SecProbe.io

October 26, 2010

John P. Gandolfo
Chief Financial Officer
600 Cruiser Lane
Belgrade, Montana 59714

Re:  Bacterin International Holdings, Inc.
Registration Statement on Form S-1
Filed September 28, 2010
 File No. 333-169620  Form 10-K Filed March 30, 2010 File No. 333-158426
Dear Mr. Gandolfo:
We have reviewed your registration stat ement on Form S-1 filed on September 28, 2010
and your Form 10-K filed on March 30, 2010 and have the following comments.  In some of our comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter by amending your registration statement and providing the
requested information.  If you do not believe  our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.
 General

1. Please note that where we provide examples to illustrate what we mean by our comments, they are examples and not complete lists.  If  our comments are appli cable to portions of
the filing that we have not cited as examples, please make the appropriate changes in
accordance with our comments.

Cover Page

2. We note that Greenberg Traurig, LLP is no l onger the company’s outside counsel.  Please
revise the cover page of your filing to st ate your current outside counsel’s contact
information.

Bacterin International Holdings, Inc., pages 1

3. Please delete the word “leader” from your statement, “We develop, manufacture and
market biologics products to domestic and international markets through our biologics
division and believe we are emer ging into a leader in the fi eld of biomater ials research,
device development and commercialization,” in th is section and elsewhere as applicable.
Alternatively, provide us with  the information justifying the characterization of your
company as an emerging leader.

4. Please disclose the reasonable basis for the ch aracterization of your products as set forth
in the following statements:

•  “Our proprietary methods optimize the gr owth factors in human allografts to
create the ideal stem cell scaffold a nd promote bone and other tissue growth;”
• “Such coatings contain active agents and provide our products with several
potential advantages over traditional medical devices.  They offer a means of
protecting the surface of a medical de vice from contamination by pathogenic
organisms, thereby minimizing th e potential for infection;” and
• “Other coatings can serve as a reserve for local delivery of active agents,
enhancing a variety of biological func tions such as bone growth and pain
management.”

Alternatively, delete these statements from this section and elsewhere as applicable.
 Recent Developments, page 1

5. We note that the private placements through which the selling stockholders acquired the
shares being registered are described on page 2 of the filing; however, it does not appear that the share amounts mentioned add up to the amount being registered through this
registration statement.  Please revise your disclosure to clarify when, and in what
transactions, the entirety of the 11,352,479 sh ares (including 3,751,621 shares issuable
upon the exercise of warrants) were placed with the selling stockholders.

Risk Factors

Our success will depend on our ability to engage and retain …, page 5

6. To the extent that you have experienced problems engaging and retaining qualified
technical personnel in the recent past, please revise your disclosure to describe these
problems.  Additionally, if any key technica l personnel have plans to leave your company
in the near future, please revise the di scussion to disclose this information.
 Loss of key member of our management who we need to succeed…, page 5

7. To the extent that you have experienced pr oblems attracting and re taining qualified key
members of your management team in the r ecent past, please revise your disclosure to
describe these problems.  Additionally, if a ny key member of your management team has

plans to leave your company in the near futu re, please revise the discussion to disclose
this information.

We are highly dependent on the continued availability of our facilities…, page 5

8. Please disclose your level of business interrup tion insurance coverage and the cost to you
of such coverage, if material.
 We will be required to invest in facilities and equipment…, page 6

9. To the extent practicable, pleas e provide the amounts, in this  risk factor, that you have
currently budgeted or an ticipate spending to increase, expa nd or update your  capabilities
and facilities during the next  five years and the extent to which you have identified
sources of funding for this increase, expansion or update.  In addition, please address this
comment in more detail in the sectio n entitled “Cash Requirements” in your
Management’s Discussion and Analysis.
Future revenue will depend on our ability to develop new sales channels…, page 6

10. We note that you are engaging in a major in itiative to build and further expand your
direct sales force and that th is effort will have significant costs.  Please expand your
disclosure in this risk factor  to quantify, to the extent pr acticable, the amount of funds
you will need to build and further expand your direct sales force.  In addition, please
quantify your funding requirements and sources of  funding in greater detail in the section
entitled “Cash Requirements” in your Manage ment’s Discussion and Analysis.

