Osteotech Initiates Pivotal Clinical Trial for DuraTech(TM) BioRegeneration Matrix

First of Several Products in Development Based On Osteotech's Proprietary Human Collagen Technology to Stimulate Natural BioRegeneration; FDA Filing Anticipated in Third Quarter 2009

Osteotech, Inc. (Nasdaq: OSTE), a leader in the emerging field of biologic products for regenerative healing, announced today that it has initiated a pivotal clinical trial for its DuraTech(TM) BioRegeneration Matrix. The first five patients in this 60-patient trial have already been enrolled. During the study's initial cranial surgical procedures, the patients' dura mater (the tough, outermost membrane surrounding the brain and spinal cord) was successfully repaired by surgeons using the DuraTech BioRegeneration Matrix.

This pivotal clinical trial will evaluate 60 surgical patients at 30 and 90 days post-operatively to assess the safety and efficacy of the DuraTech BioRegeneration Matrix compared to historical surgical procedure outcomes. Once this trial is completed, Osteotech plans to file a medical device premarket submission, or 510(k), with the United States Food and Drug Administration (FDA). Osteotech anticipates filing the 510(k) during the third quarter of 2009 to secure marketing clearance.

"DuraTech is the first of several extremely promising products that we have in development based on our innovative human collagen technology platform," stated Sam Owusu-Akyaw, Osteotech's President and Chief Executive Officer. "Our human collagen platform positions Osteotech as first-in-class with this new biomaterial and enables us to respond to the growing surgeon demand, and address patient need, for safe and clinically effective regenerative healing surgical products."

"DuraTech is designed to stimulate the body's natural bioregenerative processes that accelerate healing and reduce the potential for immune reactions," added Mohammed Attawia, M.D., Osteotech's Vice President of Product Development. "Additionally, surgeon feedback during these preclinical trials indicate that DuraTech is easier to handle and provides greater flexibility during surgery than competitive products."

The DuraTech BioRegeneration Matrix is the leading product in Osteotech's collagen platform, which is based on Osteotech's breakthrough and proprietary human collagen technology.

DuraTech will also provide surgeons with the clinical flexibility to cut, shape and suture the material to fit each patient's needs. Based on available data, Osteotech estimates that the market for dural repair substitutes is approximately $100 million.

In addition to the DuraTech BioRegeneration Matrix, which is expected to launch late this year, Osteotech plans to introduce additional human collagen-based tissue products over the next several years that address patient needs and expand the addressable market for this innovative technology, including: rotator cuff repair, wound care applications and abdominal wall reconstruction.

About DuraTech(TM) BioRegeneration Matrix

Utilizing Osteotech's collagen technology, DuraTech is an engineered nano-structure human collagen material that provides a porous scaffold for rapid cellular in-growth to facilitate healing. The DuraTech BioRegeneration Matrix is the lead product in Osteotech's collagen platform and is designed to be utilized to repair the dura mater, a fibrous membrane that protects the brain and the spinal cord, when the dura mater has been compromised due to injury or surgery. Osteotech's proprietary collagen technology platform is supported by three pending patent applications.

About Osteotech

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