REDMOND, Wash. - July 31, 2003 - Archus Orthopedics, Inc., the developer of a novel, reconstructive implant to treat degenerative diseases of the lumbar spine, today announced it has secured $18 Million in a Series B financing co-led by InterWest Partners and Polaris Venture Partners. MPM Capital, which led the company's Series A financing, also participated in the round. Proceeds from the financing will be used to complete product development and initiate U.S. clinical trials of the device.

Treatments for degenerative spine disease represent the fastest growing segment of the orthopedic market. Each year in the United States nearly 500,000 patients undergo a surgical intervention to address their low back condition. Many of these procedures include fusion of one vertebra to another to stabilize the spine or eliminate motion that produces pain. Often ineffective, fusion alters the normal biomechanics of the spine, which can create new problems at adjacent vertebral segments, often requiring re-operation.

Archus Orthopedics is developing the Total Facet Arthroplasty System ("TFAS") to treat a variety of spine disorders resulting from degenerative changes in the facet joints. The initial clinical trial of the device will focus on spinal stenosis, a condition in which these degenerative changes result in compression of spinal nerves producing neurological symptoms in the legs. Traditionally, patients with spinal stenosis undergo decompressive laminectomy surgery, which is often accompanied by spine fusion. The TFAS replaces the degenerative facet joints with a prosthetic joint implant that restores stability and normal motion to the spine, eliminating the need for fusion.

"Forty years ago we used to fuse hips," observed Mark Reiley, M.D., inventor of the TFAS. "Most experts agree that motion-preserving reconstruction of the degenerative spine is superior to fusion and will be the standard of care in the future," he added.

Commenting on the financing, Jim Fitzsimmons, chairman and chief executive officer said "We are delighted to have the backing and support of such a strong and seasoned group of investors. The Company now has sufficient capital to make substantial forward progress with this important new technology."

Discussing their investment in Archus, Gil Kliman, general partner at InterWest Partners said "We are very excited about the Company, its breakthrough technology and strong management team, and are proud to make Archus the newest addition to a series of InterWest orthopedic device investments."

Brian Chee, general partner at Polaris added "With favorable patient demographics and the emergence of exciting new treatment approaches, the spine market is an extremely attractive investment space."

Kurt Wheeler, general partner at MPM Capital concurred, noting "Archus is clearly on the leading edge of a new era in spine care."