Our revenues will depend upon prompt and adequate reimbursement from…, page 6

11. Please disclose any problems you have e xperienced with prompt and adequate
reimbursement from public and private insure rs and national health  systems and quantify
the effects of such problems on your company, if material.

We may be subject to future pr oduct liability litigation…, page 7

12. Please disclose the level of insurance covera ge that you carry rela ting to product liability
claims and the cost to you of such coverage, if material.

13. Please disclose the level of reserves you ma intain for product liability disbursements.
 We may not be able to obtain or protect our proprietary rights…, page 10

14. We note in your “Legal Proceedings” secti on that you have served complaints to
Allosource and Advanced Biologics, Inc.  Please discuss these claims and potential
consequences in this ri sk factor discussion.

If we do not timely file and have declared effective the registrati on statement…, page 11

15. We note that you entered into a registration rights agreement where you “agreed to file
and have declared effective this registration statement by a certain date.”  Please disclose
the date that you agreed to file and have th is registration statement declared effective.

Management’s Discussion and Analysis of Financ ial Condition and Results of Operations, page
16
Comparison of Twelve Months Ended December 31, 2009 and December 31, 2008…, page 18
Revenue, page 19

16. We note that the cost of tissue sales as a percentage to the tissue sales temporarily
increased from 18% during th e six months ended June 30, 2009 to 48% during the six
months ended December 31, 2009, then decrease d to 19% during the six months ended
June 30, 2010.  Please revise your discussion to identify which product temporarily
increased demand and why.  Quantify the sales volume and revenue by product to supplement your discussion.
17. We note that your largest customer accounted for 12% and 37% of the total consolidated revenues for the years ended 2009 and 2008, respectively.  We also note that the relationship with the customer is governed by a contract, which indentifies prices for the
services to be rendered and payments to be made by the customer, that expires in February 2011.  Please disclose the name of this customer and describe, in the “Business” section, the material terms of the agreement including the pricing and payment, term and termination and any other material provisions  of the agreement.  Please note that the
termination date should also include the da y on which the contract terminates.  Also,
please file the contract as an exhibit, or alternativ ely, tell us the basis for your belief that
you are not required to file the agreement pursuant to Item 6 01(b)(10)(ii)(B) of
Regulation S-K.
 Business, page 23

Overview of Our Business, page 23

18. We note that you will continue to use the proc eeds from prior financings and the private
placements to expand your direct sales network and your production capacity.  To the extent practicable, please disclose the amount  of funds you will allo cate to each.  Also,
with respect to expanding your production ca pacity, please clarify whether you intend to
use funds to open new facilities, increase the capacity of your cu rrent facility or both.  If
you intend to increase your current capacity and open new facilities, clarify the portion of
funds you expect to allocate to each and indica te where you expect to open new facilities.

19. Please provide the basis for your statement th at the Center for Biofilm Engineering at
Montana State is “inter nationally acclaimed.”

20. We note that you generate revenue from a number of revenue sources including the
following: license fees and royalties from collaborative product development efforts,

sales from products developed and ma nufactured by you under your own label and
contract revenue from analyti cal testing and development se rvices provided to medical
device manufacturer clients, wh ich tailor your coating process to the client’s specific
product/medical application.  Pl ease disclose whether you have  entered into any license
or collaboration agreements or contracts with  respect to these revenue generating sources
and describe the material terms of these agre ements or contracts in cluding the obligations
of the parties, term and termination, royalty rate and any other material provisions of the
agreements or contracts.  Also, please file the agreements or contracts as exhibits, or
alternatively, tell us the basis for your belief that you are not required to file the
agreements or contracts pursuant to It em 601(b)(10)(ii)(B) of Regulation S-K.

 Products and Services, page 24

21. We note that your discussion on products and services distinguishes between your
Biologics Division and your Medical Device Products.  However, we also note that
products such as your OsteoSelect DBM putty ap pear in both secti ons.  Please clarify
which of your products are regulat ed as HCT and which are regul ated as medical devices.

