Bacterin forays into medical devices with acquisition of Robinson MedSurg

Bacterin International Holdings, Inc. (NYSE Amex: BONE), a leader in the development of revolutionary bone graft material and anti-infective coatings for medical applications, has acquired the assets of Robinson MedSurg LLC (RMS), a medical device distribution company focused primarily on maxillofacial and craniofacial surgery devices.

For consideration of $1 million in Bacterin common stock at the closing date, Bacterin acquired approximately $500,000 in inventory, existing commercial agreements and intellectual property, including a number of patents and patent applications. Upon the achievement of certain revenue goals generated by the assets over a two-year period, additional Bacterin common stock valued at $1 million will be paid to RMS.

As part of the transaction, Bacterin has retained certain key employees of RMS, and engaged the president of RMS, Dr. Randolph C. Robinson M.D., D.D.S., F.A.A.C.S., as a consultant to Bacterin's sales force for RMS products. Dr. Robinson is also a highly accomplished surgeon and thought leader in Cranio Maxillo Facial Reconstruction and trauma to the face.

"We expect this acquisition to leverage our sales force, which will now have additional products to sell into the same call points," said Guy Cook, Bacterin's chairman and CEO. "This acquisition also represents our first foray into medical devices that will eventually use our anti-microbial coatings."

RMS brings to Bacterin a well-established network of independent distributors throughout the United States and internationally. Bacterin plans to expand upon this network with its 60 company sales reps and 450 independent reps, as well as further enhance the RMS product line with its antimicrobial coatings.

"We will leverage our sales force by first selling RMS uncoated orthopedic implants, then by this time next year, we expect to have FDA concurrence use for anti-microbial coating on these implants," said Cook. "We expect to be the only company in the space that can offer this technology with anti-microbial coatings, which we believe has an estimated $600 million market potential."

The acquired RMS product line is comprised of implantable medical devices for maxillofacial, craniofacial, and orthopedic uses. It includes a complete compact bone plating systems; patented small bone generator and craniofacial bone generator distraction devices; and the Patent-pending QuickScrew™ system, a unique pre-loaded surgical screw delivery system that provides a new level of speed and convenience during surgery.

RMS products have received approval at various marquee hospitals, with approved vendor status anticipated soon by the VA Hospital system. Bacterin is now pursuing the FDA market approval process to add its anti-microbial coatings to the RMS product line, and plans to submit a 510(k) application before the end of the year. "We believe this will add an additional and important differentiating IP protection to our product line and we hope to receive approval in 2012," noted Cook.

"We will continue to be opportunistic in terms of our M&A activity, with a focus on orthopedic implants for the extremities, such as foot and ankle, hands, cranial, and maxillofacial," said Cook, "and we plan to eventually establish a credit facility to fund our M&A program."