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Letter to Shareholders<br />
Letter to Shareholders<br />
In <strong>2006</strong> <strong>Synthes</strong> reached important milestones in its history. We signed an agreement with the<br />
AO Foundation concerning the purchase of the <strong>Synthes</strong> brand name, trademark and intellectual property.<br />
In addition, we gained approval for the sale of a new artificial disc, Prodisc-L, in the United States.<br />
Dear shareholders, employees and friends of <strong>Synthes</strong><br />
Once again, <strong>2006</strong> was a very successful year for <strong>Synthes</strong> both operationally<br />
and strategically. We agreed to acquire a number of intellectual<br />
properties from the AO Foundation related to our business.<br />
This transaction resulted in the transfer of all patents, the <strong>Synthes</strong><br />
trademark and the brand name to our company, thereby enhancing<br />
our independence and the financial strength of the AO Foundation.<br />
The longstanding cooperation between <strong>Synthes</strong> and the AO Foundation<br />
will be intensified by a special agreement, which allows the AO<br />
to further expand its regional educational activities and programs for<br />
training surgeons and conducting basic research. <strong>Synthes</strong> will continue<br />
to submit all new products to the Technical Commission of the AO<br />
Foundation for quality assurance and approval.<br />
Another important milestone in <strong>2006</strong> was the FDA approval for <strong>Synthes</strong><br />
to sell Prodisc-L, a newly developed artificial disc, in the US market.<br />
This arthroplasty device is a revolutionary method for treating degenerative<br />
disc disease, and has found high acceptance with key<br />
experts in spinal surgery. Like all new technologies, Prodisc-L will require<br />
some time to penetrate a broader market. We will strive to gain<br />
support from a majority of surgeons and reimbursement parties by<br />
convincing them of the long-term benefit for the patient. We strongly<br />
believe that this treatment of the degenerative disc disease is the<br />
beginning of a basic change in the management of spinal disorders.<br />
Additional innovative developments include the recently launched<br />
Reamer-Irrigator-Aspirator (RIA), described in more detail on page 20,<br />
which will further enhance our position in intramedullary nailing, and<br />
the launch of the antibiotic coated Tibia Nail which will help to substantially<br />
reduce the risk of an expensive and painful infection in open<br />
tibia fractures.<br />
Outstanding operational results worldwide<br />
Sales grew by 15.1% and our operating profits amounted to US$ 763<br />
million, representing an increase of 15.2% versus 2005. We gained<br />
market share in all our businesses, with Trauma once again being the<br />
most important growth engine. Not only is it our largest division, it<br />
also generated the strongest growth rate. The continued success we<br />
experience with our constantly growing Locking Compression Plate<br />
(LCP) portfolio has received strong support from the four Expert Nails<br />
which are now fully known and used in all regional markets.<br />
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