Business Overview 2007 - Synthes

Our Values & Principles
Annual Report 2007

Our Values & Principles
Annual Report 2007

Preface
Our Values & Principles
This year’s Annual Report focuses upon our Values & Principles.
They capture the inherent culture of Synthes and have been,
are, and will be at the core of our activities as a company and
as individuals. Guided by these Values & Principles, we make
every effort to deliver on our mission of improving patient care.
Patient Driven
Surgeon Focus
Striving every day to
improve patient care
Listening to surgeons
and helping them
achieve the best possible
patient outcomes
Innovation
Quality
Constantly developing
breakthrough products,
services, and better
ways of doing business
Maintaining the highest
standard of excellence
in all that we deliver to
internal and external
customers
Education
Partnership
Integrity
Continually educating
and developing
our customers and
employees
Leveraging the insights
of surgeons, the AO,
strategic partners and
our global network
of Synthes employees
Acting ethically and
respectfully at all times

Synthes. Annual Report 2007

Content
Company Profile 3
Significant Facts 6
Letter to Shareholders 8
Business Report
Management Discussion 13
Regional Highlights 15
Corporate Citizenship
Innovation and Education 23
Employee Structure and Challenges 27
Ethical Business Conduct 29
Product Highlights
Trauma. LCP Volar Column Plate 32
Spine. In-Space 34
CMF. MatrixNEURO Cranial Plating System 36
Biomaterials. chronOS Strip 38
Power Tools. Colibri/Small Battery Drive 40
Corporate Governance
Group Structure and Shareholders 44
Capital Structure 45
Board of Directors 46
Group Management Committee 52
Compensation, Shareholdings and Loans 53
Shareholders’ Participation 55
Changes of Control and Defense Measures 57
Auditors 58
Information Policy 59
1

Company Profile
2

Synthes. Annual Report 2007
Company Profile
Synthes, headquartered in West Chester, PA (USA), is a leading global medical device company, employing over
9,000 people whose mission is to improve patient care around the world. In 2007, we generated revenues of
US$ 2.8 billion and net earnings of US$ 612.6 million. Over the last 10 years (1997–2007) Synthes has increased
its revenues from US$ 364.3 million to US$ 2.8 billion, representing a CAGR of 22.4%, including the acquisition
of Stratec Medical in 1999 and Mathys in 2004.
Through its five business units (Trauma, Spine, Cranio-Maxillofacial,
Biomaterials and Power Tools), Synthes develops, produces and markets
instruments, implants and biomaterials for the surgical fixation,
correction and regeneration of the human skeleton and its soft tissues.
We operate in product markets with high growth, driven by the
aging population and improvements in technology that allow treating
more patients with better implants.
Synthes establishes the foundations for its excellent market position
by continuously developing better solutions. Our goal is to provide
the safest and most advanced implants, instruments and technologies
that ensure reliable operating procedures, rapid recovery and a
pain-free life after surgery. We guarantee high quality, constant innovation
and total concentration on the needs of our customers.
Synthes is the world leader in traumatology, ranks among the top
three companies for spinal devices and is at the forefront of the cranio-maxillofacial
business. We are an innovative pioneer in the field
of biomaterials such as resorbable implants and bone graft substitutes,
and have become a leader in non-fusion technologies with our
lumbar and cervical disc replacements.
Global Functional Structure
North America
Asia Pacific
Europe
Latin America,
Middle East and Africa
Traumatology
Spine
Cranio-Maxillofacial (CMF)
Biomaterials
Power Tools
Production
Production
Global services: Finance, Human Resources, Information Technology, Legal, Purchasing, Quality, Regulatory Affairs
3

Company Profile
Our Strategy
For many years we have been following our three-pillar-strategy,
which is closely related to our Values & Principles:
Innovation
Synthes has a constant inflow of new and innovative
products that serve a clinical need
for improved patient care.
Sales Force
The expansion of the number of sales people
and services Synthes offers by providing its
sales force with best-in-class training that
they bring into operating rooms around the
globe.
Education
Various activities and educational programs
provided by Synthes or by partnering organizations
to foster the best treatment for patients.
Business Units
Trauma
As the global market leader in Trauma,
Synthes offers plates and screws, intramedullary
nails and external fixators to fix and
stabilize all types of fractures of almost all
bones with the ultimate goal of restoring
normal anatomy and physiology.
Spine
Synthes is one of the top companies in
Spine. The primary market is the surgical
management of back pain treatment
which includes fusion procedures with
cages, plates and pedicle screw-systems,
but also non-fusion treatments such as
interspinous spacers, vertebroplasty and
disc arthroplasty.
CMF
Synthes has a worldwide leading position
in CMF (Cranio-Maxillofacial). Within this
market, Synthes offers very low-profile implants
to treat fractures of the skull and
mandible. The portfolio includes products
to reconstruct mandibular misalignments
and deformities caused by accidents.
Biomaterials
The Synthes Biomaterials Division develops solutions that complement
Trauma, Spine and CMF divisions with three particular
areas of focus. Firstly the reduction of implant related infections,
such as drug-coated implants. Secondly, increase the stability of
implants in the bone (such as cements) and thirdly, bone graft
substitutes to promote bony fusion. The products are sold through
the sales forces in Trauma, Spine and CMF.
Power Tools
Synthes Power Tools are centrally developed and – like Biomaterials
– used and sold in conjunction with the Trauma, Spine and
CMF divisions. Synthes has over 30 years of experience in designing
and manufacturing surgical power tools and offers a comprehensive
range of air- and battery driven drill systems, reamers
and saws to meet high demands in orthopaedics, traumatology
and neurosurgery.
4

Synthes. Annual Report 2007
Recent Highlights
December 2007
The US FDA (Food and Drug Administration) fully approves the Pro-
Disc ® -C Total Disc Replacement (a) for commercial sale and distribution
in the United States. Synthes is the first company to offer both
a lumbar as well as a cervical artificial disc replacement on the US
market. Thereby Synthes strengthens its market position in the segment
of spinal motion preservation. Artificial disc replacements constitute
a modern way of treating degenerative disc disease and will
benefit from a shift in treatment paradigm.
a
December 2007
With the acquisition of N Spine, Synthes enters the posterior spinal
dynamic stabilization market to treat degenerative disc disease as well
as stenosis. The N Spine rod will be used in conjunction with Synthes'
leading pedicle screw product lines Pangea (b) and Click'X (c). The
benefits are its low profile, which offers a minimal-invasive approach
and ease-of-use.
b
October 2007
In Biomaterials, chronOS Strip (d) is cleared for sale by the FDA. This
is the first flexible ceramic bone substitute Synthes has in its portfolio.
The easy-to-use new product offers surgeons increased handling
options and leverages two areas of expertise for Synthes: osteoconductive
ceramics and resorbable biocompatible polymers.
c
April 2007
Michel Orsinger is appointed CEO. Prior to joining Synthes in 2004
as COO, Mr. Orsinger spent 10 years with Novartis in various executive
management positions, most recently as the CEO and President
of OTC Worldwide. He has a track record of leadership positions and
has been instrumental in transforming Synthes into a leading global
company.
d
Financial Highlights 2007 vs. 2006
2007 2006
Net Sales US$ 2,759.7 million US$ 2,391.6 million
Gross Profit Margin 81.0% 81.9%
Operating Profit Margin 32.8% 31.9%
Net Earnings Margin 22.2% 21.3%
Free Cashflow US$ 602.0 million US$ 343.6 million
Employees at year-end 9,070 8,451
SWX Swiss Exchange / VirtX
Symbol: SYST.VX
Market Capitalization at year-end 2007: CHF 16,689 m
5