22. We note that you are beginning trials to esta blish the ability to market OsteoSponge SC
as a cartilage re-generation scaffold, and that  you are also initiating clinical studies to
further support BacFast’s effec tiveness.  Please specify in your disclosure what you and
the FDA will have to do and, if applicable, have already done prior to  clinically testing
the products, and what you and the FDA will have to do to commercially market the
products.
23. We note that you are using part of the pro ceeds of the private placements to fund your
clinical trials for OsteoSponge SC and BacFast.  To the extent prac ticable, please disclose
the amount of funds you will allocate to the trials for each product.

24. We note that you are hoping to expand your  product definition for certain of your
products to claim cartilage regeneration capability.  We also note that 15 patients have undergone knee, foot or ankle surgery for the purposes of the trial to make such claims, and that you plan to have 200 patients in the tr ial by year end.  Lastly, we note that one of
these products is OsteoSponge SC.  Please di sclose the other products for which you are
hoping to expand your product definition to cl aim cartilage regeneration capability.
Additionally, please disclose whether you are con ducting trials for these products as well.
If you are conducting trials for your other pr oducts, please specify in your disclosure
what you and the FDA will have to do and, if applicable, have already done prior to
clinically testing the products, and what you and the FDA will have to do to commercially market the products.
25. Please provide the basis for your statement, “We believe that the ultimate size of the
market for wound drains is $80 million per year .”  Alternatively, delete these statements
from this section and elsewhere as applicable.

26. We note that in a joint development pr oject between RyMed and your company, the
InVision-Plus CS is treated with your patent ed antimicrobial technology.  We also note
that you will receive a royalty  on all devices treated for Ry Med.  Please disclose whether
you have entered into a collaboration agreemen t with RyMed and describe the material
terms of the agreement including the obligati ons of the parties, term and termination,
royalty rate and any other mate rial provisions of the agreement.  Also, please file the
agreement as an exhibit, or alternatively, tell us the basis for your belief that you are not
required to file the agreement pursuant to Item 601(b)(10)(ii)(B ) of Regulation S-K.

Technology and Intellectual Property, page 26

27. We note your table containing your patent information.  Under the section for your in-
licensed intellectual property, please disclose the expiration date for these patents and the
jurisdictions in which they were granted.
 Sales and Marketing, page 30

28. Please disclose the material terms of the cont ract with Broadlane, Inc., including the term
and termination provisions, and file the contract  as an exhibit, or alternatively, tell us the
basis for your belief that you are not require d to file the contr act pursuant to Item
601(b)(10)(ii)(B) of Regulation S-K.
 Legal Proceedings, pages 32-33

29. Please disclose the relief sought in your laws uits with Yanaki and Activatek, Allosource
and minSURG.

Potential Payments Upon terminatio n or Change-in-Control, page 40

30.  We note that you state, “Except for Mr. Gandolfo’s employment agreement described
below, we currently have no employment agreements with any of our named executive officers…”  However, on page 38 of your f iling, you state that you intend to keep the
current employment agreements between Bacterin and Guy Cook, Mitchell Godfrey,
Jesus Hernandez and Darrel Holmes, and that these employment agreements are set forth
as exhibits to the registration statement.  Pl ease revise your disclosu re to reconcile this
apparent discrepancy.
 Director Independence, page 41

31. We note your statement that during the year ended December 31, 2009, you did not have any independent directors on your board.  However, in your discussion on board
committees, for example, you list Mr. Swan son as a member of your audit and
compensation committees and state that he is an independent direct or of your company
under Nasdaq listing standards as well as unde r rules adopted by the SEC.  Mr. Swanson
was a director as of the year  ended December 31. 2009.  Please revise your disclosure to

reconcile this apparent discrepancy to explain whether you did or  did not have any
independent directors on your board during the year ended December 31, 2009.

Selling Stockholders, page 45

32. Please revise your disclosure to indicate th e nature of any position, office, or other
material relationship which the selling securi ty holders have had within the past three
years with the company or any of its predecesso rs or affiliates.  Please refer to Item 507
of Regulation S-K for guidance.

Other Rights To Acquire Our Common Stock, page 57

33. We note that you are contractually obligated to  issue shares of your common stock to one
of your stockholders.  Please disclose the name of such stockholder and file as an exhibit
the contract underlying such ob