NuVasive Investor Relations

NuVasive is a world leader in minimally invasive, procedurally integrated spine solutions. From complex spinal deformity to degenerative spinal conditions, NuVasive is transforming spine surgery with innovative technologies designed to deliver reproducible and clinically proven surgical outcomes.

Press Release

NuVasive Reports Second Quarter 2007 Revenue Of $35.6 Million

- Increases 2007 Revenue and GAAP EPS Guidance -

Second Quarter 2007 Highlights:

* Total revenues increased to $35.6 million; up 56.7% from the second quarter of 2006

* Gross profit increased to $28.9 million; up 63.9% from the second quarter of 2006

* Gross margin was 81.2%; up 360 basis points from the second quarter of 2006

* GAAP loss per share for the quarter was $(0.10); non-GAAP earnings per share was $0.01

* Vertical integration was 47%; up from 45% at March 31, 2007; approximately 50 new accounts were added in the quarter

* NeoDisc(TM) clinical trial continues to progress with enrollment over 40%

SAN DIEGO, July 25 /PRNewswire-FirstCall/ -- NuVasive, Inc. (Nasdaq: NUVA), a medical device company focused on developing products for minimally disruptive surgical treatments for the spine, announced today financial results for the quarter ended June 30, 2007.

The Company reported second quarter revenues of $35.6 million, a 56.7% increase over the $22.7 million for the second quarter of 2006 and a 7.2% increase over the $33.2 million for the first quarter of 2007.

Gross profit for the second quarter of 2007 was $28.9 million and gross margin was 81.2%, compared to a gross profit of $17.6 million and a gross margin of 77.6% in the second quarter of 2006. For the first quarter of 2007, gross profit was $27.5 million and gross margin was 82.8%.

Total operating expenses for the second quarter of 2007 were $34.0 million, compared with $37.9 million (or $27.4 million, excluding a charge of $10.5 million for the NeoDisc buyout) in the second quarter of 2006 and $33.8 million in the first quarter of 2007. Operating expenses for the second quarter of 2007 included (i) costs associated with continued investment in the Company's next generation MAS(TM) products, specifically those launched late in the second quarter and those scheduled for launch later in the year; (ii) costs incurred in the second quarter of 2007 related to the NeoDisc clinical trial; and (iii) additional sales costs directly associated with higher revenue.

On a GAAP basis for the second quarter of 2007, the Company reported a net loss of $3.4 million or $(0.10) per share. On a non-GAAP basis, the Company reported net income of $0.5 million or $0.01 per share. The non-GAAP earnings per share calculation in the second quarter of 2007 excludes (i) stock based

compensation of $3.5 million and (ii) amortization of acquired intangible assets of $0.4 million.

Cash, cash equivalents and short and long-term investments were $96.7 million at June 30, 2007.

Alexis V. Lukianov, Chairman and Chief Executive Officer, said, "Our strong second quarter results demonstrate the increasing effectiveness of our exclusive sales force and our initial success with the newly launched products. This progress on our growth strategy is demonstrated by the increasing number of vertically integrated hospitals, the revenue we derive from those hospitals, and from an increasing number of accounts. Additionally, our unique lateral access XLIF(R) technique continues rapidly to proliferate and drive our selling strategy. During the second quarter, we completed building inventory and successfully completed launches of our SpheRx(R) II pedicle screw system, XLP(TM) Lateral Plate and Formagraft(R) biologic, enhancing our potential revenue per procedure and providing for incremental revenue growth in the second half of 2007. Initial surgeon demand for these products has been strong."

Mr. Lukianov continued, "Our NeoDisc clinical trial enrollment continues to progress on schedule. In the second half of 2007, we will increase our investment in our NeoDisc clinical study and the next generation NeuroVision(R) system, which we believe will protect and expand our position as a leader in spine technology."

NuVasive announced increased full year 2007 financial guidance as follows:

Revenue: $143 to $146 million, up from $139 to $143 million
GAAP loss per share: $(0.38) to $(0.31), down from $(0.43) to $(0.36)
Non-GAAP earnings per share: $0.05 to $0.09 (unchanged)

The increase with respect to GAAP net loss primarily reflects reduced stock-based compensation.