Company Profile
Significant Facts
Sales per region 2007 (US$ millions)
North America
Europe
Asia Pacific
Rest of world
1,721.0
637.3
248.4
153.0
Asia Pacific 9.0%
Rest of World 5.5%
Europe 23.1% North America 62.4%
Operating Expenses (US$ millions)
Selling and Promotion
% of Net Sales
General and Administrative
% of Net Sales
Research and Development *
% of Net Sales
2003 2004 2005 2006 2007
331.7 491.7 592.6 704.6 802.3
27.0% 27.6% 28.5% 29.5% 29.1%
113.5 191.2 247.8 266.4 294.6
9.2% 10.7% 11.9% 11.1% 10.7%
281.2 109.5 114.8 125.6 148.6
22.9% 6.2% 5.5% 5.3% 5.4%
* 2003 includes US$ 215.0 million IPR&D write-off due to
acquisition of Spine Solutions, Inc. in April 2003.
US$ millions
900
800
700
600
500
400
300
200
100
0
2003 2004 2005 2006 2007
Selling and
Promotion
General and
Administrative
Research and
Development
Profitability (US$ millions)
Net Sales
Gross Profit Margin
Operating Profit Margin
Net Earnings Margin
2003 2004 2005 2006 2007
1,229.0 1,779.3 2,078.2 2,391.6 2,759.7
81.1% 78.2% 82.5% 81.9% 81.0%
18.6% 28.4% 31.9% 31.9% 32.8%
6.1% 18.2% 21.0% 21.3% 22.2%
US$ millions
3,000
2,500
2,000
1,500
1,000
500
0
2003 2004 2005 2006 2007
Net
Sales
Gross
Profit
Operating
Profit
Net
Earnings
6

Synthes. Annual Report 2007
FCF and Capital Expenditure (US$ millions)
Free Cashflow
CapEx
2003 2004 2005 2006 2007
203.3 301.1 337.1 343.6 602.0
122.3 141.3 184.0 190.3 223.1
US$ millions
700
600
500
400
300
200
100
0
2003 2004 2005 2006 2007
Free
Cashflow
CapEx
Assets 2007 (US$ millions)
Current Assets
Property, Plant & Equipment
Intangible Assets
Goodwill
Other Assets
1,588.4
603.4
1,843.1
1,051.3
101.8
Goodwill 20.3%
Other Assets 2.0%
Current Assets 30.6%
Intangible Assets 35.5%
Property, Plant &
Equipment 11.6%
Liabilities and Equity 2007 (US$ millions)
Current Liabilities
608.7
Long-term Liabilities
493.3
Retained Earnings
1,834.7
Other Equity
2,251.3
Other Equity 43.4%
Current Liabilities 11.7%
Long-term Liabilities 9.5%
Retained Earnings 35.4%
Employees 2003 2004 2005 2006 2007
Total Employees (at year-end)
4,290 6,711 7,627 8,451 9,070
Change in Employees
13% 56% 14% 11% 7%
Sales Force as % of Total Employees
24% 25% 25% 25% 27%
10,000
8,000
6,000
4,000
2,000
0
2003 2004 2005 2006 2007
60%
50%
40%
30%
20%
10%
0%
Total
Employees
Sales
Force
Change in
Employees %
7

Letter to Shareholders
Letter to Shareholders
2007 was another successful year for Synthes. We enhanced our leading market position in both Trauma and
Cranio-Maxillofacial specialties. We also acquired N Spine to further strengthen our position in Spine. On an
organizational level, we created new global functions to increase productivity and to gain efficiency as a strategic
response to the changing market environment.
Dear shareholders, employees and friends of Synthes
We look back with satisfaction on a successful 2007. It is with great
pleasure that we report net sales of US$ 2.8 billion, representing an
increase of 15.4% versus 2006. All business units contributed to the
success of the 2007 results. The higher-than-market sales growth of
Trauma and CMF both represent a particularly satisfactory achievement
given the large worldwide market share Synthes has in these
segments.
Within our Trauma division, we expanded our global product portfolio
in 2007 with the introductions of the Volar Column Distal Radius
Plate System, the Expert Lateral Entry Femoral Recon Nail, the Japanese
Proximal Femoral Nail and further penetration of our LCP systems.
We also implemented several customer-focused programs that
have contributed to our successful year. The first of these programs
is the Synthes Resident Program, an online educational platform for
young surgeons in the field of Trauma. Synthes also established several
Geriatric Fracture Centers of Excellence in the US this past year
and will continue to expand the program in 2008 worldwide. The
Geriatric program aims to improve the treatment of elderly fracture
patients by developing innovative products for complex fractures,
educating the orthopedic community on the benefits of treating patients
using an interdisciplinary approach, and ultimately establishing
centers which utilize co-managed care and standardized protocols.
Notable activities within Spine in 2007 include the US Food and Drug
Administration’s approval for sale of ProDisc-C and our acquisition of
N Spine. With the approval of ProDisc-C, our product for cervical total
disc replacement, we became the only Spine Company to offer
both lumbar and cervical artificial disc replacement systems. In spite
of the slower than expected initial adoption of this revolutionary technology,
we are confident that artificial disc replacements will prevail
as the preferred treatment option. Our acquisition of N Spine has enhanced
our position within the dynamic stabilization segment of the
lumbar Spinal market by offering an innovative posterior system compatible
with our Click’X and Pangea pedicle screw product lines. We
also look forward to further developing spine technologies with the
addition of the N Spine team to the Synthes organization.
Our Cranio-Maxillofacial business outpaced the aggregate global
market through stronger than average growth in each region. Of particular
note was the performance of the neurosurgery segment,
driven by the new MatrixNEURO cranial plating system, and global
success with Patient Specific Implants. In 2007, the CMF business
group also expanded the content and frequency of specialized technical
educational activities in the Sternal/Chest Wall and Neurotrauma
fields, further establishing Synthes as a partner in patient care
worldwide.
8

Synthes. Annual Report 2007
Strategic initiatives
Synthes continues to make progress with our key global initiatives to
reduce the time-to-market of new product launches, to further optimize
the global supply chain, and to ensure a global product lifecycle
management tool to more efficiently develop and launch new products
across the globe. Our efforts with these key initiatives are critical
to positively position ourselves within the challenges of our everchanging
market environment of shorter product lifecycles and higher
regulatory hurdles for product approvals.
At Synthes, the highest professional and ethical standards are essential.
In 2007, the medical technology industry was subject to significant
governmental scrutiny with regards to the relationship between
companies and their surgeon customers and we continuously review
and reinforce our global compliance guidelines with our employees.
Resident Program in North America will be expanded to other divisions
and to Europe. In Spine, we will leverage the acquisition of N Spine,
but also launch important new additions to the product portfolio.
Finally, we will also utilize new technologies in CMF to expand
our offering to maxillofacial and cardiothoracic surgeons, ear-noseand-throat
and plastic surgeons and also neurosurgeons. These portfolios
will be enhanced with complimentary products from our Biomaterials
and Power Tools divisions.
Synthes’ success depends on the skills and commitment of our employees
whose ongoing contribution we deeply appreciate. In particular,
we want to thank you, our shareholders and our other stakeholders
for your continued support and confidence in Synthes.
In 2007, the executive management team was further enhanced with
the transition of Michel Orsinger to President and CEO, the addition
of a global Vice President of Operations and a global Vice President
of Human Resources.
Outlook
We have begun 2008 with high confidence for the continuing success
of our company in delivering on our mission of improving patient
care. The majority of our achievements in 2007 were driven by
our commitment to innovation, education and to the high service level
delivered by our own sales force. Going forward, we will maintain
our special focus on innovation with differentiated products and
growth in all regions where we see yet unrealized potential. We remain
optimistic about the future growth opportunities in all our fields
of activities. Furthermore, we expect our global initiatives to enhance
our efficiency and to help sustain our gross and operating margins.
Hansjörg Wyss
Chairman of the Board
Michel Orsinger
President and CEO
In Trauma, Synthes will further strengthen its market position by introducing
several new products. The successfully implemented Synthes
9

Business Report
10

Synthes. Annual Report 2006
Business Report
Management Discussion 13
Regional Highlights 15
11

Business Report. Management Discussion
Patient Driven
Striving every day to
improve patient care
12

