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North America Equity Research
10 May 2011


Overweight
BioMimetic Therapeutics
BMTI, BMTI US
Price: $13.39
Panel Docs More Onerous Than Expected; Still See

09 May 2011
Path to Approval - ALERT
FDA released the briefing documents this morning for BMTI's Thursday panel review
Medical Supplies & Devices
of Augment bone graft. The tone of the documents is more negative than expected,
Michael WeinsteinAC
with FDA raising questions around the trial design and primary endpoint, efficacy, and
(1-212) 622-6635
longer term safety.
mike.weinstein@jpmorgan.com
BMTI is setting up for a busy Thursday and the company appears to have its
Kimberly Gailun
(1-617) 310-0740
work cut out for it based on the nature of FDA’s questions in the panel documents.
kimberly.w.gailun@jpmorgan.com
While most of the topics included in this morning's documents were expected items,
the language around safety and efficacy comes across as more prosecutorial in
Ross Comeaux
(1-212) 622-1895
nature than we would have expected and has the shares down in today’s trading.
ross.w.comeaux@jpmorgan.com
We still see a path to a favorable panel, even after picking through the host of
Christopher Pasquale
FDA concerns. Company management, as well as the panel members, have had
(1-212) 622-6590
access to this document for over a month now, and we expect the panel to be well-
christopher.t.pasquale@jpmorgan.com
educated coming into Thursday's meeting. We also expect BMTI to be prepared,
J.P. Morgan Securities LLC
and at the end of the day continue to view the risk/benefit as in favor of Augment
approval.
Specifically, the FDA cites concerns around: (1) the trial design and use of CT
scan as the primary endpoint, as this is not the standard of care; (2) the
heterogeneous nature of patient enrollment (ankle and hindfoot fusions); (3)
efficacy, in light of trial design concerns; and (4) long term safety. Clearly the
Agency signed off on the IDE and original protocol, and we are optimistic that FDA
is increasingly comfortable with the analysis of the modified intent to treat (MITT)
vs. intent to treat (ITT) population, though these questions are also raised in the
documents. FDA does concede that BMTI has a non-inferior study, but wants further
assurance around the risk/benefit argument compared to autograft.
Augment itself has a compelling safety profile, but today’s documents indicate the
Agency is concerned about longer term safety of the product. The risk here is FDA
makes this a "class" decision, based on other recombinants like Medtronic’s BMP
(and Amplify, which failed to win FDA approval after a split panel last summer)
which have shown a potential cancer signal. Based on good safety data for Augment,
we think an approvable recommendation with post market follow up is a very
possible outcome.
However, we are incrementally cautious based on FDA's tone in this morning's
documents. We do question the ability of the Agency to block a product from the
market simply because of the potential that there could theoretically be cancer risk
on longer term follow up, particularly when FDA has an approved product out there
(InFuse) with known risk. In light of the InFuse experience, we see potential for
approval with specific risk labeling (i.e. black box warnings), which would still
allow for healthy adoption in the foot and ankle space.
Lastly, FDA cites concerns from the Data Safety Monitoring Board (DSMB) in
its report. DSMB did request additional data from BMTI on the clinical side
(reporting of non-unions), and has since signed off on the response.

See page 2 for analyst certification and important disclosures.

J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision.

Michael Weinstein

North America Equity Research
(1-212) 622-6635

10 May 2011
mike.weinstein@jpmorgan.com
Analyst Certification:
The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily
responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with
respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report
accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research
analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the
research analyst(s) in this report.
Important Disclosures

Market Maker: JPMS makes a market in the stock of BioMimetic Therapeutics.
Lead or Co-manager: J.P. Morgan acted as lead or co-manager in a public offering of equity and/or debt securities for BioMimetic
Therapeutics within the past 12 months.
Client of the Firm: BioMimetic Therapeutics is or was in the past 12 months a client of JPM; during the past 12 months, JPM
provided to the company investment banking services.
Investment Banking (past 12 months): J.P. Morgan received, in the past 12 months, compensation for investment banking services
from BioMimetic Therapeutics.
Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking
services in the next three months from BioMimetic Therapeutics.

BioMimetic Therapeutics (BMTI) Price Chart

Date Rating
Share
Price
Price Target
32
($)
($)
19-Aug-10 OW
9.22
15.00
OW $16
03-Nov-10 OW
11.55
16.00
24
03-May-11 OW
13.12
17.00
OW $15
OW $17
Price($)

16
8
0
Aug
May
Feb
Nov
Aug
May
07
08
09
09
10
11
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Initiated coverage Aug 19, 2010. This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst
may or may not have covered it over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.


