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Updated: July 8th, 2008 05:26 PM CDT

Laserscope Announces Acquisition of Fiber Optics Manufacturer InnovaQuartz, Inc.

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The InnovaQuartz acquisition is expected to be accretive beginning in 2007. IQ will be managed and operated as a wholly owned subsidiary of Laserscope for the foreseeable future.

The Intracorporeal Stone Market

IQ is one of the few vertically integrated developers, manufacturers, and commercializers of advanced medical fiber optics in the world. IQ recently acquired proprietary intellectual property and manufacturing expertise, which it uses to produce a line of technologically advanced sterile fiber optic delivery devices available for use in intracorporeal laser lithotripsy, or the endoscopic treatment of kidney, bladder, and other urinary stones using holmium laser technology.

In the U.S. alone more than 200,000 intracorporeal stone treatment procedures are performed each year using various technologies with a larger number performed internationally. Sources predict that the number of holmiumstone treatment procedures in the United States is expected to grow atapproximately 15% per year through 2008 given the ease of use, speed, and relative safety of the holmium laser technology relative to other technologiesused for breaking up the hard materials that make up urinary stones. This growth rate exceeds the approximately 6% compounded procedural growth rate expected considering the aging population, dietary changes and other dynamics.

According to industry sources, the total market size for holmium laser capital equipment and disposable and reusable delivery devices for theseprocedures exceeds $50 million per year in the U.S. There are several thousand holmium stone treatment lasers already installed worldwide and over 300 holmium lasers are expected to be sold and installed in the U.S. each year through 2008. Over 50,000 holmium laser fiber optic delivery devices are soldeach year in the U.S. typically at prices ranging between $300 and $500/fiber.IQ's new fiber optic product line can be used on many if not most of the worldwide installed base of holmium laser systems. Given the technological superiority and competitive price of these products over other methods ofperforming intracorporeal lithotripsy, this translates to an immediate market opportunity.

"InnovaQuartz's disposable and reusable stone fiber revenue has grown at atremendous rate over the past two years. Given the favorable market dynamics and strong OEM relationships that InnovaQuartz has established, coupled with Laserscope's growing urology distribution expertise, we expect strong, consistent revenue growth from this new product line for the foreseeable future," Mr. Reuter concluded.


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