Synthes. Annual Report 2007
Business Report. Management Discussion
Synthes once again posted double-digit sales growth of 15.4% in US-Dollars and 12.5% in local currencies.
This performance is a result of our best-in-class products, high service levels and a comprehensive array of educational
activities, which we conducted throughout the world.
North America continued to be the major growth engine for Synthes,
with Trauma as the main contributor to this achievement. Outside the
US, performance in Asia Pacific is particularly noteworthy, where in
2007 we achieved market leadership in the Japanese Trauma market.
China and India have become the fastest growing countries for sales
of Synthes products in the emerging Asia markets.
In spite of important investments in research and development spending
as a percentage of sales, we have been able to grow our operating
income by 17.0% in local currencies. Productivity improvement
programs contributed to a reduction in selling and promotion and
general and administrative expenses as a percentage of sales. In addition,
royalty payments to the AO Foundation declined.
In Europe, where competition and pressure on pricing and reimbursement
of our products has increased, we were able to grow our business
significantly with 13.4% local currency growth versus 2006. Latin
America continued with strong sales growth at approximately
19% in local currencies, with particularly strong growth in Spine.
A significant share of our aggregate sales growth (approximately
45%) is attributed to new products providing increased benefits and
products which cover needs previously unmet.
Gross profit margin in 2007 (absent inventory obsolescence expense)
represents a slight improvement over prior year. This is among the
highest in the industry. Our continuous progress in manufacturing efficiency
helped make this development possible despite our expansion
into countries with relatively lower market prices and our inventory
reduction program, which was evident in 2007.
Net earnings of US$ 612.6 million improved as a percentage of sales
to 22.2% for the year, representing 18.7% growth in local currencies.
Foreign exchange rate differences favorably impacted sales and
earnings by 2.9 and 1.7 percentage points, respectively, in 2007 and
2006. Earnings per share increased by 16.2% in local currencies to
US$ 5.16.
In 2007, we increased our staffing by 7.3% to 9,070 employees, with
the majority of new hires in our sales organization. Our global sales
force now consists of approximately 2,400 highly educated and trained
sales personnel.
13

Business Review. Regional Highlights
Surgeon Focus
Listening to surgeons
and helping them
achieve the best possible
patient outcomes
14

Synthes. Annual Report 2007
Business Report. Regional Highlights
In 2007, Synthes achieved considerable growth in all regions. Sales in North America rose to US$ 1.7 billion
(+ US$ 195.9 million) with Trauma and CMF performing particularly well and Spine contributing substantially.
In Europe, Synthes increased its sales by 13.4% (in local currencies) to US$ 637.3 million and achieved market
leadership in its three major divisions. Countries in Asia Pacific showed double-digit sales growth rates except
for Japan. In Latin America, sales increased by almost 19%.
North America
In North America we achieved US$ 1.7 billion or 62.4% of our 2007
consolidated net sales. Once again, this region was our biggest
growth contributor with a growth of 12.6% over the prior year in local
currencies. This was mostly due to our Trauma and CMF divisions
where we outgrew the market and gained share despite our marketleading
position.
In Trauma, the Volar Column Distal Radius Plate System and the Expert
Lateral Entry Femoral Recon Nail Systems were two notable systems
released in 2007. Regional performance was mainly fueled by further
penetration and portfolio expansion of our LCP (Locking Compression
Plate) systems, along with the performance from our Trochanteric
Fixation Nail (TFN) and our Retrograde/Antegrade Femoral Nail
(RAFN) intramedullary nailing systems.
Other important accomplishments within the Trauma division in 2007
included our successful implementation of the Synthes Resident Program
in the US. This program is both an online training center and a
series of workshops offered by our sales force directly to young trauma
surgeons who can benefit from education by the market leader
and earn credit points that can later be redeemed for textbooks. By
the end of 2007, more than 70% of all US Residents were already
enrolled in the Synthes Resident Program. This program will be extended
to Spine and CMF in the coming year.
Notable new product launches in our Spine division in 2007 include
Antegra, a new plating system used to stabilize degenerated lumbar
spine segments anteriorly, and Synapse, a comprehensive system of
instruments and implants designed for posterior stabilization of the
upper spine. The continued rollout of SynFix-LR contributed strongly
to our North American Spine growth this past year.
Our acquisition of the N Spine organization in December was a highlight
for our Spine division. N Spine’s unique and proprietary technology
will allow us to enter the dynamic stabilization market, one of
the fastest growing segments of non-fusion technology in Spine.
Since the launch of ProDisc-L in the fall of 2006, there have been
more than 1,000 surgeries in the US in 2007, which resulted in an
even lower complication rate than during the FDA study. This is a testament
to our training program, and a similar surgeon training strategy
will be applied to ProDisc-C which was approved for sale by the
FDA at the end of 2007. The major challenge has been and continues
to be the adequate reimbursement by insurance companies, but we
continue to focus on this area and have had success in 2007 with more
insurance companies covering the cost of treatment with ProDisc-L. It
is with confidence that we look into a promising 2008 for Spine.
In our CMF division, the MatrixNEURO system was a strong growth
driver this past year. This system was fully released in the US and will
be expanded to other indications in 2008. It complemented continued
growth with our Patient Specific Implants (PSI). CMF also grew
through increased clinical treatment with its sternal fixation and reconstruction
system.
Another highlight of 2007 was the continued expansion of the Synthes
Inventory Management Solution (SIMS). By the end of 2007, over
80% of our US volume is handled through SIMS, which is comprised
of a storage system as well as a computerized solution to make reorders
as easy as possible for the hospital.
In the US we have a very streamlined training concept in place for our
surgeons through our partnership with AO Foundation. We also complement
AO educational activities with specialized courses sponsored
by Synthes. A larger number of AO courses was offered in the
North America in 2007, e.g. the first AO cadaver course in CMF and
other more specialized courses. We will continue to expand on this
fruitful concept and our collaboration with the AO to remain the number
one provider of excellent education and scientific platforms.
Overall, we are dedicated to increasing our high-level of service to
customers by offering total customer solutions in all our activities, including
technical service, inventory management and training.
Europe
Despite an unusually warm winter with fewer fractures associated
with skiing and other accidents typical of snow and icy conditions,
we achieved 13.4% growth in local currencies in Europe. The mild
temperatures affected sales in the traditional winter sport countries
of Germany, Switzerland and Austria. The relatively slow start to the
year was made up for with above average sales performance after
the first quarter.
15

Business Review. Regional Highlights
2007 is the first year in which we achieved market leadership in all
three major divisions, Trauma, Spine and CMF. Continuous expansion
of the sales force and far reaching educational activities have been
one of the largest contributing factors to success in the past year. During
the latter half of 2007 we were able to further strengthen our
product portfolio with new product introductions. The high standard
of our sales force has increased our presence in the operating rooms
and also our ability to train OR staff on the use of our products to
help improve patient outcomes.
One of our goals has been to overcome the changing environments
in our major European markets. Price increases have only been possible
through new product introductions and holding prices of existing
products at previous levels has only been possible through the
strengthening of our value added services. The roll-out of the electronic
Synthes Inventory Management Solution (eSIMS) across the major
markets such as the United Kingdom and Germany has further
strengthened our presence at the hospital level. Further, the change
in the reimbursement system in France (TIPS) has given us the opportunity
to launch new products in the local Trauma market.
Once again, we have outperformed market growth in all divisions and
have gained market share throughout Europe. A strong performance
in the United Kingdom, good performance in the Eastern European
markets and the countries on the Mediterranean rim have made up
for the below average first quarter. The completion of the Expert Nail
product lines, the introduction of the LCP DHS and LCP DHS Blade
and the introduction of the EPOCA shoulder prosthesis have driven
growth in the Trauma division.
Our Spine sales have been strengthened through the successful introduction
of In-Space and Vertecem and the line additions to products
launched in 2006, such as Pangea. The introduction of a milling
system has vastly improved the surgical procedure for Prodisc-C.
In 2007, our CMF division achieved the highest growth percentage.
The introduction of the MatrixNEURO system was the main driver behind
this positive performance while the launch of the Sternal Closure
systems and the improvement in the supply chain of the Patient
Specific Implant (PSI) have also contributed to the strong CMF growth.
The region of Africa and the Middle East has also shown increased
sales and stability. Since the Middle East markets are strongly influenced
by tender activity, much of our sales in 2007 stem from tenders
won in 2006. With the tenders awarded in 2007 for delivery in
2008, it is clear that in this region we have gained significant market
share as well. A re-organization of our distribution arrangements in
large markets, such as Turkey and Greece, has been completed and
will contribute to strong growth in the coming years.
Going forward, we will continue our drive to expand our sales force
and increase our educational opportunities. It is important to support
this team with a strong middle management layer which our Human
Resources group is currently establishing as a high priority. New product
introductions will continue to support our growth in 2008. In
order to get closer to the needs of our surgeons and their patients,
we have established new Innovation Centers in Europe with the most
recent being the Innovation Center in Salzburg, Austria, opened in
October of 2007. Situated in the Hansjörg Wyss House of the Paracelsus
University, this Center is ideally located to offer surgeons the
platform to work closely with our engineers in order to bring new
products and new surgical solutions to the market.
Asia Pacific
We are pleased with our 2007 results in Asia Pacific. Although our
growth was stymied by ongoing price cuts in Japan which resulted in
a sales growth rate of 8.7% (in local currencies) for the full year, the
rest of the region showed a double-digit sales growth rate as well as
a double digit increase in volume.
Prices in Japan are completely controlled by the Ministry of Health,
Labor and Welfare (MHLW). The MHLW implemented two price cuts
in 2007 (January and April) that affected our Trauma result in Japan
quite significantly (10%–15%). Nevertheless our achievement in Japan
continues to be strong: the market share of Synthes was expanded
in all divisions and we are now the market leader in Trauma.
Exceptional growth was achieved in both China and India. The challenge
in these countries lies within the supply of service through the
education of our employees and our distributors, and also in our competition
with locally produced products.
16

