.05 % Forced Expiratory Vol (1 sec)9285<0.05 Schlaich – Osteoporos Int 1998 Kyphotic deformity reduces pulmonary function compared to chronic low back pain patients matched for back pain Deformity Impairs Pulmonary Function Adjusted for age, sex and height at age 25 No acute back pain

7. 16000644-01 7 Lindsay – Osteoporos Int 2005 Prior Fracture Increases Future Fracture Risk Lindsay 2001 Lindsay 2001 analyzed VCF risk within one year in patients with 0, 1 or 2 or more prior VCFs. (JAMA 2001) Lindsay 2005 used the same patient cohort to analyze VCF risk within one year in patients with 0, 1, 2, 3, 4, 5, 6, 7, or 8 prior VCFs. (Osteoporos Int 2005)

8. 16000644-01 8 Black – J Bone Min Res 1999 Fracture Deformity and Risk Increasing fracture risk with increasing deformity

9. 16000644-01 9 Future VCF Risk Predicted by Biomechanics According to mechanical principles, kyphosis increases anterior stress, predicting increases in future fracture risk W = body’s center of gravity M = muscles and ligaments in the back  = vertebral body Figures from Yuan – J Spinal Disord Tech 2004

10. 16000644-01 10 Silverman – Arthr Rheum 2000 1,425 women on 2 doses of an osteoporosis drug or placebo, followed for 3 years Correlation between Number of VCFs and Progressive Decrease in QOL

11. 16000644-01 11 Van Schoor – Osteo Int 2005 The Profound Impact of Radiographically- Detected VCF on QOL (SF-12) Study of 334 people ≥ 65 y.o. assessed by radiographs and SF-12 Loss of quality of life in patients with radiographic vertebral fractures was comparable to that of patients with CHRONIC OBSTRUCTIVE PULMONARY DISORDER (COPD) OR CARDIAC DISEASE Patients with 3 or more VCFs had a loss of quality of life comparable to that of patients with STROKE OR CANCER

12. 16000644-01 12 Patients With Acute VCFs Do Not “Get Better” SF-36 Physical Function Scores unchanged at 2 years (Hallberg 2004) VCF patients treated with non-surgical management did not show improvement in pain and function compared to balloon kyphoplasty patients (Komp 2004, Grafe 2005) Worse SF-36 outcomes than hip fx patients at 2 and 5 years (Hallberg 2004, Hall 1999, Zethraeus 2002) Mortality greater than hip fx pts at 4-5 years (Cauley 2000, Johnell 2004) VCFs are NOT stable –Not always apparent on initial X-ray, collapse can take 18 months (Lyritis 1989, Heggeness 1993, Heggeness 1994, Komp 2004, Grafe 2005)

13. 16000644-01 13 The highest standard of non-surgical management does not prevent deformity, leading to: –Future fracture –Impaired health –Loss of physical function –Loss of QOL Reginster – Osteoporos Int 2002 Deformity alone leads to serious health consequences

14. 16000644-01 14 Orthopaedic Principles of Fracture Management Anatomy restoration Rigid fixation Minimal tissue disruption Safe and early mobilization Conservative management does not fulfill Orthopaedic principles of fracture management Helfet – J Bone Joint Surg Am 2003

15. 16000644-01 15 Patient Outcomes After Balloon Kyphoplasty: Literature Summary Number or Rate Studies35 Prospective19 (54%) Concurrently Controlled (with NSM)2 (5.7%) Retrospective14 (40%) Balloon Kyphoplasty Patients1,888 Osteoporosis1658 (88%) Cancer203 (12%) Procedure-Related Complications, PMMA0.32% Procedure-Related Complications, All1.06 % Data on file at Kyphon. Studies reported in analysis provided at end of presentation. Analysis current as of 04/2006

16. 16000644-01 16 Balloon Kyphoplasty Studies Consistently Show Positive Outcomes Outcome Osteo only Cancer only BothTotal Pain (NRS or Descriptive)183728/28 Ambulation / Activities of Daily Living6039/9 Oswestry or Roland Morris Disability Indices4138/8 Karnofsky Score1001/1 SF-36 QOL Medical Outcomes Survey1124/4 Vertebral Height Restoration114722/23 Angular Deformity Correction (Kyphosis)102416/16 Data on file at Kyphon. Studies reported in analysis referenced at end of presentation. Analysis current as of 04/2006

17. 16000644-01 17 Komp – J Miner Stoffwechs 2004 Prospective concurrently controlled study N=19 KP, 17 NSM; mean fracture age 1 month VAS Pain Scores Oswestry Back Disability Index Balloon Kyphoplasty Improved Pain and Function Compared to NSM in Pts with ACUTE Fxs

