NGN Capital co-leads a $42.2 million Series B financing in Small Bone Innovations, Inc.

New York, NY, January 4, 2006 - NGN Capital, a $250 million global healthcare venture fund, announced today its investment in Small Bone Innovations, Inc. (“SBI”), which recently completed the largest orthopedics venture round to date at $42.2 million as recorded by Venture Source.

Funds advised by NGN Capital and 3i co-led the financing, which included $12 million from each of the two groups. The syndicate also included Anspach Investments, LLC; Axiom Venture Partners III, L.P.; TGAP Venture Capital Fund, L.P.; Viscogliosi Brothers, LLC; SBI employees; and a select group of leading orthopedic surgeons.

Founded in 2004, SBI was the first company to focus purely on arthritis and trauma in small bones and joints in the upper and lower extremities (shoulder to fingertip and mid-calf to the toe). The company has a deep pipeline of implants, fixation and tissue technology products which will enable it to take advantage of the strong growth in this niche of the orthopedics market.

Kenneth S. Abramowitz, a Managing General Partner of NGN Capital, will represent NGN Capital on the SBI board. Abramowitz stated, “We are very excited to join the board of SBI and look forward to helping guide the company’s expansion in the marketplace.”

John R. Costantino, a Managing General Partner of NGN Capital who will hold an observer seat said, “This investment represents a terrific opportunity in this rapidly growing segment of the orthopedics market, both in the US and Europe.”

Abramowitz further commented, “We are very pleased to have invested in a talented and experienced management team which, when combined with the resources of NGN, will accelerate the company’s penetration in the global marketplace.”

Anthony G. Viscogliosi, founder of SBI with Viscogliosi Brothers, LLC in New York, will serve as Chief Executive Officer. Viscogliosi stated, “We are very gratified to have completed this financing round with such a reputable syndicate. The financing proceeds will be used to expand SBI’s marketing and infrastructure. During the next 18 months, the company expects to double its revenues through new product introductions and small acquisitions.” Michael Simpson is the Chief Operating Officer of SBI.

Goodwin Procter LLP’s Boston office acted as lead counsel to the syndicate.

About NGN Capital

NGN Capital is a global healthcare venture capital investment firm with offices in New York, Heidelberg, Germany and Greenwich, Connecticut. NGN has investment capabilities across all the major segments in healthcare, including pharmaceuticals, biopharmaceuticals, medical devices, diagnostics, and healthcare services.

More information on NGN can be found at www.ngncapital.com
Contact: Loren A. Busby, 212-972-0077
lbusby@ngncapital.com

About SBI

Small Bone Innovations, Inc. was founded in 2004 by Viscogliosi Bros, LLC (VB), the New York based merchant banking firm specializing in the musculoskeletal / orthopedic sector. VB created SBI as the first company to focus purely on small bone and joint science. By integrating established companies and professionals in the field, SBI today offers a broad, clinically proven portfolio of products and technology to treat trauma and diseases in small bones and joints.

VB’s acquisitions and technology licenses include: Avanta Orthopedics, Inc. (hand/wrist/elbow arthroplasty and trauma products – USA); Envision Manufacturing, Inc. (implant manufacturing – USA); Actipore™ (a unique porous TiNi alloy developed by Biorthex, Inc. in Canada for use in implants); Artelon® (biologically active and biodegradable technology – Sweden); Xtremi-T, LLC (resorbable trauma technology – USA); and Fixano, S.A.S. (broad line of small bone & joint implants – France).

For more information on SBI visit: www.totalsmallbone.com

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