Synthes. Annual Report 2007
Innovation
Constantly developing
breakthrough products,
services, and better
ways of doing business
17

Business Review. Regional Highlights
Quality
Maintaining the highest
standard of excellence
in all that we deliver to
internal and external
customers
18

Synthes. Annual Report 2007
A milestone for the region was the inauguration of the CMF business
in India. This was done in conjunction with an AO course and a Synthes
symposium on sub-condylar fractures at the International Congress
for Oral and Maxillofacial Surgery in Bangalore, where 800 surgeons
attended. These events gave our CMF division a real jump-start and
we are looking forward to adding people, service and products to
serve our CMF customers in India.
Latin America
Once again our result in Latin America was outstanding. In local currencies,
sales in this region grew by almost 19%. This result was primarily
due to our strong performance in Brazil and Colombia. There
is still great potential in Latin America because of the large population,
continued economic growth and the relative political stability of
the region as a whole.
Another highlight was our launch in the first half of 2007 of the PFNA
Japan (Proximal Femoral Nail Anti-rotational nail) which was a great
success. This is our first product which is specifically adapted for the
unique qualities of the Asian femoral anatomy; it is an intramedullary
nail used to treat proximal fractures of the femur.
The AO has created a dedicated group of surgeons to consider Asiaspecific
training and product needs. With the establishment of the
AO Asia Pacific Trauma Expert Group, we look forward to an expanded
offering of dedicated Asia-specific product lines with the addition
of tibia plates, distal radius plates and an orthognathic CMF system.
In order to more appropriately react to market needs, we have created
two additional sub-regions that are led by separate Synthes managers
(North-Asia and South-East Asia). This should allow us to train
the people in our sales force, along with our distributors’ employees
in an equally professional way. We will also improve our response time
by increasing the number of inventory holding offices, as well as accelerating
our rate of new product introduction. New offices with
better warehousing capabilities as well as training facilities have already
been opened in Singapore, India, Malaysia, China and Australia.
Our goal is clearly to expand our activities in this important region.
Apart from the launch of new products and more educational activities,
we will also focus on individual country-specific challenges. One
such challenge is to establish better reimbursement environments in
countries where this is not yet the case (such as India), and also to
provide adequate solutions for an ever increasing number of people
with osteoporosis in the emerging markets. This will be a major task
for us for the coming years.
Six countries in Latin America have Synthes sales organizations; nine
other countries are covered by distributorship agreements, and two
distributors service the Caribbean region.
The Spine business unit has shown the most growth as the result of
new product introductions combined with close cooperation with AO
Spine Latin America. Power Tools also showed exceptional growth
due to specialized training of the sales force and the support from a
dedicated regional repair facility based in Costa Rica.
Our results in some countries are influenced by our long-term strategy
of sustainable, ethical business operations. Synthes has a clear policy
that does not allow for kickbacks and other unprincipled business
practices and we will always operate according to these principles.
Apart from the increase in our sales force to keep up with the increased
demand, we now have an excellent training organization in place.
It allows for our own trainers to train other local trainers and make
sure that product and technical knowledge is distributed evenly
among our sales people and surgeons.
Our relationship with the AO Foundation continued to be very strong.
With their help almost 2,500 surgeons have been trained in over 50
courses in 2007. We are also complementing AO courses with Synthes-courses
that are more technology and new product oriented.
We expect this region to continue to grow at a substantially higher
rate than more mature markets. In addition, we expect to increase
market share as a result of the training programs mentioned above,
combined with other initiatives that improve the level of service and
overall efficiency of our Latin American operations.
19

Corporate Citizenship
20

Synthes. Annual Report 2007
Corporate Citizenship
Innovation and Education 23
Employee Structure and Challenges 27
Ethical Business Conduct 29
21

Corporate Citizenship. Innovation and Education
Education
Continually educating
and developing
our customers and
employees
22

Synthes. Annual Report 2007
Corporate Citizenship. Innovation and Education
Innovation and education have always been main pillars of Synthes' strategy and will always be so in the future.
Innovations by Synthes are always based on clinical problems. Our product development centers and
innovation task forces allow us to respond to the increasing demand for innovative solutions. Synthes’ ongoing
commitment to education permeates all aspects of our interaction with surgeons and OR personnel. In 2007,
several of our educational initiatives were launched or further developed.
In 2007, as in the past, clinical problems were the engine behind
Synthes' innovations. Perpetual innovation is reflected in an extensive
pipeline of ideas and in numerous new solutions for clinical problems.
Synthes is determined to proactively search for clinical challenges and
tries to solve them, in close cooperation with our clinical and scientific
partners.
Surgical treatment of musculoskeletal diseases
Over the last 50 years, the treatment of musculoskeletal disorders has
evolved and dramatically improved the clinical outcome and patients'
lives. Innovations by Synthes are always based on scientific findings,
clinical experience and patient needs. Therefore, our engineers and
project team members understand the clinical needs and are aware
of today’s limits in treating musculoskeletal disorders. To ensure the
involvement of the best leaders in all these disciplines, our engineers
and designers are part of one of the largest worldwide medical and
scientific networks.
The surgical treatment of musculoskeletal diseases is no longer a pioneering
effort, as it has evolved into a well accepted and proven treatment
therapy. This transition was only possible, with the use of standardized
treatment methods and high quality products which work
well in the hands of the majority of trained surgeons.
Today, the needs for innovative solutions have increased. The reason
for this growth, on one side, is the longer lifespan, patient expectation
and the specialization of the surgical professionals. On the other
side, new technologies in the field of materials, biomaterials, diagnostics
and visualization are very promising tools for improving the
surgical treatment.
Development teams located globally
In 2007, Synthes reacted to the increased need for innovation by substantially
extending our development resources, especially in the early
stages of emerging technologies and new treatment methods. To
understand the needs of our local surgical partners, the locations of
our development teams are spread globally. By doing so, we can keep
our focus and dedication as a competent and pro-active partner for
the medical community.
On the one hand, we have dedicated product development centers
for all our divisions, both in the US and in Europe. Engineers and business
people in these organizations make sure that the right innovations
reach the right surgeons at the right time.
On the other hand, to further maintain this awareness and to be even
closer to the real surgical environment, some of Synthes' project
teams are physically located at medical centers and at universities.
The resulting interdisciplinary collaboration is fast-paced and very
effective in developing innovative solutions for clinical problems yet
unsolved.
From Synthes’ history we have learned that innovations do not end
with the development of a product. Evaluating the clinical results and
proactively exchanging those results with our clinical network are necessary
to be able to validate new implants, instruments, or surgical
techniques. This process ensures that an innovation fulfills the high
standard of a Synthes product. For any new and innovative surgical
technique or product, extensive educational programs for surgeons
and OR personnel are key elements in these product releases.
Educational offers for surgeons and OR staff
Synthes has always placed a very strong emphasis on educating surgeons
and operating room personnel in a way that compliments the
well-known and highly respected tradition of AO education activities.
During its 50-year history, the AO has developed effective channels
for educating surgeons and OR personnel on AO goals, principles,
and techniques. The AO emphasis on education as a key pillar of its
success made it an early ingredient of the Synthes culture and has
now become a major reason for Synthes’ success and excellent
reputation.
Synthes’ ongoing commitment to education permeates all aspects of
our interaction with surgeons and OR personnel. The most common
form of education that Synthes offers can be found on a daily basis
in operating rooms worldwide as highly trained Synthes sales consultants
provide valuable technical expertise to the surgeons and OR
staff who use their products. Synthes also provides more refined and
more formalized education activities and events, as well as web-based
resources, fellowships, and other opportunities for surgeons to
observe and practice new technologies.
Synthes Resident Program to be expanded
Several of Synthes’ educational initiatives originated in the United
23