18. 16000644-01 18 Prospective concurrently controlled study N=60 KP, 30 NSM; all fractures at least one year old Balloon Kyphoplasty Improved Pain and Function Compared to NSM in Pts with CHRONIC Fxs Similar results reported at one-year follow-up (Grafe – Osteoporos Int 2005) * statistically significant difference BK-NSM (p = 0.007) ** Scale: 0 = severe pain; 100 = no pain (Kasperk - J Bone Miner Res 2005) * statistically significant difference BK-NSM (p = 0.03)

19. 16000644-01 19 Crandall – Spine J 2004, Gaitanis – Eur Spine J 2005, Ledlie – Spine 2006 Anatomy Restoration with Balloon Kyphoplasty: Recent Height Restoration Results Paper % of Estimated Pre-Fracture Height % Reducible Pre-opPost-op2 yrs Crandall-acute Crandall-chronic 58% 56% 86% 79% N/R 92% 80% Gaitanis-midline Gaitanis-anterior 71% 73% 87% N/R 92% Ledlie-midline Ledlie-anterior 61% 87% 81% 88% 81% 90% N/R N/R = Not Reported

20. 16000644-01 20 Anatomy Restoration With Balloon Kyphoplasty: Recent Angular Deformity Correction Results Paper Local Angulation (°)Last Follow-up Reducible (%) Pre (°)Post (°) Corrected (%) Follow-up (°) Follow-up (%) Gaitanis16°8°53% N/R 90% Crandall-acute Crandall-chronic 15° 8° 10° 47% 34% N/R Open surgery14°4°72%10°29% N/R Crandall – Spine J 2004; Gaitanis – Eur Spine J 2005; Ledlie – Spine 2006 Open surgery, 11 papers with modern pedicles screws published 1990-2003 (References provided at end of presentation) N/R = Not Reported

21. 16000644-01 21 Anatomy Restoration With Balloon Kyphoplasty: Comparison to Postural Reduction Postural reduction through patient positioning provides some improvement Balloon kyphoplasty doubled improvement, and final height achieved after balloon kyphoplasty was maintained. Voggenreiter – Spine 2006

22. 16000644-01 22 Anatomy Restoration with Balloon Kyphoplasty: Correction of Vertebral Morphology * Definitions according to Genant – J Bone Miner Res 1993: Vertebral Fracture Assessment Using a Semiquantitative Technique VBs abnormalities predict future fracture risk (Ismail – Osteoporos Int 2003) Using osteoporosis literature definitions*, nearly 50% of VBs were normalized by KP (Ledlie – Spine 2006)

23. 16000644-01 23 Adjacent Fractures and Bone Cement Theory –Bone cement stiffness alters load transfer in the spine –This leads to adjacent fractures Facts –Not true on mechanical principles –Not shown in biomechanical studies –Not demonstrated in clinical studies

24. 16000644-01 24 Functional Spine Unit (FSU) VB Disc VB Bone is MORE STIFF ~100 MPa Disc is LESS STIFF < 3 MPa Bone is MORE STIFF ~100 MPa The Functional Spine Unit is Mechanically Equivalent to Three Springs in a Series The Functional Spine Unit is Mechanically Equivalent to Three Springs in a Series Biomechanics of the Spine

25. 16000644-01 25 The Response of the FSU to a Load is Driven by its Least Stiff Component, the Disc The Response of the FSU to a Load is Driven by its Least Stiff Component, the Disc Functional Spine Unit (FSU) VB Disc VB Load transfer is primarily through the disc Biomechanics of the Spine

26. 16000644-01 26 VB Disc VB Stiffening the Stiffer Component Does Not Alter Load Transfer Functional Spine Unit (FSU) with STIFF BIOMATERIAL PMMA = Vertebral augmentation helps restore normal mechanics to a fractured VB PMMA Biomechanics of the Spine

27. 16000644-01 27 Fusion Does Alter Load Transfer because the Least Stiff Component (the disc) has been stiffened Fusion Does Alter Load Transfer because the Least Stiff Component (the disc) has been stiffened  FUSED Functional Spine Unit (FSU) VB PMMA Biomechanics of the Spine

28. 16000644-01 28 Biomechanics: Stiffness Table 3 from Kyphon’s White Paper – Feb 2006 Bone cement does not increase VB stiffness beyond prefracture state

29. 16000644-01 29 Rates vary by study, not by method Cannot compare rates in these studies due to: –Different fracture definitions –Different time spans –Influence of confounding factors: age, sex, BMD, prior fracture, and bone-affecting drugs (steroids) Subsequent fracture rates cannot be interpreted unless the study population “controls” for all important risk factors Subsequent VCF Rates after using PMMA Table 2 from Kyphon’s White Paper – Feb 2006 m

