Orthovita Announces FDA IDE Approval To Begin U.S. CORTOSS Vertebral Compression Fracture Pivotal Study.

Business Editors/Health/Medical Writers

MALVERN, Pa.--(BUSINESS WIRE)--Nov. 10, 2003

Pivotal Clinical Study Will Assess The Use Of CORTOSS In Treating VCF Using The Vertebroplasty Treatment Technique

Orthovita, Inc. (NASDAQ NM:VITA), a leading developer of orthopaedic biomaterials, reported today it has received an Investigational Device Exemption from the U.S. Food and Drug Administration allowing the company to begin a pivotal human clinical study to evaluate the safety and effectiveness of CORTOSS(R) Synthetic Cortical Bone Void Filler in the repair of vertebral compression fractures ("VCF"). Using the vertebroplasty treatment technique, Orthovita's pivotal U.S. study will assess the ability of CORTOSS to provide both pain relief and improvement in function to VCF patients by providing strength and stability to fractured vertebra.

In the vertebroplasty treatment technique that will be used in this study, low volumes of Orthovita's synthetic biomaterial, CORTOSS, will be injected percutaneously through the skin into the fractured thoracic or lumbar vertebra (T6 - L5) to stabilize and restore load-bearing capability.

"FDA approval to start our pivotal clinical study is an important milestone for Orthovita," said Antony Koblish, president and chief executive officer of Orthovita. "This approval follows a rigorous scrutiny of our U.S. pilot clinical data and of our European clinical data, so we are especially pleased both with the approved study design and the authorization to move forward," added Mr. Koblish.

FDA approval of the pivotal vertebroplasty clinical study marks the beginning of the final step in Orthovita's four step systematic process to attain marketing approval for CORTOSS in VCF. The first step in the process was completed in the first quarter of this year when CORTOSS was approved in Europe for VCF injections. The second step was also completed this year when the FDA approved pilot vertebroplasty clinical study completed patient enrollment, with 3-month clinical data presented at Eurospine in October showing significant reduction in pain and restoration of function for patients with VCF. The third step in the process is underway with the ongoing patient enrollment in our FDA approved kyphoplasty pilot clinical study. With FDA approval to proceed with the vertebroplasty pivotal clinical study, our four-step process is expected to allow CORTOSS to be studied as the biomaterial of choice for all forms of VCF treatment and allow the comparison of the results of the various treatment techniques on the basis of well designed, FDA approved safety and efficacy studies.

CORTOSS is a high-strength, biocompatible, self-setting composite specifically engineered to mimic the characteristics of the human body's weight-bearing structural bone. Administered using a pre-filled, unit dose disposable cartridge, CORTOSS has shown the ability to stabilize and provide immediate weight-bearing support to the spine, and thus reduce pain and improve function. CORTOSS is the first and only material approved, based upon clinical trial results, for marketing under a CE Mark in Europe for use in the augmentation of vertebral compression fracture procedures caused by osteoporosis and invasive tumors.

Unlike polymethylmethacrylate (PMMA), the orthopedic bone cement that is often used "off-label" in vertebral augmentation procedures, CORTOSS has been engineered for the treatment of vertebral compression fractures. In clinical use CORTOSS does not release any volatile monomers. Release of volatile monomers is common with the use of PMMA and has the potential to cause serious side effects. The CORTOSS mix-on-demand delivery system also does not require premixing, allowing the physician greater control over when the material can be applied during the procedure, even over multiple time points. Because it is inherently radiopaque, CORTOSS allows for excellent visualization of its placement under fluoroscopy or in post-operative imaging studies. The polymerization or setting of the material has a much lower temperature when compared to PMMA. Animal studies demonstrated that the CORTOSS-to-bone interface continues to be strengthened over time, with new bone being formed and integrated onto and into the material.

