Osteotech, Inc. Reports Fourth Quarter and Full Year 2008 Financial Results; Company Plans Three Product Launches and Unveilings in 2009; Will Provide 2009 Guidance During Conference Call on March 5, 2009 at 9:00 a.m. EST

EATONTOWN, N.J., March 4 /PRNewswire-FirstCall/ -- Osteotech, Inc. , a leader in the emerging field of biologic products for regenerative healing, today reported financial results for the fourth quarter and full year ended December 31, 2008.

"The last twelve months were an important transitional time for Osteotech. Our entire team worked diligently to execute our corporate strategy to leverage the Company's proprietary technology portfolio into unique, procedure-driven products providing a stable platform to support long-term sales growth and profitability," said Sam Owusu-Akyaw, President and Chief Executive Officer of Osteotech. "We continued to receive U.S. Food and Drug Administration (FDA) clearances for new products and our 2009 plan includes the launch of our MagniFuse(TM) Bone Graft and Plexur M(TM) Biocomposite, the re-launch of the Plexur P(R) platform and the unveiling of our first product based upon our proprietary human collagen technology platform, the DuraTech(TM) BioRegeneration Matrix. Complementing our progress within product development, we have also continued to execute our strategy to streamline and strengthen our access-based agency sales model. We remain encouraged by the progress we are making in these strategies and believe that once these initiatives are fully executed we will be well positioned to emerge as a leader in regenerative and biologic healing."

Recent and 2008 Corporate Developments

Product Development and Regulatory

Corporate

Financial Results

Revenue for the three months ended December 31, 2008 was $24.6 million compared with $26.9 million for the three months ended December 31, 2007. The decline in fourth quarter 2008 revenue compared with 2007 was primarily driven by the expected reduction in private label Demineralized Bone Matrix (DBM) revenue of $2.6 million. Revenue for the full year ended December 31, 2008 was $103.8 million compared with $104.3 million for the full year 2007. Revenue for the full year was negatively impacted by the 62% reduction in private label DBM revenue, which was partially offset by the 15% growth achieved in the Company's international business and 2% growth in its domestic business.

Net loss for the fourth quarter ended December 31, 2008 was $409,000, or a net loss of $0.02 per diluted share, compared with net income of $806,000, or $0.04 diluted earnings per share, for the fourth quarter of 2007. Net income for the full year ended December 31, 2008 was $2.2 million, or $0.12 diluted earnings per share, compared with net income of $2.6 million, or $0.15 diluted earnings per share, for 2007. Net income in 2008 included a gain of $1.0 million associated with the settlement of certain litigation, while net income for 2007 was negatively impacted by costs of $1.0 million related to the settlement of certain litigation.

"Looking ahead, we expect 2009 to be an exciting year that will include the re-launch of Plexur P and the anticipated launches of MagniFuse, Plexur M and DuraTech," continued Mr. Owusu-Akyaw. "In addition, we expect our access-based agency sales teams to continue to develop and to successfully bring our new procedure-driven products to market. Three years ago we began developing our proprietary, high-technology product roadmap and by the fourth quarter of 2009, we expect to see tangible results stemming from the successful execution of our growth strategy. As a result, we believe we will be well positioned for long-term, profitable revenue growth in 2010 and well into the future."

Conference Call Tomorrow, March 5, 2009

The Osteotech management team will host a conference call on March 5, 2009 at 9:00 a.m. (EST) to discuss full year 2008 financial results and guidance for 2009. The conference call may be accessed by dialing 1-866-804-6920 (domestic) or 1-857-350-1666 (international) and indicating access code 93870509. The conference will also be simultaneously webcast at http://www.osteotech.com. A replay of the conference call will be available approximately two hours after completion of the live call, through midnight, on March 19, 2009, by dialing 1-888-286-8010 and using access code 66948463.

About Osteotech

Osteotech, Inc., headquartered in Eatontown, New Jersey, is a global leader in providing biologic solutions for regenerative medicine to support surgeons and their patients in 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, this press release or the conference call, please go to Osteotech's website at www.osteotech.com.

Certain statements made throughout this press release that are not historical facts are forward-looking statements (as 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, the Company's ability to develop and introduce new products, differences in anticipated and actual product and service introduction dates, the ultimate success of those products in the marketplace, 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 March 4, 2009 and the Company does not intend to update this information.

CONTACT: Company, Mark H. Burroughs, +1-732-542-2800, Investors, Jennifer
Beugelmans, +1-646-596-7473, or Media, Kelly Hennessy, +1-617-227-0552, all
of Osteotech, Inc.

Web site: http://www.osteotech.com/

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