Corporate Citizenship. Innovation and Education
States, and they are now spreading to other areas of the world. An
example is the Synthes Resident Program (SRP), a comprehensive educational
program for surgical residents in the United States to enhance
the learning they receive at their teaching institutions.
Introduced in early 2007, the SRP features technique-specific courses
that allow orthopaedic residents the opportunity to practice and
review their fracture fixation skills. The main element of the program
is a web site that provides on-line courses and resources, including
interactive simulated surgical procedures. The local Synthes sales consultant
is actively involved in the SRP, conducting hands-on workshops
in the hospitals with the residents.
Residents who participate in the SRP earn “points” in recognition of
their participation in both the on-line and live learning activities. These
points are used toward the acquisition of medical textbooks that
are a valuable resource that they can use for their entire medical career.
The SRP has been quite well received, with 90% of American
orthopaedic residents utilizing the program. The SRP will be expanded
to Synthes Spine and Synthes CMF, as well as into the European
and Latin American markets in 2008.
focused on surgical access and less invasive surgical techniques featuring
Synthes Spine products.
Synthes CMF provides programs consistent with Synthes’ commitment
to education. Workshops and courses for neurosurgeons and
cardiothoracic surgeons were conducted in 2007 to educate surgeons
on new Synthes products and technologies which are not in the
standard AO product portfolio.
On-line course offerings for OR personnel
Education for operating room personnel (ORP) has been one of Synthes’
most well-known attributes, with thousands of nurses, technicians,
and other ORP being educated by local sales consultants and
at workshops and courses worldwide. In 2007, Synthes continued its
tradition of supporting this important part of the surgical team by enhancing
its on-line course offering. These courses enable ORP to learn
and practice fracture fixation techniques and to become familiar
with the instruments and implants using interactive simulation technology.
Participants earn continuing education credit for these online
courses without the need to travel or take time away from their
busy work schedules.
Training in new technologies
Another form of education offered by Synthes is the Advanced Technology
Symposia. These Symposia, focused on new technologies that
have not yet been included in the AO Education curriculum, are designed
to give participants hands-on experience with new Synthes
products. Surgeons who attend this 1-day course, which is conducted
locally in their area, are given the opportunity to be briefed on the
new technology by surgeon experts and to practice the new products
on plastic bones or cadaver specimens. Hundreds of these courses
were conducted world wide in 2007 for all Synthes specialties.
Consistent with the Advanced Technology Symposia in 2007 was the
focus on surgeon training for ProDisc-L. Spine surgeons were trained
in small forums allowing for highly individualized and interactive training.
These one-and-a-half day forums featured lecture presentations,
in-depth review of surgical cases (provided by the participants),
hands-on training on cadaver specimens, and observation of a live
ProDisc surgical procedure via interactive video. This intensive ProDisc
training was usually preceded by other Synthes surgeon courses that
Finally, Synthes participates in numerous professional society meetings
around the world, where we sponsor hands-on learning activities
for the meeting participants. Professional societies appreciate
Synthes’ unique commitment to education and they have learned to
expect Synthes to deliver the finest quality education for their members.
2007 was no exception to this trend, as Synthes provided education
at society meetings for all major surgeon and ORP specialties
that we serve.
Synthes’ commitment to education is without equal in the markets
we serve. In 2007, Synthes conducted over 1,600 courses worldwide,
with over 30,000 participants. This effort, combined with the
highly regarded courses offered by the AO, is a remarkable testimony
to the importance of education within the Synthes core values and
principles.
24

Synthes. Annual Report 2007
Activities 2007 (1,540)
Latin America 4%
Asia Pacific 5%
North America 13%
Europe 78%
Participants 2007 (34,219)
Asia Pacific 19%
Latin America 5% North America 6%
Europe 70%
25

Corporate Citizenship. Employee Structure and Challenges
Partnership
Leveraging the insights
of surgeons, the AO,
strategic partners and
our global network
of Synthes employees
26

Synthes. Annual Report 2007
Corporate Citizenship. Employee Structure and Challenges
On December 31, 2007 Synthes, Inc. employed more than 9,000 employees worldwide. With targeted programs,
Synthes has continued to expand its workforce to support its strategic priorities in the areas of Product
Development and Sales. Synthes is focused on attracting, retaining and developing the best talents in the industry
and on fostering the individual potential of all its employees through continuing education, job rotation,
job enrichment and empowerment.
During 2007 Synthes grew its global headcount by more than 7%.
As of December 31, 2007, Synthes employed 9,070 staff in about 40
countries around the world. Globally, the alignment to our strategy
of sales consultant expansion and the delivery of superior technical
support and service led to a 15% increase in our Field Sales organization.
The continuing focus on operational efficiencies such as the
introduction of Lean Manufacturing and Value Stream Mapping allowed
our global Operations group to support the volume resulting
from our sales growth with minimal additional headcount. Our ongoing
expansion in the strategic growth markets of the Asia Pacific
and Latin America regions resulted in double-digit growth in employees
in those locations.
Structure of Synthes’ global workforce in %
Other professionals 21%
Manufacturing/
Operations 43%
Product Development 9%
Sales 27%
In the prospect of further global expansion our aim is to offer attractive
opportunities for ambitious and highly skilled individuals who want
to realize their potential in the fields of applied science, engineering,
technical operations, manufacturing, sales and business management.
To maintain a leading position, we must continue to attract,
retain and develop the best talents in the industry. It is of utmost importance
that our talent pool reflects the diverse structure of our business
both now and for the future.
Our global New Employee Orientation program is designed for the
quick integration of new employees, providing them with an understanding
of the company’s heritage, global course, and the values
and principles we will maintain in reaching our goals. This ensures
that new employees quickly understand what contribution they make
to the development of our products and services.
Enhancing global understanding
To support the global development of Synthes, we have, and will continue,
to increase our investment in the number of employees active
in our international assignment program. As part of our ongoing efforts
to build and share knowledge, drive innovation and refine our
global business processes, the program supports employees on both
short and long-term assignments to Synthes operations around the
world. During 2007 the number of employees on assignment grew
by more than 25%.
At our many sites around the world, we actively strive to maintain an
exciting and modern working environment that makes internal
growth and development a priority. Our human resources policy is
centered around fostering the individual potential of employees
through continuing education and development programs to help
them reconcile career and private goals. Our ambitious efforts in these
areas make us an attractive employer worldwide.
As an organization, Synthes understands that our success is the result
of highly talented, motivated and trained individuals coming together
with a common purpose. We maintain our commitment to
their growth, well-being and success.
Attracting and retaining talents
It remains a priority at Synthes to attract young talent to the organization.
We are expanding our partnerships with some of the world’s
leading business schools to bring recent graduates to the company.
Through a structured MBA recruitment and development initiative,
individuals experience a 24-month rotational development program
that equips them with experience and insights across major disciplines
within the company.
27

