1. P rovided b y S olco B iomedical I l K im 1

2. 1. Korean Orthopaedic Market Overview 2. Opportunities & Risks in South Korean Orthopedic Market 3. Regulatory Process in South Korea 2

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4. 4 Japan $ 29,208 Ref.: Korea Health Industry Development Inst. (KHIDI) U.K $ 8,477 France $ 8,890 Korea $ 3,902 World Medical Device Market Share 2010 Market Growth Rate World Market : $ 258,951 Million Korean Market :14 th largest & 1.4% Growth Rate: World Market : 9.06% Korea Market : 15.4%

5. 5 20062007200820092010 Avg. Growth (‘06~’10) % Manufacture1,949,159 (14.4) 2,216,965 (13.7) 2,525,203 (13.9) 2,764,261 (9.5) 2,964,445 (7.2) 11.1 Export781,043 (9.1) 959,094 (22.8) 1,248,138 (30.1) 1,519,039 (21.7) 1,681,619 (10.7) 21.1 Import1,719,323 (11.2) 2,001,423 (16.4) 2,340,883 (17.0) 2,398,833 (2.5) 2,619,895 (9.2) 11.1 Market Size2,887,438 (13.9) 3,259,294 (12.9) 3,617,947 (11.0) 3,644,054 (0.7) 3,902,720 (7.1) 7.8 Rate of Dependence on Import 59.561.464.765.867.1 Unit: Thousand USD Ref.: Korea Health Industry Development Inst. (KHIDI)

6. 6 200920102011Growth Rate Spine 732,000754,000779,0003.06 % Trauma/ Fixation 400,000424,000449,0005.61 % Joint 1,355,0001,500,0001,694,00010.56 % Unit: Thousand USD Ref.: Joint: KFDA Statistical Year Book Spine: Idata Research Inc Trauma: Korea Health Industry Development Inst. (KHIDI) ▶ K orean Orthopaedic Market Size Overview Per Division

7. Ref.: Korea Health Industry Development Inst. (KHIDI) RankProduct Name Year 2009 Year 2010 Growth Rate Total Amount in 2010 % from Total 3Medical Probe50,17868,03335.6%1,454,3614.68% 14Pedicle Fusion System 12,48623,99692.2%1,454,3611.65% Unit: Thousand USD ▶ E xport List ▶ I mport List RankProduct NameYear 2009 Year 2010 Growth Rate Total Amount in 2010 % from Total 4Knee System66,93471,7207.1%2,265,8363.17% 14Pedicle Fusion System 27,76131,24112.5%2,265,8361.38% Unit: Thousand USD 7

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9. 9 Ref.: National Statistical Office of Korea 2010 Component Ratio of Age over 65 Population Unit: Thousand A) One of the fastest growing Ageing Society

10. Year Reached# of Yrs Takes to Reach 7%14%20%7-14%14-20% France18641979201811539 U.K1929197520284653 U.S.A1942201420327218 Japan1970199420052411 Korea200020182026188 Ref.: National Statistical Office of Korea 2010 Ageing Society Year Reached Table 10 A) One of the fastest growing Ageing Society

11. DivisionTotal% Total # of Physician 61,846 Orthopaedic Surgery 4,6037.44% Neuro Surgery 2,1073.41% 11 Number of Specialist Products in South Korea Market Spine Product MIS Artificial Disc Dynamic Rod System Stand-Alone Fusion System Shape Memory Sytem Ref.: KFDA 2011 Statistical Yearbook American Medical Association Total Number of Physicians in USA: 954,224 OS in USA: 25,462 (2.7%) NS in USA: 8,968 (0.94%) B) Surgeons desire for new technique and unique products

12. YearTotalGrowth Rate 2009 $ 4,682,831 2010 $ 4,856, 0963.57% 12 Govt. Subsidies of Health Insurance Unit: Thousand USD ▶ 97% of Total Population are eligible for Health Benefit Ref.: KFDA 2011 Statistical Yearbook C ) Superior Government Insurance Coverage

13. Opportunities when Importing to South Korea 13 Fast growing Ageing Society Desire for New & Unique Products Excellent Insurance Coverage

14. TypePrice in 2010Price in 2011 Spine Pedicle System $ 1,684$ 1,142 (-32.0%) Joint Knee System $ 2,612$ 2,512 (-4.0%) Trauma Nail System $800$768 (-4.0%) Unit: USD 14 A) Government Manage and Control Product Price Medical Product Reimbursement Price

15. Severe Competition among Associative Companies Registered in South Korea 15 B) Abundance of Competitors

16. 1) Qualification for Korean Device Importers 2) Class Divide into I, II, III, IV 3) Technical Review 4) KFDA Approval (Approx 150 days) 5) Type Test (Reimburse VS. Non-Reimbursed. Approx 3-5months) 6) Marketing Approval 16 C ) Complex KFDA Regulatory Process South Korea KFDA Regulatory Process

17. Risks when Importing to Korea 17 Controlled Product Cost Competitive Market Complex Regulatory Process

18. Ref.: Idata Research Inc 40% 18 High Quality/ Economic Price Spine

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20. 1) Classify Medical Device Class 2) Identify Predicate Devices 3) Determine if any documents apply 4) Prepare and submit the application 5) Review for 90 days 6) Register product on the FDA website 1) Classify Medical Device Class 2) Mechanical Testing 3) Determine if any documents apply 4) Approval of KFDA within 80 days 5) Register your medical device for sale 6) Decision from the HIRA regards reimbursement 20 FDA 501K Procedure KFDA Procedure

21. Reimbursed ProductNon-Reimbursed Product Pedicle Screw System1 level: $1,187 Motion Preservation Product (Artificial Disc) $2,500 PEEK Cage$353Catheter$600 Dynamic Rod $95 (was $3,500 in 2011) Bone Substitute $400 Unit: USD 21 Reimbursed Product VS. Non-Reimbursed Product Ex. Spine Product

22. * Maintain Higher Market Growth Rate than that of World’s * Fast Growing Ageing Society * Early Adaptation of the Trend * Excellent Insurance Coverage * Gov’t Insurance Coverage Control * Excellent Quality product available with Economic Price * Reimbursement Product VS. Non-Reimbursed Product System 22

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24. Initial dossier arrive Preparing Technical Document Submission of TD to KFDA TD reviewed by KFDA Issue a certificate of importing testing sample by KFDA Submission of Test report to KFDA Requesting Additional information Request testing sample Importing testing sample Testing in Local Lab Issue the test report Product Approval Request supplemental documents Sending notice to customer KFDA Registration Process ① ② Preparing required additional documents and submit to KFDA Reviewed by KFDA Exhibit 1 24