Acquisition

Smith & Nephew Plc
11 July 2006



SMITH & NEPHEW ACQUIRES OSTEOBIOLOGICS, INC.

Provides the only off-the-shelf bioabsorbable implant for articular cartilage
repair on the market in Europe



11 July 2006



Smith & Nephew plc (LSE: SN, NYSE: SNN) announced today its acquisition of
privately-held, Texas-based, OsteoBiologics, Inc. (OBI).



OBI markets innovative bioabsorbable bone graft substitutes (BGS) in Europe to
repair cartilage defects in the knee and offers the TruFit(TM )BGS Plugs in the
U.S. as a bone void filler.  OBI's products are an exciting addition to Smith &
Nephew's existing comprehensive arthroscopy portfolio and will be sold through
Smith & Nephew Endoscopy's global sales force.



Smith & Nephew has agreed to pay a net consideration of $72.3m in cash for OBI,
whose 2005 sales revenues were $3.3m.  The acquisition is expected to reduce
earnings by $7m in the second half of 2006 and be broadly neutral in 2007.



OBI's primary product marketed in Europe, TruFit(TM) CB, is a one-step
arthroscopic procedure for repairing bone and articular cartilage defects.
Cartilage is a protective covering of the articular surfaces of bones that
reduces friction and provides flexibility within the joint.  Cartilage defects
are often a result of traumatic injury or degenerative conditions and are often
found in conjunction with meniscal tears or ACL injuries.  There is strong
evidence that articular cartilage defects can lead to osteoarthritis.



Currently, less than 20 percent of cartilage defects in the knee are treated due
to the lack of an efficacious and patient-friendly solution.



'We view the opportunity to effectively treat articular cartilage defects as a
major opportunity for our Endoscopy business and have been looking at this area
for some time,' said Sir Christopher O'Donnell, Chief Executive of Smith &
Nephew plc. 'This unique technology from OBI strengthens our market leading
range of arthroscopy products for the benefit of surgeons and their patients. We
welcome the OBI team to Smith & Nephew.'



Enquiries


Debbie Scott                                       Tel: [phone]
Financial Dynamics, London

Jonathan Birt                                      Tel: [phone]
Financial Dynamics, New York

Joe Metzger                                        Tel: [phone]
Smith & Nephew Endoscopy





About Smith & Nephew:



Smith & Nephew (LSE: SN, NYSE: SNN) (www.smith-nephew.com) is a global medical
technology business, specialising in Orthopaedic Reconstruction, Orthopaedic
Trauma and Clinical Therapies, Endoscopy and Advanced Wound Management products.
Smith & Nephew is a global leader in arthroscopy and advanced wound management
and is one of the leading global orthopaedics companies.



Smith & Nephew is dedicated to helping improve people's lives. The company
prides itself on the strength of its relationships with its surgeon and
professional healthcare customers, with whom its name is synonymous with the
highest standards of performance, innovation and trust. The company has more
than 8,500 employees and operates in 33 countries around the world and generated
sales of nearly $2.6 billion.



This press release contains certain 'forward-looking statements' within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995. In
particular, statements regarding planned growth in our business and in our
operating margins discussed under 'Outlook' are forward-looking statements as
are discussions of our product pipeline. These statements, as well as the
phrases 'aim', 'plan', 'intend', 'anticipate', 'well-placed', 'believe',
'estimate', 'expect', 'target', 'consider' and similar expressions, are
generally intended to identify forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors (including, but not limited to, the outcome of litigation and regulatory
approvals) that could cause the actual results, performance or achievements of
Smith & Nephew, or industry results, to differ materially from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Please refer to the documents that Smith & Nephew
has filed with the U.S. Securities and Exchange Commission under the U.S.
Securities Exchange Act of 1934, as amended, including Smith & Nephew's most
recent annual report on Form 20F, for a discussion of certain of these factors.



All forward-looking statements in this press release are based on information
available to Smith & Nephew as of the date hereof. All written or oral
forward-looking statements attributable to Smith & Nephew or any person acting
on behalf of Smith & Nephew are expressly qualified in their entirety by the
foregoing. Smith & Nephew does not undertake any obligation to update or revise
any forward-looking statement contained herein to reflect any change in Smith &
Nephew's expectation with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.




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