Reconciliation of Non-GAAP Information

Management uses certain non-GAAP financial measures such as non-GAAP earnings per share and non-GAAP net loss per share, which exclude stock based compensation and charges directly related to acquisition transactions such as in-process research and development, milestone payments, amortization of the acquired technology assets and certain other non-recurring internal costs incurred as a result of the transaction. Management does not consider these costs in evaluating the continuing operations of the Company because management believes they are not indicative of the ongoing business operations. Therefore, management calculates the non-GAAP financial measures provided in this earnings release excluding these costs and uses these non- GAAP financial measures to enable it to analyze further and more consistently the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional important information to enable them to assess, in a way management assesses, the Company's current and future continuing operations. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

    Reconciliation of Second Quarter 2007 Results
    (in thousands, except per share amounts)

    GAAP net loss (A)                                              $ (3,416)
     Stock based compensation (B)                                     3,469
     Amortization of acquired intangible assets (C)                     397
    Non-GAAP earnings (A)                                          $    450

    GAAP net loss per share (A)                                    $  (0.10)
     Stock based compensation (B)                                      0.10
     Amortization of acquired intangible assets (C)                    0.01
    Non-GAAP earnings per share (A)                                $   0.01
     Shares used in computing GAAP net loss per
      share (A)                                                      34,654
     Shares used in computing non-GAAP earnings per
      share (A)                                                      36,110

    Reconciliation of Full Year 2007 Guidance
    (in thousands, except per share amounts)

                                                       Range for Year Ending
                                                          December 31, 2007
                                                          Low           High

    GAAP net loss per share (A)                        $ (0.38)      $ (0.31)
     Stock based compensation (B)                         0.39          0.36
     Amortization of acquired intangible
      assets (C)                                          0.04          0.04
    Non-GAAP earnings per share (A)                    $  0.05       $  0.09
    Shares used in computing GAAP net
     loss per share (A)                                 34,756        34,756
    Share used in computing non-GAAP
     earnings per share (A)                             36,256        36,256

    A - GAAP net loss per share is calculated using basic weighted shares
        outstanding;  Non-GAAP earnings per share is calculated using diluted
        weighted shares outstanding,
    B - Non-cash stock-based compensation.
    C - Amortization of technology assets purchased in 2005 and 2007.

    Conference Call

NuVasive will hold a conference call today at 5:30 p.m. ET / 2:30 p.m. PT to discuss the results. The dial-in numbers are 1-877-407-4018 for domestic callers and 1-201-689-8471 for international. A live Web cast of the conference call will be available online from the investor relations page of the Company's corporate Web site at

After the live Web cast, the call will remain available on NuVasive's Web site,, through August 25, 2007. In addition, a telephonic replay of the call will be available until August 15, 2007. The replay dial-in numbers are 1-877-660-6853 for domestic callers and 1-201-612-7415 for international callers. Please use account number 3055 and conference ID number 247324.

Kevin C. O'Boyle
EVP & Chief Financial Officer
NuVasive, Inc.

Nick Laudico/ Zack Kubow
The Ruth Group
646-536-7030 / 7020

Jason Rando
The Ruth Group

About NuVasive

NuVasive is a medical device company focused on the design, development and marketing of products for the surgical treatment of spine disorders. The Company's product portfolio is focused on applications in the over $3.6 billion U.S. spine fusion market. The Company's current principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS, as well as a growing offering of cervical and motion preservation products.

The MAS platform offers advantages for both patients and surgeons such as reduced surgery and hospitalization time and faster recovery. MAS combines three categories of current product offerings: NeuroVision a proprietary software-driven nerve avoidance system; MaXcess(R) a unique split-blade design retraction system; and specialized implants, like SpheRx(R) and CoRoent(R), that collectively minimize soft tissue disruption during spine surgery while allowing maximum visualization and surgical reproducibility. NuVasive's product offering is also focused on cervical internal fixation products and its R&D pipeline emphasizes both MAS and motion preservation.

NuVasive cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive's results to differ materially from historical results or those expressed or implied by such forward-looking statements. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to: the uncertain process of seeking regulatory approval or clearance for NuVasive's products or devices, including risks that such process could be significantly delayed; the possibility that the FDA may require significant changes to NuVasive's products or clinical studies; the risk that the Company's financial projections may prove incorrect because of unexpected difficulty in generating sales or achieving anticipated profitability; the risk that products may not perform as intended and may therefore not achieve commercial success; the risk that competitors may develop superior products or may have a greater market position enabling more successful commercialization; the risk that additional clinical data may call into question the benefits of NuVasive's products to patients, hospitals and surgeons; and other risks and uncertainties more fully described in NuVasive's press releases and periodic filings with the Securities and Exchange Commission. NuVasive's public filings with the Securities and Exchange Commission are available at NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.NUVASIVE, INC.