30. 16000644-01 30 Natural History of Subsequent VCFs 58% of patients had adjacent fractures (Silverman 2001) Likely explanations for adjacent fractures –Biomechanics: Stresses highest at apex of curve –Forces on index VB likely to damage nearby VBs –Adjacent fracture underway but overlooked Silverman – Arthrit & Rheum 2001

31. 16000644-01 31 Balloon Kyphoplasty Reduced the Subsequent VCF Rate in Prospective Concurrently Controlled Studies The only two prospective concurrently controlled balloon kyphoplasty vs. non- surgical mgmt studies show significant decrease in new fractures after balloon kyphoplasty % Pts With Subsequent Fracture ** * 18% 38% *p < 0.05**p < 0.02 Grafe Komp 1 yr 6 mo Komp – J Miner Stoffwechs 2004; Grafe – Osteoporos Int 2005

32. 16000644-01 32 Collection of Level 1 Evidence from Clinical Studies in Progress FREE (300 patient enrollment complete) –Objective: Level I evidence that osteoporosis patients significantly benefit from balloon kyphoplasty compared to non-surgical management CAFE (enrollment ongoing) –Objective: Level I evidence that cancer patients significantly benefit from balloon kyphoplasty compared to non-surgical management KAVIAR (study in development) –Objective: Level I evidence that correcting spinal deformity results in balloon kyphoplasty superiority over vertebroplasty

33. 16000644-01 33 Meanwhile, the Clinical Literature Reports that Deformity Correction is Important Deformity Debilitation Disability Depression Death

34. 16000644-01 34 Although the complication rate with Balloon Kyphoplasty has been demonstrated to be low, as with most surgical procedures, there are risks associated with Balloon Kyphoplasty, including serious complications. For complete information regarding indications for use, warnings, precautions, adverse events and methods of use, please reference the devices’ Instructions for Use.

35. 16000644-01 35 References Slide 3 Gold – Bone. 1996;18(3 suppl):185S-189S Sinaki et al. – Osteoporos Int. 2005;16(8):1004-10 Leidig-Bruckner et al. – J Bone Miner Res. 1997;12:663-675 Leech et al. – Am Rev Respir Dis. 1990;141:68-71 Culham et al. – Spine. 1994;19:1250-1255 Schlaich et al. – Osteoporos Int. 1998;8:261-267 Kado et al. – Osteoporos Int. 2003 Jul;14(7):589-94 Kado et al. – Arch Inter Med. 1999;159:1215-1220 Kado et al. – J Am Geriatr Soc. 2004;52(10):1662- 1667 Huang et al. – J Bone Miner Res. 200621(3):419-423 Slide 5 Culham et al. – Spine. 1994;19:1250-1255 Slide 6 Schlaich et al. – Osteoporos Int. 1998;8:261-267 Slide 7 Lindsay et al. – Osteoporos Int. 2005;16:306-312 Slide 8 Black et al. – J Bone Miner Res. 1999;14:821-828 Slide 9 Yuan et al. – J Spinal Disord Tech. 2004;17:236-242 Slide 10 Silverman et al. – Arthritis Rheum. 2001 Nov;44(11):2611-9 Slide 11 van Schoor et al. – Osteoporos Int. 2005;16(7):749-756 Slide 12 Hallberg et al. – Osteoporos Int. 2004;15:834-841 Hall et al. – Osteoporos Int. 1999;9:508-515 Zethraeus et al. – SSE/EFI Working Paper Series in Economics and Finance, No 512, October 2002 Cauley et al. – Osteoporos Int. 2000;11:556-561 Johnell et al. – Osteoporos Int. 2004;15:175-179 Lyritis et al. – Clin Rheumatol. 1989;8(Suppl 2):66-69 Heggeness et al. – Osteoporos Int. 1993;3(4):215-221 Heggeness MH & Mathis KB – Chapter 57: An Orthopedic Perspective of Osteoporosis. In Osteoporosis. Academic Press, Inc. 1996 Komp et al. – J Miner Stoffwech. 2004;(11(Suppl 1):13-15 Grafe et al. – Osteoporos Int. 2005;16:2005-2012 Slide 13 Reginster et al. – Osteoporos Int. 2000;11:83-91 Slide 14 Helfet et al. – J Bone Joint Surg Am. 2003;85-A(6):1156-1160

36. 16000644-01 36 References (cont.) Slides 15 and 16 1.Kasperk et al. – J Bone Miner Res. 2005;20(4):604-12 2.Komp et al. – J Miner Stoffwechs. 2004;11 (Suppl 1):13-5 3.Berlemann et al. Eur Spine J. 2004;13(6):496-501 4.Coumans et al. – J Neurosurg. 2003;99(1):44-50 5.Crandall et al. – Spine J. 2004;4(4):418-24 6.Gaitanis et al. – Eur Spine J. 2005;14(3):250-260 7.Garfin et al. – Spine. 2006;In press 8.Gerszten et al. – Neurosurg Focus. 2005;18(3):e8 9.Grohs et al. – J Spinal Disord Tech. 2005;18(3):238-42 10.Hillmeier et al. – Orthopade. 2004;33(1):31-9 11.Lane et al. – In: North American Spine Society; 2004; Chicago, IL; 2004 12.Lieberman et al. – Spine. 2001;26(14):1631-8 13.Lieberman et al. – Clin Orthop Relat Res. 2003(415 Suppl):S176-86 14.Phillips et al. – Spine. 2002;27(19):2173-8; discussion 8-9 15.Phillips et al. – Spine. 2003;28(19):2260-5; discussion 5-7 16.Villavicencio et al. – Neurosurg Focus. 2005;18(3):e3 17.Voggenreiter et al. – Med Review. 2004;1:7-8 18.Voggenreiter – Spine. 2005;30(24):2806-12 19.Wilhelm et al. – Rofo. 2003;175(12):1690-6 20.Atalay et al. – Surg Neurol. 2005;64 Suppl 2:S72-6 21.Boszczyk et al. – Eur Spine J. 2005;14(10):992-9 22.Choe et al. – AJR Am J Roentgenol. 2004;183(4):1097- 102 23.de Falco et al. – J Neurosurg Sci. 2005;49(4):147-53 24.Feltes et al. – Neurosurg Focus. 2005;18(3):e5 25.Fourney et al. – J Neurosurg. 2003;98(1):21-30 26.Fribourg et al. – Spine. 2004;29(20):2270-6 27.Garfin et al. – Spine. 2001;26(14):1511-5 28.Heini et al. – Eur Spine J. 2004;13(3):184-92 29.Lane et al. – Orthop Clin North Am. 2002;33(2):431-8, viii 30.Ledlie et al. – Spine. 2006;31(1):57-64 31.Majd et al. – Spine J. 2005;5(3):244-55 32.Masala et al. – In Vivo. 2004;18(2):149-53 33.Masala et al. – Radiol Med (Torino). 2005;110(1-2):97- 105 34.Rhyne et al. – J OrthopTrauma. 2004;18(5):294-9 35.Theodorou et al. – J Clin Imag. 2002;26:1-5

37. 16000644-01 37 References (cont.) Slide 17 Komp et al. – J Miner Stoffwech. 2004;(11(Suppl 1):13- 15 Slide 18 Kasperk et al. – J Bone Miner Res. 2005;20:604-612 Slides 19 Crandall et al. – Spine J. 2004 Jul-Aug;4(4):418-24 Gaitanis et al. – Eur Spine J. 2005;14(3):250-260 Ledlie – Spine. 2006;31:57-64 Slide 20 Crandall et al. – Spine J. 2004 Jul-Aug;4(4):418-24 Gaitanis et al. – Spine J. 2005;5:45-54 Ledlie – Spine. 2006;31:57-64 Open Surgery papers (12): 1)Akahn et al. – Eur Spine J. 1994;3:102 2)Alanay et al. – Spine. 2001;26:213-7 3)Bernucci et al. – Surg Neurol. 1994;42:23 4)Knop et al. – Spine. 2001;26:88-99 5)Leferink et al. – Eur Spine J. 2001;10:517 6)Lindsey et al. – Spine. 1991;16:S140 Slide 20 (cont.) 7)Oner et al. – Spine. 2002 Mar 15;27(6):629-36. 8)Liu et al. – Zhonghua Yi Xue Za Zhi (Taipei). 1991;62:619-25 9)Muller et al. – Eur Spine J. 1999;8(4):284-9 10)Shen et al. – Spine. 2001;26:1038 11)Speth et al. – Acta Orthop Scand. 1995;66:406-10 12)Wood et al. – J Bone Joint Surg Am. 2003;85-A:773-81. Erratum in: J BoneJoint Surg Am. (2004) 86-A:1283 Slide 21 Voggenreiter et al. – Spine. 2005;30:2806-2812 Slide 22 Genant et al. – J Bone Miner Res. 1993 Sep;8(9):1137-48 Ismail et al. – Osteoporos Int. 1999;9:206-213 Slide 30 Silverman et al. – Arthritis Rheum. 2001 Nov;44(11):2611-9 Slide 31 Komp et al. – J Miner Stoffwech. 2004;(11(Suppl 1):13-15 Grafe et al. - Osteoporos Int. 2005;16:2005-2012.