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 Monday, August 21, 2000 ORTHOLOGIC SIGNS EXCLUSIVE SALES AGREEMENT WITH DePuy AcroMed FOR SPINALOGIC Premier Spine Products Company, With 300 U.S. Sales Representatives, To Begin Selling SpinaLogic Worldwide TEMPE, Ariz., August 21, 2000 - OrthoLogic Corp. (Nasdaq: OLGC) announced today that the company has entered into an exclusive worldwide sales representation agreement with DePuy AcroMed, Inc., a unit of Johnson & Johnson (NYSE: JNJ) for SpinaLogic, OrthoLogic’s state-of-the-art device used as an adjunctive treatment after lumbar spinal fusion surgeries to increase the probability of obtaining a successful fusion. The agreement gives DePuy AcroMed exclusive worldwide rights to sell SpinaLogic for a 10-year period, beginning August 18, 2000. OrthoLogic will manufacture the product and perform certain customer services in the U.S. market, including fitting patients and all billing and collection activities. The companies will also begin working together to develop opportunities for SpinaLogic in markets outside the U.S. SpinaLogic is an externally worn, non-invasive device weighing less than two pounds and requiring only 30 minutes of daily treatment. The company received FDA approval in December 1999 to market the device after conducting human clinical trials that showed a significant increase in the probability of a successful fusion when using SpinaLogic. SpinaLogic uses the same patented Combined Magnetic Field (CMF) technology featured in the company’s OL-1000 bone growth stimulator used for the treatment of non-union fractures. SpinaLogic represents an improved treatment option compared with existing lumbar spine stimulation devices, which incorporate older technology requiring significantly longer daily treatment times. "This is a major development for OrthoLogic," said Thomas R. Trotter, OrthoLogic’s president and chief executive officer. "Since the launch of SpinaLogic last December, we achieved excellent commercial success by utilizing a combination sales approach that included representatives of OrthoLogic’s own direct sales force plus several regional spine product distributors. While this approach served us well during the initial launch period, we believe that in order to achieve a market share leadership position for SpinaLogic, we need to form an alliance with a major worldwide player in the spinal products market. Clearly, DePuy AcroMed, with approximately 300 sales representatives, and a highly regarded sales organization, meets that requirement. We look forward to working with DePuy AcroMed to significantly expand SpinaLogic’s presence in the spinal market not only in the U.S. but worldwide as well." Trotter indicated that the transition from the existing sales and distribution approach to the new organization would begin immediately. "Any time you make a major sales and distribution change of this magnitude, there is some potential for short-term disruption of ongoing activities. In order to maximize the opportunity created by this agreement, OrthoLogic and DePuy AcroMed have implemented a transition plan for the business. The expectation is that the transition will begin in the third quarter, with full implementation by the end of 2000. In addition, OrthoLogic will be scaling up its support activities throughout this timeframe in order to keep pace with the increased number of sales representatives selling SpinaLogic." DePuy AcroMed, Inc., (www.DePuyAcroMed.com) a Johnson & Johnson company, develops, manufactures and markets implants and instruments for the treatment of cervical, thoracic, lumbar and sacral spinal pathologies. OrthoLogic develops, manufactures and markets proprietary, technologically advanced orthopedic devices designed to promote the healing of musculoskeletal tissue. Founded in 1987, the company is located in Tempe, Ariz. For more information, please visit the company’s Web site: www.orthologic.com. Statements in this release that are not historical may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially. For a more complete description of the risks and uncertainties that face the company, please see the company’s annual report on Form 10-K for the fiscal year ended December 31, 1999, the company’s quarterly report on form 10-Q for the period ended June 30, 2000, and other documents filed by the company with the Securities and Exchange Commission. |
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