1. Andy Passey September 23rd 2003 Advanced Wound Management in Europe: Market Overview and Critical Success Factors © 2003 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

2. Report Contents 01: Scope of the Study 02: Market Overview 03: Competitive Analysis 04 Critical Success Factors 05: Conclusions and Your Questions

3. Scope of the Study Advanced Products: Moist Wound Dressings (hydrocolloids, foams, alginates, hydrogels) Silver Dressings Biomaterial Dressings & Skin Substitutes. Does not include traditional bandages / dressings, compression therapy, wound closure products, pharmaceutical antiseptic products, vacuum assisted closure Europe: Germany, France, Italy, UK, Spain, Benelux, Scandinavia The products are used for hard-to-heal wounds, both chronic and acute - not OTC consumer wound care products 65% of European sales are into the community and 35% into hospitals

4. Market Overview “The advanced wound management market is currently undergoing an exciting period of growth, driven by new product innovation, an ageing population and a recognition by the medical community of the need to adopt new methods.” MARKET DRIVERS Ageing population Increased end user awareness New product innovation Cost pressures Increased focus on infection control Lifestyle changes increase wounds MARKET RESTRAINTS High cost of new technologies Lack of regulation for tissue engineering Development of substitute products Increased need to provide evidence High number of competitors threatens prices Better wound prevention Growth Rate (2002) - 14.1%

5. Market Size (Total European Market) Shift from traditional to advanced dressings Growth of foams segment Introduction of new combination and silver products Gradual growth in the biomaterial / active segments

6. High Low Medium Penetration of Advanced Wound Management Products

7. Competitive Analysis There are currently five players leading this market: Smith & Nephew ConvaTec Johnson & Johnson Coloplast Mölnlycke Healthcare However, there are many more companies with products in this market and with an interest in the broad area of wound management These range from biotech firms such as Integra Lifesciences and FAB, through to traditional wound care players, companies with competing technologies (e.g. KCI) and even bed manufacturers. This creates many challenges in terms of market entry, new product launch, acquisitions, R&D, differentiation strategies, etc.

8. Critical Success Factors and Strategies Manage the Regulatory & Reimbursement Process Understand the Customer and the Level of Market Readiness Develop a Strong Wound Management Brand and a Sales & Marketing Presence Lobby regulatory authorities Build relationships with key opinion leaders Evidence-based healthcare strategy Conduct end-user research Market potential analysis Build a strong sales force Invest in sales training Develop a differentiation / branding strategy Critical Success FactorsStrategies

9. Critical Success Factors and Strategies (ctd.) Demonstrate the Cost-Benefit / Value for Money Argument Develop a Broad Portfolio of Complementary Products Gain Control of the Technologies of the Future Conduct clinical trials Provide economic evidence Conduct research with key institutions Portfolio management Segmentation analysis Product positioning analysis Research & development strategy Acquisitions & mergers Strategic alliances and partnerships Critical Success FactorsStrategies

10. Take Home Comments The European advanced wound management market is currently experiencing strong growth. However, different EU countries are at different stages of market development. Within the moist wound dressings market, there has been a significant shift in favour of foam products. New products are being introduced that are improving patient outcomes. New segments of the market, such as silver dressings, biomaterial dressings and skin substitutes are growing significantly. Regulatory approval issues and the high cost of new treatments are holding back market development and create challenges for the market players. Increased focus on evidence-based healthcare creates a challenge for the market players in terms of demonstrating clinical efficacy and cost effectiveness. The competitive situation is very dynamic, with five companies leading the market and many more companies aiming to improve their position or enter the market.

11. This research will help you... To benchmark performance and gain insight into key market measurements by country and by segment. To prioritise investment opportunities across geographical and product segments, and make effective decisions on market entry and exit. To understand the strategies of the market players and the key success factors in the market. To identify acquisition, merger and partnership opportunities. To understand and overcome the barriers to future market expansion.

12. Thank you. Any questions? Call us: +44 (0)20 7343 8383 Email: enquiries@frost.com Visit the web: www.frost.com