Healthcare Industry News:   Novation 

Devices Group Purchasing

 News Release - May 10, 2007

Osteotech Enters Into Single Source Agreement With Novation

EATONTOWN, N.J., May 10 (HSMN NewsFeed) -- Osteotech, Inc. (Nasdaq: OSTE ) announced today that it has entered into a single source agreement with Novation, LLC, the leading health care contracting services company in the United States, serving the purchasing needs of nearly 2,500 members of VHA Inc. and University HealthSystem Consortium (UHC), two national health care alliances. Under the terms of this agreement, Osteotech will offer Novation's alliance members Osteotech's line of proprietary allograft products, including Grafton® DBM, Xpanse(TM) Bone Inserts and Graftech® Structural Allografts, as well as traditional allograft bone tissue grafts and Osteotech's PEEK-based GraftCage® Spacers. The term of the agreement is for thirty-six months effective July 2, 2007, with two one-year renewal options.

Robert M. Wynalek, Osteotech's Domestic President, stated, "We are very excited about our agreement with Novation. Relationships with group purchasing organizations are a key component to our domestic distribution strategy. As we expand our product portfolio, we believe our work with group purchasing organizations will be key channels to leverage one-stop OsteoBiologic product solutions."

Certain statements made throughout this press release that are not historical facts contain forward-looking statements (as such are defined in the Private Securities Litigation Reform Act of 1995) regarding the Company's future plans, objectives and expected performance. Any such forward-looking statements are based on assumptions that the Company believes are reasonable, but are subject to a wide range of risks and uncertainties and, therefore, there can be no assurance that actual results may not differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, differences in anticipated and actual product and service introduction dates, the ultimate success of those products in the market place, the continued acceptance and growth of current products and services, the impact of competitive products and services, the availability of sufficient quantities of suitable donated tissue and the success of cost control and margin improvement efforts. Certain of these factors are detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. All information in this press release is as of May 10, 2007 and the Company undertakes no duty to update this information.

Osteotech, Inc., headquartered in Eatontown, New Jersey, is a global leader in providing OsteoBiologic solutions to surgeons and patients for the repair of the musculoskeletal system through the development of innovative therapy-driven products that alleviate pain, promote biologic healing and restore function. For further information regarding Osteotech or this press release, please go to Osteotech's website at http://www.osteotech.com .


Source: Osteotech

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