TRANSCRIPT

Presentation

Operator

Greetings ladies and gentlemen and welcome to the Invasive Incorporated fourth quarter 2007 and year end earnings. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions) As a reminder this conference is being recorded. It’s now my pleasure to introduce your host Mr. [Nick LDC] of the [inaudible] group. Thank you Mr. LDC you may begin.

[Nick LDC]

Welcome to the NuVasive fourth quarter earnings conference call. NuVasive senior management joining us on the call today will be Alex Lukianov, Chairman and Chief Executive Officer; Keith Valentine, President and Chief Operating Officer and Kevin O’Boyle, Executive Vice President and Chief Financial Officer. NuVasive cautions you that statements including in this conference call 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. 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 product or devices including risks that such process could be significantly delayed, the uncertain process of administering a clinical trial such as that under way for NeoDisc, including the risk that the trial is delayed or products produces data suggesting that the device is not sufficiently safe or effective. The possibility that the FDA may require significant changes to NuVasive’s products or clinical study’s, the risk that products may not perform as intended and may therefore not achieve commercial success, 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 competitors may develop superior products or may have a greater market position enabling more successfully commercialization, the risks that initial clinical data may call in to question the benefits of NuVasive’s products to patients, hospitals, surgeons and other risks and uncertainties more fully described in NuVasive’s press releases and periodic filings with the Securities & Exchange Commission. NuVasive’s public filings with the SEC are available at web. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made. With that I’d like to turn the call over to Alex Lukianov.

Alexis V. Lukianov

Thank you everyone for joining us this afternoon for our fourth quarter and year end 2007 call. During 2007 we accomplished a number of strategic milestones that drove our financial and market penetration success. Our exclusive sales force made progress with product penetration while at the same time winning new accounts in new geographies. We introduced several new products that meaningfully expanded our product breadth in the lumbar, thoracic and cervical areas of the spine. We continue to train surgeons on our unique XLIF procedure while expanding its clinical applications and we made progress on our motion preservation strategy with further enrollment in our NeoDisc pivotal trial and obtaining CE Mark for European distribution.

Before outlining our operation progress during the quarter let me take a moment to briefly review our strong financial performance in the fourth quarter and full year 2007. Revenue in the quarter increased 54% year-over-year to $47 million. On a sequential basis this represents a 22% quarterly increase. Full year 2007 revenue increased 57% to $154.3 million while delivering $0.11 of non-GAAP profitability. NuVasive has become a competitive force in the [Euless] spine market. We have developed the sales force, product breadth, differentiation, pipeline, reputation for strong service and market awareness that we believe will propel us to approximately 5% market share in 2008.

Let me take a few moments to outline what we accomplished and add some perspective on how we plan to reach $500 million in revenue over the next several years while advancing our culture of absolute responsiveness at cheetah speed and being easy to do biz, in other words being the easiest spine company to do business with. Our exclusive sales force ended the year at 230 people which was in line with our yearly guidance of growing the group by 10 to 15%. This dedicated team has driven our market share gains in two important ways: deeper NuVasive product penetration and developing a presence in new US geographies while delivering strong service to our customers. To drive our penetration further we have expanded the US market from five regions to 11, each led by a sales director thus allowing a greater focus across the US market and creating greater career growth opportunities for our sales force. This strategy allows us to drive deeper penetration per account and improve responsiveness to the development of new business in each area. Because our proven approach to growing our markets is time consuming we expect many of our real line territories to ramp up over the next few quarters as we grow beyond the initial key account phase. As a result we expect revenue growth in the first quarter of 2008 to be marginal as the sales directors acclimate to the new geographic break outs, target accounts and work to back fill their own positions with new area business managers and spine specialists to support our expansion. We believe this transition positions us solidly on track to achieve revenue and profitability guidance in 2008. Our experienced sales professionals continue to educate surgeon customers on how to incorporate the entire suite of NuVasive products into their practices across the lumbar, cervical and thoracic regions of the spine creating smaller geographic footprints in each division while growing our total sales force, once again, by approximately 15% annually will service to seed and expand our coverage where we historically have under penetrated or not even had a presence.