According to the U.S. National Osteoporosis Foundation, 700,000 vertebral fractures occur annually. The most common causes of vertebral compression fractures are osteoporosis associated with aging or chronic steroid use and metastatic disease. Each year, over 270,000 vertebral compression fractures are clinically diagnosed in the U.S. alone, with the number expected to rise in the years ahead. Patients are typically treated with external bracing, analgesics and bed rest. In a significant proportion of cases, patients are left with persistent pain and limited mobility. Bed rest and reduced mobility can have significant effects on a patient's quality of life, as well as on subsequent morbidity and mortality. For example, standard medical therapy for vertebral compression fractures may lead to additional bone mineral loss, thus increasing the risk of subsequent fractures.

About the Company

Orthovita is a biomaterials company with proprietary technologies applied to the development of biostructures, synthetic biologically active tissue engineering products for restoration of the human skeleton. Our focus is on developing novel products for use in spine surgery and in the repair of osteoporotic fractures. We are also addressing a broad range of clinical needs in the trauma market.

We have applied our technologies to the development of several products, VITOSS(R) Synthetic Cancellous Bone Void Filler, CORTOSS(R) Synthetic Cortical Bone Void Filler and RHAKOSS(TM) Synthetic Bone Spinal Implant, that we believe offer a wide range of clinical applications at various anatomical sites. In addition, we have developed IMBIBE(R) Bone Marrow Aspirate Syringe used with VITOSS and ALIQUOT(TM) Microdelivery System to be used with CORTOSS.

Orthovita also pursues opportunities to work jointly with other leaders in biomaterials research and product development. Orthovita established a collaboration with Kensey Nash Corporation (NASDAQ: KNSY) to commercialize new products based on Orthovita's proprietary, ultra porous VITOSS bone void filler material in combination with proprietary Kensey Nash biomaterials. The new products to be developed under this collaboration are expected to broaden the spectrum of surgical operations available to our surgeon customers and enhance the deliverability of our VITOSS product line.

VITOSS is a resorbable calcium phosphate scaffold that is highly porous and composed of extremely fine calcium phosphate mineral that allows for resorption, cell seeding and ingrowth of host bone. VITOSS is cleared for sale in the U.S. and Australia, and approved for sale under a CE Mark in Europe.

CORTOSS is a high-strength, self-setting composite engineered specifically to mimic the strength characteristics of human cortical bone. CORTOSS is cleared for sale in Australia and is approved for sale under a CE Mark in Europe for use in screw augmentation and vertebral augmentation procedures including compression fractures caused by osteoporosis and invasive tumors. CORTOSS is not available for commercial distribution in the U.S. We are conducting clinical studies of CORTOSS required for approval in the U.S. for use in vertebral augmentation procedures. In addition, we completed post-marketing human clinical studies of CORTOSS in Europe for its use in hip compression screw augmentation.

RHAKOSS is under development as a preformed composite that mimics the natural dual cortical-cancellous composition of human bone, providing high strength while also allowing for the ingrowth of host bone to address the vertebral interbody fusion and spinal reconstruction market. We are conducting clinical studies of RHAKOSS in Europe required to obtain a CE Mark for its use as an interbody fusion device.

This press release contains forward-looking statements regarding our current expectations of future events that involve risks and uncertainties, including without limitations, our VITOSS, CORTOSS and RHAKOSS products and other aspects of our business. Such statements are based on our current expectations and are subject to a number of substantial risks and uncertainties that could cause actual results or timeliness to differ materially from those addressed in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, our dependence on the commercial success of our approved products, our history of operating losses and our need for additional funds, our need to obtain and maintain regulatory approvals to sell our products, the rate at which we invest in our field sales network, the ability of our field sales network to generate new sales, our ability to enter into an agreement to commercialize and distribute VITOSS in Japan, our ability to manage commercial scale manufacturing capability and capacity, risks and uncertainties in pre-clinical and clinical trial results, market acceptance of our products, the sales levels of our products, research and development, competition and other risk factors listed from time to time in reports filed by the Company with the Securities and Exchange Commission, including but not limited to risks described in our most recently filed Form 10-K under the caption "Certain Risks Related to Our Business." Further information about these and other relevant risks and uncertainties may be found in Orthovita's filings with the Commission, all of which are available from the Commission as well as other sources. Orthovita undertakes no obligation to publicly update any forward-looking statements.