Explanation of Equity Research Ratings and Analyst(s) Coverage Universe:
J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] J.P. Morgan Cazenove’s UK Small/Mid-Cap dedicated research
analysts use the same rating categories; however, each stock’s expected total return is compared to the expected total return of the FTSE
All Share Index, not to those analysts’ coverage universe. A list of these analysts is available on request. The analyst or analyst’s team’s
coverage universe is the sector and/or country shown on the cover of each publication. See below for the specific stocks in the certifying
analyst(s) coverage universe.


Coverage Universe: Michael Weinstein: Abbott Laboratories (ABT), Baxter Intl (BAX), Becton, Dickinson & Co (BDX),
BioMimetic Therapeutics (BMTI), Boston Scientific Corporation (BSX), C.R. Bard Inc. (BCR), CareFusion (CFN),
Covidien (COV), Edwards Lifesciences (EW), Heartware International (HTWR), Johnson & Johnson (JNJ), Kinetic
2


Michael Weinstein

North America Equity Research
(1-212) 622-6635

10 May 2011
mike.weinstein@jpmorgan.com
Concepts, Inc (KCI), Medtronic (MDT), St Jude Medical (STJ), Stryker Corp (SYK), Talecris Biotherapeutics (TLCR),
Tornier (TRNX), Zimmer Holdings (ZMH)

J.P. Morgan Equity Research Ratings Distribution, as of March 31, 2011

Overweight
Neutral
Underweight
(buy)
(hold)
(sell)
J.P. Morgan Global Equity Research Coverage
47%
42%
11%
IB clients*
50%
45%
33%
JPMS Equity Research Coverage
43%
49%
8%
IB clients*
70%
62%
56%
*Percentage of investment banking clients in each rating category.
For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category.

Valuation and Risks: Please see the most recent company-specific research report for an analysis of valuation methodology and risks on
any securities recommended herein. Research is available at http://www.morganmarkets.com , or you can contact the analyst named on
the front of this note or your J.P. Morgan representative.
Analysts’ Compensation: The equity research analysts responsible for the preparation of this report receive compensation based upon
various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues, which
include revenues from, among other business units, Institutional Equities and Investment Banking.
Other Disclosures

J.P. Morgan ("JPM") is the global brand name for J.P. Morgan Securities LLC ("JPMS") and its affiliates worldwide. J.P. Morgan Cazenove is a
marketing name for the U.K. investment banking businesses and EMEA cash equities and equity research businesses of JPMorgan Chase & Co.
and its subsidiaries.

Options related research: If the information contained herein regards options related research, such information is available only to persons who
have received the proper option risk disclosure documents. For a copy of the Option Clearing Corporation’s Characteristics and Risks of
Standardized Options, please contact your J.P. Morgan Representative or visit the OCC’s website at
http://www.optionsclearing.com/publications/risks/riskstoc.pdf.

Legal Entities Disclosures
U.S.: JPMS is a member of NYSE, FINRA and SIPC. J.P. Morgan Futures Inc. is a member of the NFA. JPMorgan Chase Bank, N.A. is a
member of FDIC and is authorized and regulated in the UK by the Financial Services Authority. U.K.: J.P. Morgan Securities Ltd. (JPMSL) is a
member of the London Stock Exchange and is authorized and regulated by the Financial Services Authority. Registered in England & Wales No.
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3

Michael Weinstein

North America Equity Research
(1-212) 622-6635

10 May 2011
mike.weinstein@jpmorgan.com
dealing as an agent, arranging, advising and custody, with respect to securities business under licence number 35-07079 and its registered address
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Bank, N.A., Dubai Branch is regulated by the Dubai Financial Services Authority (DFSA) and its registered address is Dubai International
Financial Centre - Building 3, Level 7, PO Box 506551, Dubai, UAE.

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General: Additional information is available upon request. Information has been obtained from sources believed to be reliable but JPMorgan
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“Other Disclosures” last revised January 8, 2011.

Copyright 2011 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of J.P. Morgan.#$J&098$#*P

4


Michael Weinstein

North America Equity Research
(1-212) 622-6635

10 May 2011
mike.weinstein@jpmorgan.com


5

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