IsoTis Proposes to Become a U.S. Company With a Single NASDAQ Listing in Q1 2007 (1)

LAUSANNE, Switzerland and IRVINE, Cailfornia, November 6 /PRNewswire/ -- ISOTIS S.A. ("IsoTis" or the "Company"), the orthobiologics company whose shares are currently listed on SWX Swiss Exchange (ISON), Euronext Amsterdam (ISON) and the Toronto Stock Exchange (ISO), today announced its intention to become a U.S. company with a single listing on the NASDAQ Global Market during the first quarter of 2007, with the purpose of enabling additional growth and facilitating a fair market valuation to its shareholders.

Pieter Wolters, President and CEO of IsoTis said: "We have always been clear on the logic to streamline our stock market listings and become a U.S. listed company: it is a natural next step after the streamlining of IsoTis organization, product offering and technology pipeline that we executed in the last years. We believe the benefits of a single listing are obvious and that our growth momentum - 8 quarters of strong revenue growth - and our cash position provide a sound basis for simplifying our capital structure. A more straightforward capital structure is an important condition to further accelerate our growth. With over 90% of our employees and over 75% of our revenues in the U.S., a NASDAQ listing alongside our peers provides a natural market for our shares. We believe that many shareholders share our vision and are confident that the required majority of 67% will accept the exchange offer to benefit from an enhanced value proposition."

IsoTis believes that becoming a U.S. company listed on NASDAQ is the next logical step in its continued progression and expects that this transaction will enable additional growth and should provide additional benefits to stockholders by:

-- Increasing visibility to institutional investors. IsoTis' peer companies trade on U.S. stock markets and not on any of the international exchanges where IsoTis shares currently trade. A NASDAQ listing among peer companies should assist investors in evaluating IsoTis by providing direct, easily accessible comparables. The improved visibility offered by a U.S. listing should help to increase U.S. analyst coverage, and thereby bring the Company's valuation more in line with that of its peers. IsoTis also believes that a listing on NASDAQ will lead to improved access to U.S. institutional investors focused on medical device and growth companies, who may be prohibited from investing in IsoTis as a non-U.S. listed stock.

-- A single U.S. exchange, more liquidity, less complexity. IsoTis' shares currently trade on SWX Swiss Exchange, Euronext Amsterdam and the Toronto Stock Exchange. IsoTis believes that a single listing will enable investors to obtain accurate and reliable information regarding company performance and relative valuation. Additionally, IsoTis believes that consolidating its existing listings onto a single exchange, in particular the NASDAQ Global Market, where numerous life sciences companies are listed, will increase the liquidity of IsoTis shares, which should be beneficial for IsoTis shareholders. Lastly, IsoTis believes that listing on a single stock exchange will reduce the complexity of the Company's current legal and securities compliance requirements and reduce its related expenses.

-- Facilitating access to capital markets. IsoTis believes that by establishing a presence on NASDAQ, increasing the Company's visibility to investors and analysts and increasing the liquidity of the Company's shares, the Company will be positioning itself to have better access to the global capital markets. Improved access to capital markets should, in turn, enable additional growth in the Company by facilitating the Company's ability to raise additional capital through the issuance of stock or the Company's ability to acquire or invest in complementary technologies or products using its stock.

-- Aligning stock exchange listing with primary market and primary location of operations. IsoTis believes that by becoming a U.S. company with a NASDAQ listing, it will demonstrate its commitment to the U.S. orthopedics market, the largest single orthopedic market in the world, its U.S. customers and its U.S. staff. At the same time IsoTis will continue to serve its fast growing contingent of international customers through its Swiss sales and marketing organization out of Lausanne and from its headquarters in Irvine, CA.

In order to become a U.S. company listed on NASDAQ, IsoTis has formed a new U.S. company, IsoTis Inc., which is a wholly-owned subsidiary of IsoTis. IsoTis Inc. intends to make a public offer to all IsoTis shareholders within six weeks from the date of this publication to exchange their current IsoTis shares for shares of IsoTis Inc. on a 10 (IsoTis shares with a nominal value of CHF 1.00) for 1 (IsoTis Inc. share with a nominal value of USD 0.0001) basis. Fractional entitlements to IsoTis Inc. shares resulting from the exchange ratio will be compensated in cash by IsoTis Inc. at CHF 1.5667 (respectively EUR 0.9849 and CAD 1.4266) per corresponding IsoTis share, which amount corresponds to the 30 days' average opening price for IsoTis shares on the SWX Swiss Exchange during the 30 trading days preceding the date of this press release. IsoTis Inc. intends to apply to list its shares on the NASDAQ Global Market concurrently with the closing of the intended exchange offer. When made, the exchange offer by IsoTis Inc. will be subject to certain customary conditions, including the condition that at least 67% of all issued and outstanding IsoTis shares (on a fully diluted basis) be tendered and that the IsoTis Inc. shares be approved for listing on NASDAQ. Today, IsoTis published a pre-announcement including additional details regarding the expected exchange offer in accordance with Swiss law. A copy of the pre-announcement is posted on the Company's website under: http:\\investors.isotis.com. Swiss law provides that, as a consequence of the publication of the pre-announcement, the exchange offer will have to be launched within six weeks (or later if an extension has been granted by the Swiss Takeover Board in this respect).

Intended Timeline

1) Within six weeks from the date of this announcement, presumably on or about 15 December 2006: - launch of the exchange offer and publication of the offer memorandum containing the terms of the exchange offer;

2) On or about January 10, 2007: shareholder information meetings in the Netherlands and Switzerland;

3) First quarter 2007: settlement of the exchange offer and NASDAQ listing of IsoTis Inc. shares; NASDAQ trading begins.

Assuming the exchange offer is successful and the IsoTis Inc. shares are approved for listing on NASDAQ, IsoTis intends to take the necessary steps to delist IsoTis SA shares from each of the non-U.S. stock exchanges as soon as possible thereafter. Subsequently, all trading of IsoTis' equity will occur through the listing of IsoTis Inc. on NASDAQ.

Conference call

At 4:30 p.m. CET today, November 6 (10:30 a.m. ET, 7:30 a.m. PT) the Company will host a conference call to discuss the intended exchange offer. Dial: +41-91-610-5609 (Europe); +44-20-7107-0613 (UK); +1-866-865-5144 (toll free dial in U.S./Canada); no password required. Digital playback is available for 24 hours after the conference starting at 6:30 p.m. until November 7, 2006, 7 p.m. CET, dial: +41-91 612-4330 (Europe); +44-20-7108-6233 (UK); +1-866-416-2558 (U.S./Canada); playback ID: 711#. The call will also be webcast live on the IsoTis website at www.isotis.com. The webcast will remain available on IsoTis' website through February 28, 2007.

Other documents on www.isotis.com - investor center - exchange offer

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