Inion Oyj - Interim Management statement

Interim Management Statement

Inion Oy                                    
                           (“Inion or the “Company”)                            

                          Interim Management Statement                          

Tampere, Finland and Guildford, UK. 13 November 2008, Inion (LSE: IIN.L), a     
company focused on the development and commercialisation of novel biodegradable 
medical implants, today issues its Interim Management Statement (“IMS”) for the 
period 1 July 2008 to date.                                                     

Chris Lee, CEO of Inion, said: “We continue to make solid progress during 2008  
and our commercial operation in the focus segments of spine and speciality      
orthopaedics is gaining real momentum. The approval in July of three key spine  
products in the US was a significant milestone for the Company. These approvals 
have given us a unique biodegradable product offering for surgical graft        
containment procedures covering the entire length of the spine. We are now      
aggressively promoting this range of innovative leading-edge products through   
our new spine distribution network, and we are already seeing their sales build 
quickly in this important market. The significant progress that we are          
delivering in our core areas has however recently been temporarily offset by    
slower deliveries in our non-core US CMF (cranio-maxillofacial) business.       

“While the new growth trajectory being established for the streamlined Inion    
business is expected to enable the Company to become profitable in the medium   
term, it is clear that further funding will be needed in the short term to      
achieve this goal. The Directors of the Company continue to evaluate options    
that could provide the funding needed to bridge the period until Inion becomes  
profitable.”                                                                    

Financial Summary                                                               

Sales for the nine-month period ended 30 September 2008 were €3.7m, up 8% on    
2007 (€3.4m)                                                                    

Revenues in the core business, i.e. spine and speciality orthopaedics, rose 29% 
in Q3 2008 compared to Q3 2007 (€619,000 vs €479,000), and 16% for the          
nine-month period (€2.1m vs €1.8m). This growth has continued through October,  
particularly in the US.  Combined sales of spine and speciality orthopaedic     
products in the US for September and October now exceed combined sales of these 
products during all of the preceding months in 2008.                            

Third quarter sales of €1.1m are roughly equivalent to sales in the same period 
of 2007 but down 37% from the second quarter 2008 (€1.8m). The main reason for  
this sales performance in Q3 was the result of our main US distributor for CMF  
products reducing its purchases in order to hold lower levels of inventory.     

Sales growth by the end of the year is expected to be approximately 15% to 20%, 
or in the region of €6 million against a previous forecast of approximately €7  
million. This reduction in our 2008 sales expectations is the result of the     
delayed registration of our products in China, destocking by our US CMF         
distributor and a temporary loss of momentum in two European markets due to our 
decision to change to better long-term distribution partners.                   

Cash, cash equivalents and short-term investments totalled €7.77 million as at  
30 June 2008 (€13.82 million at 31 December 2007)                               

Operational Summary                                                             

Three key products for Inion's spine offering received US FDA 510(k) marketing  
clearance in July 2008 allowing the Company to accelerate commercial activities 
in the US spine market. US marketing clearances were received for:              
 - Inion S-1™ Anterior Cervical Fusion System 
 - Inion S-1™ Double-Level plate 
 - Inion S-2™ Anterior Thoraco-Lumbar Fusion System 

These systems consist of biodegradable plates and screws, which are designed for
bone graft containment in spinal fusion procedures. Such procedures are carried 
out as a treatment for a range of spinal conditions including ruptures and      
displacement of inter-vertebral discs. Inion's spinal surgery products received 
European marketing clearance in 2007.                                           

As an indication of the potential opportunity for Inion in the spine market, a  
cervical plating procedure using an Inion system equates to a sale of           
approximately €3,000, and in the US it is estimated that 187,000 such procedures
take place each year.                                                           

Inion's commercial operation continues to develop and deliver increasing sales. 
In the US, 42 distributors are currently engaged, with 22 focusing on the sales 
and distribution of speciality orthopaedics products and 20 focusing on spine   
product sales. US commercial activity is focused on the launch of the recently  
approved spinal graft containment systems alongside the training and engagement 
of high volume users in these areas. In the key markets within Europe and the   
Far East retraining the distributors' sales force continues, focusing on the    
core business areas of spine and speciality orthopaedics                        

Inion signed an out-licensing agreement in August with US firm Curative         
Biosciences Inc. covering novel bioactive technology for promoting bone regrowth
and repair when treating patients with broken bones. This represents a total    
deal value of approximately $2 million.                                         

In August, Inion elected Ian Paling as the Chairman of Inion, replacing Göran   
Ando, who stepped down from the Board. Ian has more than 25 years' senior       
management and Board-level experience, most recently as CEO of Corin Group PLC  
(LSE: CRG), a world leader in the development, manufacture and distribution of a
wide range of reconstructive orthopaedic devices.                               

                                     -ends-                                     

For further information, please contact:                                        

Inion Oy                                                                        
Chris Lee, Chief Executive Officer                                              
Julien Cotta, Chief Financial Officer                                           
Tel: +44 (0)1483 685390                                                         

Citigate Dewe Rogerson                                                          
Mark Swallow / Helena Galilee / David Dible	                                    
Tel: +44 (0)207 638 9571                                                        

About Inion (www.inion.com)                                                     

Inion Oy is a medical devices company focused on the development and successful 
commercialisation of innovative and unique biodegradable and bioactive surgical 
implants in selected high value orthopaedic market segments.                    

Inion's core expertise and technology lies in the design and manufacture of     
innovative biodegradable plates, screws, pins and membranes, which are used to  
enhance the healing of bone or soft tissue injuries to the skeleton, such as    
those caused by trauma or by reconstructive surgery. Inion implants are made    
from its proprietary Inion family of biomaterials, with properties tailored for 
specific surgical applications, in terms of strength, flexibility and rate of   
degradation                                                                     
                                                                                
Inion is also focused on developing proprietary new bioactive and biodegradable 
biomaterials that promote bone healing and accelerate patient rehabilitation.   

Inion was incorporated in early 2000 and listed on the Official List of the UK  
Listing Authority in December 2004 (ticker: IIN). The Company has offices in the
UK and US, and its head office, R&D and production facilities are in Tampere,   
Finland.                                                                        

This announcement includes "forward-looking statements" which include all       
statements other than statements of historical facts, including, without        
limitation, those regarding the Group's financial position, business strategy,  
plans and objectives of management for future operations (including development 
plans and objectives relating to the Group's products), and any statements      
preceded by, followed by or that include forward-looking terminology such as the
words "targets", "believes", "estimates", "expects", "aims", "intends", "will", 
"can", "may", "anticipates", "would", "should", "could" or similar expressions  
or the negative thereof. Such forward-looking statements involve known and      
unknown risks, uncertainties and other important factors beyond the Group's     
control that could cause the actual results, performance or achievements of the 
Group to be materially different from future results, performance or            
achievements expressed or implied by such forward-looking statements. Such      
forward-looking statements are based on numerous assumptions regarding the      
Group's present and future business strategies and the environment in which the 
Group will operate in the future. Among the important factors that could cause  
the Group's actual results, performance or achievements to differ materially    
from those in forward-looking statements include those relating to Inion's      
funding requirements, regulatory approvals, reliance on third parties,          
intellectual property, key personnel and other factors. These forward-looking   
statements speak only as at the date of this announcement. The Group expressly  
disclaims any obligation or undertaking to disseminate any updates or revisions 
to any forward-looking statements contained in this announcement to reflect any 
change in the Group's expectations with regard thereto or any change in events, 
conditions or circumstances on which any such statements are based. As a result 
of these factors, prospective investors are cautioned not to rely on any        
forward-looking statement.