Corporate Citizenship. Ethical Business Conduct
Integrity
Acting ethically and
respectfully at all times
28

Synthes. Annual Report 2007
Corporate Citizenship. Ethical Business Conduct
Ethical behavior is the cornerstone of how Synthes does business. Our Global Code of Business Conduct and
Ethics guides our, daily decisions and interactions that define how we treat and do business with our customers,
shareholders, suppliers, stakeholders, partners, and each other. The corresponding Compliance program
ensures that business practices and decisions are in line with our ethical values.
At Synthes we value the trust and respect of our patients, customers,
and of the medical community. We believe that our reputation is our
greatest asset; an important and integral part of our Synthes brand.
To maintain our reputation, we are dedicated to fairness, dignity and
respect, to open and honest relationships with our customers, affiliated
physicians and business partners, to the responsible and efficient
use of our assets. These are keys to our mission as a business, and
are central responsibilities for our employees.
A guide to Synthes’ global standards of ethics and
regulatory compliance
Striving to operate with the utmost integrity has long been integral
to our success. Our Global Code of Business Conduct and Ethics provides
us with a single, company-wide statement and with an ethical
and behavioral framework to guide our actions. Organized into six
broad principles, our Global Code guides our actions across all of our
activities. It elaborates on aspects such as the responsibility of the individual
employee and the relationship among our employees; the relationships
with our customers, vendors, suppliers and other contractors;
as well as with regulators, communities and competitors.
Whenever we encounter ethical issues, our employees are required
to take personal responsibility to respond in a manner that reflects
the shared values promoted by the Global Code of Business Conduct
and Ethics. Through their contracts with us, we require our distributors
and similarly-situated business partners to join us in these principles
as well.
From guidelines to action
To assure ethical or legal compliance and to support our Global Code,
we have developed our corporate compliance program, a system of
standards and procedures, education and training, communication
efforts, monitoring techniques, employee incentives and policy enforcement
designed to facilitate consistent, company-wide adherence
to our Global Code and other standards.
In order to obtain the legal benefits of good corporate citizenship,
we have also designed our corporate compliance program to satisfy
defined government and industry standards for effective compliance
programs around the world. These standards include the United
States Government’s Sentencing Commission Guidelines, applicable
provisions include the Swiss Code of Obligations, the Australian Standard
- 3806-1998 (Compliance Programs), the Organization for Economic
Cooperation and Development’s Guidelines for Multinational
Enterprises, and the International Organization for Standardization’s
standards for quality management systems. With all the above initiatives,
we feel that Synthes has reaffirmed and strengthened its commitment
to strong Ethical Business Conduct practices throughout the
organization.
To achieve its goals, our program is organized
around seven basic functions:
1. We have assigned oversight responsibility to our Chief Compliance
Officer, and have provided him with the authority, independence
and resources to implement an effective compliance function.
Our Chief Compliance Officer reports directly to the Chairman of
our Board of Directors and to the Audit Committee of our Board.
2. We have established and continue to develop compliance standards
and procedures that are designed to effectively prevent, detect
and address instances of ethical and legal non-compliance.
These standards include appropriate standards and procedures relevant
to each country in which we operate our business.
3. In conjunction with our Legal, Human Resources and Training Departments,
we design and regularly conduct employee training
programs.
4. We regularly encourage communication between our employees
and those persons who can best answer their questions or concerns.
5. We monitor the compliance of business operations, and audit specific
areas of potential compliance risk, to ensure adherence to
compliance-related standards and procedures.
6. We promote and enforce our standards and procedures through
providing employees with incentives to comply, and by applying
consistent and effective discipline when non-compliance occurs.
7. We review potential instances of non-compliance promptly and
appropriately, and responding appropriately. All investigations are
performed by or under the supervision of our Chief Compliance
Officer or our Legal Department.
29

Product Highlights
30

Synthes. Annual Report 2007
Product Highlights
Trauma. LCP Volar Column Plate 32
Spine. In-Space 34
CMF. MatrixNEURO Cranial Plating System 36
Biomaterials. chronOS Strip 38
Power Tools. Colibri/Small Battery Drive 40
31

Product Highlights. Trauma
Trauma. LCP Volar Column Plate
The Locking Compression Plate (LCP) Distal Radius System offers 28 individual locking compression plates to manage
every wrist injury pattern that requires surgical intervention. It consists of dorsal and volar plates for fractures
and osteotomies of the wrist, i.e. the distal radius. The LCP Volar Column Distal Radius Plate, a recent addition to
the successful product line, provides extra advantages which strengthen our leading position with this versatile product
line.
Today’s trauma surgeon is faced with an increasing number of complex
injuries. The situation is all the more challenging given that patients
have higher expectations of making a quick and complete recovery.
Further, an aging population means poor bone quality in many
cases and a steady increase in fracture incidences.
Fractures of the wrist, i.e. the distal radius, occur more frequently
than any other single fracture in humans. A fall on an outstretched
hand is the most common mechanism of injury and its incidence is
increasing as people grow older and stay active longer. While nondisplaced
fractures can still be treated conservatively, displaced fractures
usually require active intervention.
Locking plates as new standard
Historically, that intervention has included a combination of closedreduction
and casting, percutaneous pinning and casting, external fixation,
and non-locking plate and screw fixation. Treatment of the
more complex fracture patterns was usually managed with either external
fixation or non-locking plates and screws.
With the advent of locked plating, open reduction and internal fixation
with locking plates and screws were shown to have short-term
advantages over external fixation in these complex fractures. Postoperative
care was less complicated when using internal locking plates
and screws. These advantages have resulted in this treatment method
becoming the new standard of care for distal radius fractures.
Anatomically contoured volar distal radius plates
Synthes released the LCP Distal Radius System to the market in early
2004. The LCP Volar Column Distal Radius Plate was released in 2007
to compliment the existing product line. The product offering includes
a total of twelve new Volar Column plates that provide the surgeon
with many options to treat a wide variety of distal radius fracture
patterns.
Three Column Theory
Since Rikli and Regazzoni have shown the majority of the axial load
transmitted through the wrist is concentrated on the intermediate
column, the new Volar Column Distal Radius Plate was designed to
provide more distal buttressing capability and focus sufficient locking
screw options into the intermediate column. At the same time, additional
locking screw fixation options are also directed into the radial
styloid. The remainder of the locking screw holes are evenly distributed
across the distal radius to ensure that there are sufficient locking
screw options to address almost any fracture pattern.
The LCP combination holes in the shaft of the plate allow for either
compression or angular stability. Surgeons can decide intraoperatively
on the best strategy for treating the fracture. In the case of simple
fractures, the system permits compression with standard screws
when primary healing is desired. In more complex fractures with significant
bone defects or in patients with poor bone quality, locking
screws can be locked into the plate to provide stable fracture fixation
independent of bone quality. Locking Screws increase stability, minimize
the risk of the screws stripping in bone, and allow for secondary
healing. The increased stability permits immediate mobilization
and allows the patient to begin early rehabilitation.
With the addition of the LCP Volar Column Plate, Synthes’ LCP Distal
Radius System strengthens its position in the market as the most
comprehensive system for treating distal radius fractures. It helps surgeons
to substantially improve surgical outcomes for their patients.
In the near future, Synthes will introduce several new instruments and
an upgraded case assortment to compliment the Volar Column Plate
and minimize time spent in the operating room.
Each plate is designed and manufactured to provide an anatomical
fit on the volar aspect of the distal radius, which minimizes the need
for intra-operative plate contouring. The screw trajectories of the Volar
Column plates were developed to focus locking screw fixation options
where they are needed most.
32

Synthes. Annual Report 2007
Radial Column
Intermediate Column
Ulnar Column
Recent studies show that more axial load is transmitted
through the intermediate column of the distal radius.
Therefore, the Volar Column Distal Radius Plate was designed
to provide more buttressing capability and focus
sufficient locking screw options into the intermediate
column.
33

