IsoTis / GenSci Merger Complete: 'IsoTis OrthoBiologics' Emerges as a Major New Global Player LAUSANNE, Switzerland and BILTHOVEN, The Netherlands and IRVINE, Calif., Oct. 27 /PRNewswire-FirstCall/ -- IsoTis (SWX/Euronext Amsterdam: ISON) is proud to announce the full completion of the merger between IsoTis S.A. and GenSci OrthoBiologics Inc. (TSX: GNS). This marks the creation of a new global contender in the rapidly growing field of OrthoBiologics. With the combination of the two companies' sales and marketing functions and the integration of R&D virtually complete, IsoTis now stands well positioned towards establishing itself as a world market leader in OrthoBiologics, the fastest growing segment of the US$16 billion orthopedics market. The OrthoBiologics sector, driven in large part by an aging, increasingly active population, is expected to keep growing at double digit percentages for the next several years. IsoTis OrthoBiologics combines considerable expertise in natural bone grafts, synthetic bone graft substitutes, carrier technologies and growth factors. IsoTis has 6 leading edge products on the market, 9 more in the near to medium term pipeline and a focused, clearly defined longer-term research and product development program. The independent distribution network of 400 sales representatives provides a solid foundation for future top line North American growth, while a full product offering of leading edge technologies will help fuel the vigorous expansion of the highly fragmented, relatively underdeveloped European and international markets. As previously stated, in light of recent revenue growth and market penetration trends of the company's products, management expects that full-year 2003 sales of IsoTis OrthoBiologics will slightly exceed 2002 combined sales of US$23 million. Management expects IsoTis OrthoBiologics to become cash-flow break-even and profitable during 2005. Jacques Essinger, CEO of IsoTis OrthoBiologics said: "We are delighted at the completion of the merger. The opportunities for the company and its shareholders are significant. We have a strong product range on the market with substantial distribution power; we have a near-term pipeline and the development expertise to keep introducing new orthobiologics solutions; we have access to one of the world's largest research groups in our field to fuel long-term growth; and we have the organization and the financial resources to put the company on a steep growth curve in the years to come." IsoTis OrthoBiologics -- IsoTis OrthoBiologics was created in Q4 2003 through the merger of GenSci OrthoBiologics, a US-based orthobiology company, and IsoTis SA, a Swiss-Dutch biomedical company. The company operates out of its corporate headquarters in Lausanne, Switzerland, and its facilities in Bilthoven, The Netherlands and in Irvine, California, US. IsoTis OrthoBiologics has approximately 150 employees, a product portfolio with 6 orthobiology products on the market and 9 in development, pro-forma product sales of US$ 23 million in 2002, and is traded under the symbol "ISON" on both the Official Market Segment of Euronext Amsterdam, and the Main Board of the Swiss Exchange. For information contact: Hans Herklots Louis G. Plourde Media & investor relations Investor/shareholder relations Tel: +31(0)30 229 5271 Tel: + (800) 561-2955 (North America) Fax: +31(0)30 228 0255 E-mail: E-mail: Website: http://www.isotis.com/ (Certain statements in this Press Release are "forward-looking statements", including those that refer to management's plans and expectations for future operations, prospects and financial condition. One can identify these forward-looking statements by use of words such as 'strategy,' 'expects,' 'plans,' 'anticipates,' 'believes,' 'will,' 'continues,' 'estimates,' 'intends,' 'projects,' 'goals,' 'targets' and other words of similar meaning. One can also identify them by the fact that they do not relate strictly to historical or current facts. Such statements are based on the current expectations of the management of IsoTis S.A. and GenSci only. Reliance should not be placed on these statements because, by their nature, they are subject to known and unknown risks and can be affected by factors that are beyond the control of IsoTis/GenSci. Actual results could differ materially from current expectations due to a number of risk factors and uncertainties, including but not limited to the timely commencement and success of IsoTis' and GenSci's clinical trials and research endeavors, delays in receiving U.S. FDA or other regulatory approvals (a.o. EMEA, CE), market acceptance of the combined Company's' products, development of competing therapies and/or technologies, the terms of any future strategic alliances, the need for additional capital, the