Orthovita 2010 third quarter increases 5% to $23.3 million

Orthovita, Inc. (NASDAQ: VITA), an orthobiologics and biosurgery company, today announced that product sales for the third quarter of 2010 were $23.3 million, a 5% increase over product sales of $22.3 million in the third quarter of 2009. For the first nine months of 2010, product sales increased 4% to $71.3 million compared to $68.5 million for the first nine months of 2009. Product sales for the first nine months of 2010 and 2009 included $1.1 million and $0.6 million, respectively, from sales to one customer of the Company's Vitomatrix™ bone graft material for use as a raw material in dental products. The supply agreement with this customer was terminated in March 2010, and no further sales relating to this agreement are expected.

Sales of Vitoss™ synthetic bone graft products increased 1% in the third quarter of 2010 compared to the year-earlier quarter. Within the Vitoss product family, sales of Vitoss Bioactive Foam products increased 12%, but this increase was largely offset by decreases in Vitoss Morsels and Foam products. For the nine months ended September 30, 2010, total Vitoss sales declined by 3% compared to the year-earlier period, with an 11% increase in Vitoss Bioactive Foam products offset by declines in Vitoss Morsels and Foam products.

U.S. sales of Cortoss™ Bone Augmentation Material and the Aliquot™ Delivery System used with Cortoss, were $1.0 million in the third quarter of 2010 compared to $0.4 million in the third quarter of 2009. For the first nine months of 2010, U.S. sales of Cortoss and Aliquot were $3.2 million compared to $0.4 million during the first nine months of 2009. The Company initiated a limited launch of Cortoss in the U.S. in the third quarter of 2009.

Sales of the Company's biosurgery products increased 4% during the third quarter of 2010 compared to the year-earlier quarter. For the first nine months of 2010, biosurgery product sales increased 8% compared to the corresponding year-earlier period.

Antony Koblish, President and Chief Executive Officer, said, "As we described in our second quarter financial release, in August 2010 we implemented a restructuring of our sales organization in an effort to better align our core direct and third-party distribution channels with changes in the spine and orthopedic markets, particularly the shift of vertebral augmentation procedures from the inpatient to the outpatient setting. Our direct sales representatives are marketing our three product platforms to the inpatient hospital market, where they are leveraging their relationships to cross-market our products within a select group of high-potential hospital accounts. We are shifting to greater reliance on distributors to market Cortoss to the outpatient market. While we are in the early stages of making this transition, we are encouraged that we achieved modest year-over-year increases in third quarter 2010 product sales, despite general weakness in the spine market."

The Company plans to release complete financial results for the third quarter of 2010 on November 2, 2010.