Product Highlights. Spine
Spine. In-Space
Lumbar Spinal Stenosis (LSS) usually affects middle-aged and older adults with debilitating pain in their buttocks or
legs. The traditional surgical procedure to relieve patients from pain caused by lumbar spinal stenosis involves removing
the bone and soft tissues of the spine that are pinching the nerves. In-Space is an implant that facilitates
the interspinous distraction by widening the openings that accommodate the nerves or the spinal cord.
LSS is a widespread pathology which leads to decreased physical activity
levels. The patients most often experience numbness, weakness,
or cramping while standing upright or walking for any distance. This
leg pain is intensified when the patient bends backwards and decreases
when the patient sits down or leans forward. The reason for this
is a compression of neural structures in the posterior part of the spine
when it is in extension. It is caused by a tendency of the foramen
(openings where the nerve roots exit the spine or canal that accommodates
the spinal cord) to narrow in the elderly population. At some
stage, these openings cannot accommodate the nerve roots or spinal
cord any longer without causing pain. Bending backwards (extending)
narrows these openings even more, which explains the intensifying
of pain in this situation.
People in their 60s or 70s are typical patients suffering from Lumbar
Spinal Stenosis (LSS). In fact, LSS is the most common indication for
surgery in people over 60 years old in the United States. It is estimated
that as many as 250,000 to 500,000 people in the US alone have
symptoms of spinal stenosis. This represents about 5 of every 1000
Americans older than 50 years and this number is expected to grow
as members of the baby boomer generation reach their 60s over the
next decade. The trend is global, with the majority of the world’s older
persons residing in Asia (53 percent), and Europe having the next
largest share (25 percent).
spinous processes in a procedure that generally does not last longer
than twenty minutes. It acts as a mechanical block that prevents the
painful extension of the spine and slightly distracts the affected spinal
segment on the back, thus widening the openings that accommodate
the nerve roots or the spinal cord. This is achieved with much
less damage to muscles and ligaments, since the device is implanted
percutaneously through a tiny incision on the side and through a small
tube, leaving all the important structures intact. The implant is secured
to prevent migration through wings, as shown on the images.
These wings are deployed using the insertion instrument, after the
implant has reached its correct position. Since the implant additionally
decreases the pressure on the posterior part of the disc and the
facet joints, it can help patients with leg pain as well as patients with
pain in the lower back.
The following case study (courtesy of Prof. Dr. M. Mayer, Munich)
illustrates the working principle of In-Space.
Surgical treatment of LSS
These patients can oftentimes be helped by an intervention called
surgical decompression. This procedure involves removing the bone
and soft tissues of the spine that are pinching the nerves in order to
make those openings wider again to relieve pressure on the nerve
roots. The disadvantage of this intervention is the need for an open
surgery with all the risks involved. Further, many important structures
surrounding the spine (muscles, ligaments) are compromised during
the decompression surgery. Depending on the extent of the decompression,
the stability of the treated spine segment itself may also
be compromised.
Recent developments include implants used in surgery to treat the
symptoms of spinal stenosis, while preserving as much normal motion
in the spine as possible. In-Space, a new spine implant from Synthes,
offers a superior surgical solution. In-Space is implanted between the
Case study This 53-year old male patient had low back pain. He
rated the pain at 5 on the VAS 10-point scale (Visual Analogue Pain
Intensity Scale) and 39 points on the Oswestry Disability Index (ODI)
for 6 months. Diagnosed with spinal intermittent claudication, this
patient had a walking range of 500 metres. Conservative treatment,
including epidural injections was unsuccessful. In July 2006, the
patient underwent percutaneous implantation of an In-Space type of
interspinous spacer and reported pain relief immediately after
surgery. One year later, the patient rated the pain at VAS

Synthes. Annual Report 2007
a
b
c
d
Fig. a–d: Lumbar spine X-rays:
pre-operative/postoperative comparison: noticeable
correction of retro-listhesis. Correction of hyperlordosis.
Enlarged posterior disc height and intervertebral
foramen.
35

Product Highlights. Cranio-Maxillofacial
Cranio-Maxillofacial. MatrixNEURO Cranial Plating System
The Synthes MatrixNEURO system contains a complete line of implants (plates and screws) and instruments. The
plating system is intended for a wide variety of cranial indications such as craniotomies, cranial trauma repair and
reconstruction. The system offers several advantages for both the surgeon and the patient in comparison to traditional
surgical methods.
The MatrixNEURO system is intended for the treatment of a wide variety
of cranial indications, e.g. craniotomy, cranioplasty, skull base
surgery, depressed skull fracture. A craniotomy is the most common
open procedure performed by neurosurgeons to achieve access to
the brain. It is defined as the surgical removal of a section of bone
(bone flap) from the skull for the purpose of operating on the underlying
tissues. Over 1,000,000 craniotomies are performed each year
around the world to relieve pressure inside the skull and to treat neurologic
diseases and disorders such as tumors, aneurysms, vascular
malformations, seizures, and strokes.
First, the screws self-retain to the screwdriver blade and are self-drilling
for quick insertion and fast closure of bone flaps. The plates and
mesh are available in a wide variety of shapes and sizes which offer
manifold options for surgeons to treat numerous indications. The plates
and screws are low in profile which provides better cosmetic results
and minimal palpation in areas of the head with very little soft
tissue coverage. The MatrixNEURO system also includes ergonomic
instrumentation for the neurosurgeon which is housed in a modular
case, providing the hospital flexibility in the storage of neuro fixation
instruments and implants.
Craniotomies are good examples of a procedure where the use of the
MatrixNEURO is beneficial. Once the neurosurgical repair has been
performed, the bony anatomy must be restored to its original position.
The traditional method of fixating the cranial bone flap includes
drilling a series of holes around the bone flap and the patient’s native
skull. Stainless steel wire or suture material is then passed through
the holes to secure the bone flap in place. Although this technique
is well-established and initially provides acceptable closure of the
bone flap, it has many disadvantages. Wire closure is tedious and
time-consuming and may be insufficient to provide long-term stability,
especially in cases of severe trauma or bone infection.
Patients having cranial procedures desire to return to their normal
lives without obvious physical signs of their surgical experiences. The
low profile Synthes MatrixNEURO cranial plating system not only provides
excellent long-term stable fixation but also an aesthetically pleasing
cosmetic result.
Advanced cranial fixation procedures
The use of plates and screws – a standard method of bone repair in
orthopaedics for more than 100 years – recently has been incorporated
into cranial fixation procedures. The MatrixNEURO system offers
a complete line of plates, screws and mesh designed specifically
for neurosurgical fixation. This system offers many advantages over
traditional methods.
36

Synthes. Annual Report 2007
MatrixNEURO is a cranial plating system which offers
a variety of plates, screws, and instruments intended for
the treatment of cranial indications. It provides longterm
stable fixation and an aesthetically pleasing cosmetic
result.
37