inability to obtain, or meet conditions imposed for the required governmental and regulatory approvals and consents, the risk that implementing the merger may not provide all or any of the benefits projected, as it will place significant demands on our management. For a more detailed description of the risk factors and uncertainties affecting IsoTis, refer to the Joint Information Circular and to IsoTis' reports filed from time to time with the Swiss Stock Exchange, SWX, Euronext Amsterdam N.V. For a more detailed description of the risk factors and uncertainties affecting GenSci, refer to the Joint Information Circular and to GenSci's reports filed from time to time with the Canadian securities regulators, available at http://www.sedar.com/. IsoTis and GenSci are not obligated to update or revise any forward-looking statements, whether as a result of new information or otherwise. This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.) ANNEX NOTICE TO GENSCI SHAREHOLDERS The merger has been effected by way of a Plan of Arrangement under the Company Act (British Columbia). In accordance with the Plan, the directors of GenSci Regeneration Sciences Inc. have fixed the initial share exchange ratio (the portion of an IsoTis Share to be exchanged for each GenSci share) at a minimum of 0.46 of an IsoTis Share for each GenSci Share. Later this week, on October 31, the GenSci board will make a final determination of GenSci's tax and other liabilities resulting from the plan of arrangement, at which time the final share exchange ratio will be determined. In no event will the share exchange ratio be less than 0.46 of an IsoTis Share for each GenSci share. The issuance of new IsoTis Shares is subject to formal registration of the shares in Switzerland, which is expected to be completed on October 30, 2003, barring any unforeseen circumstances. CORPORATE FACTSHEET Orthobiologics Defined: Orthobiologics combines advances in biotechnology, materials sciences and tissue biology to promote and enhance the body's natural ability to regenerate and repair musculoskeletal tissue. Corporate Overview ISOTIS Orthobiologics was created as a result of the merger between Swiss-Dutch biomedical company ISOTIS S.A., and US-based GenSci Orthobiologics, of Irvine, California. With expected 2003 revenues slightly exceeding the US$23 million pro-forma for 2002, more than US$50 million cash by the end of 2003, and highly complementary product and technology platforms, the new company is set to become a significant global force in orthobiologics, the fastest growing segment of the US$16 billion orthopedics market. The combined entity expects to sustain continued long-term growth in revenues through immediate development of its innovative orthobiologics pipeline. The companies have already identified a variety of ongoing product development programs that have the potential to lead to breakthrough products in musculoskeletal repair. Recent Developments The just-completed merger transaction and the months leading to its completion have provided both companies an opportunity to restructure, sharpen our focus, dramatically reduce operating expenses and divest or out-license non-core research programs, with a view to achieving rapid top line revenue growth and profitability while securing a downstream interest in non-core technology product development programs. * 10/03: ISOTIS and University of Twente Establish World Class Orthobiologics Research Group * 08/03: ISOTIS signs worldwide exclusive licensing agreement for Allox, its lead cell-based product treatment of chronic skin wounds with Healthpoint Inc. (USA) The Orthobiologics Market Bone graft substitutes, processed allograft products, and genetically engineered bone growth factors have significant future potential within orthopaedics. In line with trends in all of the major orthopaedic market segments, demographics will be the biggest driver increasing both value and volume of the bone graft substitutes market. As the global population continues to age, and the average level of physical activity grows, the number of orthopaedic procedures which require the use of bone grafts and substitutes will continue to increase. Further, minimally invasive procedures will encourage a greater percentage of the population to seek treatment. Principal Applications for Products Spinal Fusion Degenerative disc disease, characterized by a progressive compression of the intervertebral discs, afflicts nearly half the US population between forty and sixty years of age and approximately 90 percent of Americans older than sixty. Trauma Over 500,000 orthopaedic fractures occurring annually in the US eventually progress to delayed union or nonunion fractures. Among fractures not resulting from osteoporosis, sports injuries, automobile