Devices Neurosurgery Orthopaedic

 News Release - March 15, 2006

Kyphon Announces International Expansion Plans

New Manufacturing, Distribution and R&D Facility in Neuchatel, Switzerland

SUNNYVALE, Calif., March 15 (HSMN NewsFeed) -- Kyphon Inc. (Nasdaq: KYPH ) today announced that it is establishing an operational presence in the Canton of Neuchatel, Switzerland to support the company's rapid international growth. Kyphon Sarl, the newly created Swiss company, will house manufacturing and distribution activities for Kyphon's international markets, as well as administrative activities including clinical, regulatory, marketing and shared financial services. In addition, certain global research and development activities will be performed by Kyphon Sarl, which will serve to augment Kyphon's current research and development center in Sunnyvale, California.

Kyphon's international revenues increased 87% in 2005 versus the prior year, with international markets representing 19% of the company's global sales during the most recent reporting quarter. The decision to establish a major facility overseas was in response to the growing needs of Kyphon's international markets, coupled with the company's desire to establish additional manufacturing capacity and gain access to new technical talent.

"One of the key priorities of our 2006 operating plan is to continue to drive the expansion of our international business," commented Richard Mott, President and Chief Executive Officer of Kyphon. "With our strong sales performance in overseas markets and the substantial progress we've been making on the regulatory and reimbursement fronts there, we believe additional investment in these markets should allow us to further capitalize on the opportunities they present. By establishing manufacturing, logistics and R&D activities in Europe, we are also increasing the company's overall manufacturing capacity and innovation pool. We consider the establishment of our Swiss operations as a sign of our commitment to our international markets and a milestone in our growth as a global company."

"We believe our new operations in Neuchatel, Switzerland will provide us with the logistical flexibility, scalability and technical talent to better serve our existing markets and to pursue development of additional overseas markets," stated Robert Vandervelde, President, International of Kyphon. "We selected Neuchatel in part due to its proximity to leading universities, R&D centers, orthopaedic industry suppliers and the pre-existing cluster of healthcare, medical device and biotechnology companies. We believe our location in the heart of such a region ensures access to a pool of highly educated, multi-lingual talent and innovative partners. In addition, the central location within Europe and the area's excellent infrastructure should allow us to provide optimal support to our customers' logistical and administrative needs. We look forward to leveraging this important investment in our international markets into increased productivity and profitability across our global business operations going forward."

Kyphon Sarl is beginning administrative operations immediately, and anticipates that it will have full manufacturing, distribution, R&D and administrative activities in effect by the end of 2007.

About Kyphon Inc.

Kyphon develops and markets medical devices designed to restore spinal function using minimally invasive technologies. The company's KyphX line of products are used in balloon Kyphoplasty, a minimally invasive procedure to treat spinal fractures caused by osteoporosis or cancer. For more information, visit Kyphon's Web site at http://www.kyphon.com.

Kyphon and KyphX are registered trademarks of Kyphon Inc.

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements include, but are not limited to, those that use words such as "believes," "expects," "anticipates," "targets," "intends," "plans," "projects," and words of similar effect, and specifically include the company's future financial projections and anticipated business direction and performance. Forward-looking statements are based on management's current preliminary expectations and are subject to risks, uncertainties and assumptions, which may cause the company's actual results to differ materially from the statements contained herein. Information on potential risk factors that could affect Kyphon, its business and its financial results are detailed in the company's periodic filings with the Securities and Exchange Commission (SEC), including, but not limited to, those risks and uncertainties listed in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations - Factors Affecting Future Operating Results," which can be found in Kyphon's annual report on Form 10-K for the year ended December 31, 2005 filed with the SEC on March 3, 2006. Kyphon undertakes no obligation to release publicly any revisions to any forward- looking statements contained herein to reflect events or circumstances after the date hereof.

Source: Kyphon

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