Product Highlights. Biomaterials
Biomaterials. chronOS Strip
Bone void fillers are scaffold materials that fill traumatically or surgically created gaps in the skeletal system. They
help prevent soft tissue in-growth during the healing process while simultaneously providing a pathway through
which new bone can form. chronOS Strip is an innovative ceramic composite offering surgeons improved handling
options over existing bone void fillers during spine fusions. It leverages two areas of expertise for Synthes: osteoconductive
ceramics and resorbable biocompatible polymers.
A common practice in spine fusions has been for surgeons to transplant
bone from a patient’s own iliac crest (hip) to the area of the spine
that is to be fused. This adjunct procedure to the spine fusion surgery
is referred to as autografting. While it offers the surgeon more
bone material to place at the fusion site, autografting usually requires
a second surgical incision site and often leaves the patient with
long-term pain in the hip from where the autograft bone was removed.
As an alternative to autografting, synthetic bone void fillers were developed.
They provide a medium for new bone growth while eliminating
the need for the second surgical site and subsequent longterm
hip pain. Beta tricalcium phosphate based ceramics perform well
in this role since they are composed of the same basic elements found
in natural bone, are biocompatible, and provide a uniform, threedimensional
pore structure that can be perfused with bone marrow
aspirated from the patient’s vertebral body or from the iliac crest.
With chronOS Strip, Synthes offers surgeons an osteoconductive ceramic
bone void filler that is 100% synthetic, easy to manipulate to
precisely fill the intended skeletal void, and an ideal carrier for a patient’s
own bone marrow. Due to the unique combination of materials,
chronOS Strip contains no human or animal derived substances.
Further, the implant can be rolled, folded, cut or sutured intraoperatively,
and then conformed to each patient’s anatomy. Finally, an innovative
perfusion pack facilitates the process of saturating the implant
with a patient’s own bone marrow or blood. The perfusion pack
can be connected to any standard syringe, such as the one found in
the Synthes Bone Marrow Aspiration System.
The unique features of chronOS Strip give surgeons the ability to offer
patients a safe and effective alternative to autografting procedures.
Need for an osteoconductive and flexible ceramic implant
A major drawback of standard ceramics however, is that they are by
nature rigid and brittle and are therefore difficult to precisely shape
to fit the skeletal structure. Intraoperatively, this means that a surgeon
must either start with a larger ceramic preform and meticulously
cut and burr it to fit the bone void, or pack small granules of the ceramic
into the void until it is adequately filled. Neither process is ideal.
The smaller granules can be difficult to handle and keep localized in
the bone void while the shaping of a larger preformed ceramic is often
tedious and time-consuming.
To address this clinical need, Synthes has designed a ceramic implant
that provides significant handling advantages over existing ceramic
preforms and granules. chronOS Strip is osteoconductive, i.e. it provides
a pathway through which new bone can form, and is replaced
with new bone in 6 to 18 months during the bone remodeling process.
Being a composite of Synthes chronOS and a resorbable, biocompatible
polymer, it leverages two areas of expertise for Synthes:
chronOS (beta tricalcium phosphate) is already effectively used to treat
trauma, spine and maxillofacial indications, while neuro, plastic,
and maxillofacial surgeons have relied on resorbable screws, plates,
and tacks from Synthes Cranio-Maxillofacial for many years.
38

Synthes. Annual Report 2007
chronOS Strip has several handling advantages over
existing ceramic bone void fillers traditionally utilized
in spine fusion surgeries. It is easily shaped to precisely
fill the skeletal void and stays localized once placed.
39

Product Highlights. Power Tools
Power Tools. Colibri/Small Battery Drive
The universal battery Power Tool system called Colibri or Small Battery Drive has been one of the star products in
the Power Tools portfolio to date. Suitable for a large range of applications, it is light, ergonomic and versatile. Several
new system components have been added over the years to provide surgeons with additional advantages.
Thanks to its unique features, this tool system has become the standard in many countries.
Colibri stands for Compact Light Battery Drill. "Small Battery Drive"
(the name used for this universal battery Power Tool system in the
US) highlights that this product is light and handy, and driven by a
small battery. Besides the excellent ergonomics and easy handling
there are particular features that make this power tool unique.
First, Synthes batteries do not have a memory effect. Our high-tech
charging technology eliminates the undesirable memory effect common
with Nickel Cadmium and (to a lesser extent) also Nickel Metal
Hydride batteries. Therefore, the Synthes batteries have a long usage
time during the surgery, even after several months of use.
Reliable protection of soft tissue
With its well-balanced hand piece, the Colibri /Small Battery Drive is
optimally designed for the anatomy of the hand, and soft tissue is
protected thanks to the drill’s integrated oscillating mode. In this
mode, the drill bit is not rotating but only oscillating around its own
axis. This feature is highly beneficial for patients; because the drill bit
never makes a whole turn, soft tissues and nerves cannot get wrapped
around the drill bit. In comparison to other available systems, the
hand piece of the Colibri/Small Battery Drive is very stable. Even when
the oscillating mode is used, it provides absolute stability in the surgeon’s
hand.
Versatile use
The system contains an extensive range of attachments to cover a variety
of uses. Trauma, foot, hand, paediatric, spine, veterinary and
cranio-maxillofacial surgeons all benefit from the wide range of attachments
which are designed to fit perfectly with the various Synthes
implant systems, thus providing optimal performance in practice.
The patented Oscillating Saw Attachment II was launched in 2006
and offers a new surgical technique for treating hallux valgus deformities
(deformation of the big toe). The major advantage of this oscillating
saw attachment is its cannulation which allows the setting
of a guide wire to create a half moon shaped cut, i.e. the crescentic
osteotomy for correcting the hallux valgus. The ability to check the
orientation of the cut to be made lowers the risk of a depression or
elevation of the toe after the surgery and makes the crescentic technique
feasable for the average surgeon.
Second, Synthes batteries are not sterilised, but inserted into a sterile
battery case before the surgery, eliminating the need for reprocessing
and sterilization of the battery, and allowing quick reuse with
full capacity. This procedure and our high-tech charging technology
guarantee the longest life time of batteries available on the market.
As a result, we offer a guarantee of one full year to our customers.
Extension of attachment range
In 2008, the attractiveness of the Colibri/Small Battery Drive system
will be further enhanced by the introduction of additional attachments.
New attachments with a higher drilling speed and new chucks
with a higher reaming torque are expected to be launched in mid
2008. An additional new feature will be the color coding of attachments
which will improve the visual differentiation in the operating
room.
In the veterinary field, the Oscillating Saw Attachment III for the “tibia
plateau leveling osteotomy” widely used in canine surgery will also
be launched in mid-year 2008. This saw attachment, together with
the corresponding new crescentic saw blades, will make this technique
much easier and will offer for the first time the possibility for
veterinarian surgeons to use one power system for all cutting procedures
during this type of surgery.
With these further extensions and improvements of its unique features,
the Colibri / Small Battery Drive system will provide additional advantages
for surgeons and further enhance its popularity worldwide.
Durable and powerful batteries
Long-lasting and powerful batteries in two different sizes ensure that
optimal power is provided according to the surgeon’s needs. Depending
on the application – simple or more demanding surgeries –
powerful or less powerful batteries can be employed. Surgeons benefit
from two advantages:
40

Synthes. Annual Report 2007
The Colibri/Small Battery Drive system is unparalleled
on the market and enjoys great popularity among surgeons
globally. A wide attachment range offers a variety
of uses in many different types of surgery.
41

This annual report is published in English and in
German. The original language is English.
Concept and design
Synthes, Marketing Services & Communications
Oberdorf, Switzerland
Synthes, Investor Relations
Solothurn, Switzerland
Ute Drewes, Visuelle Gestaltung und Illustration
Basel, Switzerland
Photography
Fotoarchiv Robert Bösch
Oberägeri, Switzerland
Lithography
Synthes, Marketing Services & Communications
Oberdorf, Switzerland
Desktop publishing
Ute Drewes, Visuelle Gestaltung und Illustration
Basel, Switzerland
Printed by
Druckerei Lüdin AG
Liestal, Switzerland
Products of Synthes, Inc. are covered by numerous
trademark registration in various jurisdictions
and by nearly 200 patents worldwide. Synthes is a
registered trademark.
60

www.synthes.com
USA and Canada
Synthes, Inc.
1302 Wrights Lane East
West Chester, PA 19380
USA
Tel. +1 610 719 5000
US Customer Service (toll free):
Tel. +1 800 523 0322
Europe, Middle East and Africa
Synthes GmbH
Glutz Blotzheim-Str. 3
4500 Solothurn
Switzerland
Tel. +41 32 720 40 60
Fax +41 32 720 40 61
ir.info@synthes.com
Asia Pacific
Synthes Asia Pacific
Suite 1a
Building 3, Level 3
20 Bridge Street
Pymble, NSW 2073
Australia
Tel. +61 2 9449 0400
Fax +61 2 9449 0499
Latin America
Synthes LAT, Inc.
703 N.W. 62nd Ave.
Suite 550
Miami, FL 33126
USA
Tel. +1 305 341 1022
Fax +1 305 341 1028
synthes.lat@synthes.com
035.000.164 1/08 © Synthes, Inc. Printed in Switzerland