and heavy machinery accidents are the main culprits. Joint Revision Hip, knee, shoulder, and small joint replacements are common orthopaedic procedures designed to replace the function of joints, most often necessary due to advanced osteoarthritis. Bone Void Filling, Iliac Crest Backfills When a tumor is removed, or another type of bone void exists, bone graft or a bone substitute will usually be utilized to replace lost volume and provide an osteoconductive material to encourage bone growth. Craniomaxillofacial Surgery Grafting and bone substitutes are used in conjunction with craniomaxillofacial reconstruction and repairs. Oral and Periodontal Repair Oral and periodontal repairs usually require the use of a bone graft, filler or substitute and may be performed by oral surgeons, periodontists, and general dentists. Existing Product Platforms GenSci OrthoBiologics is recognized as a significant participant in the North American bone graft substitutes market. Its OrthoBlast(R) II, DynaGraft(R) II, and Accell(R) DBM 100 product lines are well-recognized and accepted in the orthopaedic community. ISOTIS contributes its innovative synthetic bone graft substitute OsSatura(TM), its family of other small medical devices, and its promising PolyActive(TM) BCP program, which constitutes a potential breakthrough in the treatment of osteochondral defects. In the first half year of 2003, OsSatura(TM) received both the CE mark (on the claim of osteoconductivity and osteoinductivity) and FDA 510(k) approval (on the claim of osteoconductivity) in quick succession. Business Strategy & Key Forward Market Drivers ISOTIS Orthobiologics becomes a company with immediate and substantial critical mass in the fast growing field of orthobiologics. Its goal, based on sales growth and improving margins, is to enter the top tier of the global orthobiology industry. Management identified the following drivers for growing sales and improving margins: Leverage existing US distribution channel ISOTIS intends to fully support independent distributors and their 400 dedicated sales reps with the potential for substantially increased sales to their existing customer base by: * offering a combined "natural" and "synthetic" product mix, initially consisting of OrthoBlast(R) II, Dynagraft(R) II, Accell(R) DBM 100 and OsSatura(TM); * aggressive R&D initiatives to develop and obtain timely approvals for a series of superior new products; * having the means for a pointed ISOTIS OrthoBiologics corporate marketing campaign; * providing solid product marketing, sound scientific and clinical data to support product claims. Accelerate European and other international sales The breadth of the new ISOTIS' combined product platforms and an established European production sales and marketing infrastructure provides an opportunity to rapidly ramp up European and international sales and establish a stronghold in what remains a highly fragmented, underdeveloped marketplace. Combined new product development The merger has brought together GenSci's expertise in natural bone (demineralized bone matrix) and carrier technologies with ISOTIS' expertise in synthetic bone graft substitutes. Combining natural and synthetic technology platforms will enable the Combination to obtain approval for a number of new, superior bone graft substitute products in the course of 2004 and 2005, and launch these products through the existing distribution channels. By 2006, the Combination expects to obtain regulatory approval for its potential breakthrough solution for osteochondral defects, PolyActive(TM) BCP. Exclusive focus on orthobiology and applying a strict medical device product development approach will ensure a clearer regulatory pathway. Management Jacques R. Essinger, Ph D, Chief Executive Officer Pieter Wolters, Chief Financial Officer John F. Kay, Ph D, Chief Scientific Officer Jim Hogan, President, EMEA/Asia Pacific Board of Directors of ISOTIS OrthoBiologics James S. Trotman, Chairman Aart Brouwer, Vice-Chairman Patrick Aebischer Darrell Elliott Jacques Essinger Henjo Hielkema Daniel Kollin Corporate Headquarters: 18-20, Avenue de Sevelin 1004 Lausanne, Switzerland Phone: +41 21 620 60 00 Fax: +41 21 620 60 60 http://www.isotis.com/ European Operations: Prof. Bronkhorstlaan 10-D 3723 MB Bilthoven, The Netherlands PO Box 98, 3720 AB Bilthoven, The Netherlands Phone: +31 30 229 5 229 Fax: +31 30 228 0 255 North American Operations: 2, Goodyear Irvine, CA 92618 Phone: 949 595 8710 Fax: 949 595 8711 Website: http://www.isotis.com DATASOURCE: IsoTis CONTACT: Hans Herklots, media & investor relations, +31(0)30-229-5271, fax, +31(0)30-228-0255, , or Louis G. Plourde, investor/shareholder relations, +1-800-561-2955 (North America),

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