                    (in thousands, except per share data)

                                    Three Months Ended     Six Months Ended
                                         June 30,               June 30,
                                      2007      2006         2007       2006

    Revenues                       $35,618   $22,724      $68,838    $42,409
    Cost of goods sold               6,710     5,087       12,417      8,967
    Gross profit                    28,908    17,637       56,421     33,442

    Operating expenses:
     Sales, marketing and
      administrative                28,027    22,996       56,067     44,015
     Research and development        5,925     4,448       11,677      8,438
     Development milestone
      expense                            -    10,500            -     10,500
    Total operating expenses        33,952    37,944       67,744     62,953
    Interest and other
     income, net                     1,628     1,837        3,487      2,935

    Net loss                       $(3,416) $(18,470)     $(7,836)  $(26,576)

    Net loss per share:
     Basic and diluted              $(0.10)   $(0.56)      $(0.23)    $(0.85)
     Weighted average shares
      - basic and diluted           34,654    33,113       34,485     31,394

    Stock-based compensation
     is included in operating
     expenses in the following
    Sales, marketing and
     administrative                 $2,894    $2,481       $5,522     $5,270
    Research and development           575       741        1,091      1,553
                                    $3,469    $3,222       $6,613     $6,823

                                NUVASIVE, INC.
                                (in thousands)

                                           June 30,2007      December 31, 2006
    Current assets:
     Cash and cash equivalents                $44,218            $41,476
     Short-term investments                    44,460             73,930
     Accounts receivable, net                  23,261             18,960
     Inventory, net                            26,763             18,636
     Prepaid expenses and other current
      assets                                    1,628              1,716
    Total current assets                      140,330            154,718
    Property and equipment, net of
     accumulated depreciation                  33,917             30,573
    Intangible assets, net of accumulated
     amortization                              25,335              8,441
    Long-term investments                       9,987              1,996
    Other assets                                  451                456
    Total assets                             $210,020           $196,184
    Liabilities and Stockholders' Equity
     Current liabilities:
      Accounts payable and accrued
       liabilities                            $10,694             $8,937
      Accrued payroll and related expenses      8,056              8,477
      Royalties payable                         1,424              1,068
    Total current liabilities                  20,174             18,482
    Long-term liabilities                       1,112              1,399
    Commitments and contingencies
    Stockholders' equity:
     Common stock, 70,000 shares authorized
      34,842 and 33,929 issued and
      outstanding at June 30, 2007 and
      December 31, 2006, respectively              35                 34
     Additional paid-in capital               353,311            333,009
     Accumulated other comprehensive loss         (61)               (25)
     Accumulated deficit                     (164,551)          (156,715)
    Total stockholders' equity                188,734            176,303
    Total liabilities and stockholders'
     equity                                  $210,020           $196,184

                                NUVASIVE, INC.
                                (in thousands)

                                                   Six Months Ended June 30,
                                                        2007         2006
    Operating activities:
    Net loss                                         $(7,836)     $(26,576)
     Adjustments to reconcile net loss to net
      cash used in operating activities:
     Depreciation and amortization                     5,933         3,545
     Stock-based compensation                          6,613         6,823
    Write-off of inventory in connection with
      planned 2006 product introductions and
      enhancements                                         -           343
     Other non-cash adjustments                        1,179           930
     Changes in operating assets and
       Accounts receivable                            (4,621)       (2,157)
       Inventory                                      (8,868)       (5,333)
       Prepaid expenses and other current assets         (39)         (819)
       Accounts payable and accrued liabilities        1,926         3,158
       Accrued payroll and related expenses             (421)         (307)
       Development milestone payable                       -        10,500
     Net cash used in operating activities            (6,134)       (9,893)

    Investing activities:
    Cash paid for acquisition of Radius
     Medical LLC                                      (6,970)            -
    Investment in Maxigen Biotech, Inc.               (2,000)            -
    Purchases of property and equipment               (8,527)       (8,561)
    Sales of short-term investments                   79,050        10,950
    Purchases of short-term investments              (49,580)      (45,455)
    Sales of long-term investments                     6,000             -
    Purchases of long-term investments               (11,991)            -
    Other assets                                           5          (291)
    Net cash provided by (used in) investing
     activities                                        5,987       (43,357)

    Financing activities:
    Payment of long-term liabilities                    (300)         (300)
    Issuance of common stock, including net
     proceeds from secondary offering                  3,189       143,065
    Net cash provided by financing activities          2,889       142,765
    Increase in cash and cash equivalents              2,742        89,515
    Cash and cash equivalents at beginning of
     period                                           41,476        12,545
    Cash and cash equivalents at end of
     period                                          $44,218      $102,060

SOURCE NuVasive, Inc.
CONTACT: Kevin C. O'Boyle, EVP & Chief Financial Officer of NuVasive,
Inc.,; or Investors, Nick Laudico,
+1-646-536-7030,, or Zack Kubow, +1-646-536-7020,, Media, Jason Rando, +1-646-536-7025,, all of The Ruth Group, for NuVasive, Inc.
Web site: