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    Unassociated Document

      Via
Edgar

      December
7, 2010

      Jeffrey
Riedler, Assistant Director

      Securities
and Exchange Commission

      100 F
Street, N.E.

      Washington
D.C. 20549

                Re:

                Bacterin
      International Holdings, Inc.

      Registration Statement on Form
S-1

      Filed September 23, 2010

      File No. 333-169620

      Form 10-K

      Filed March 30, 2010

      File No. 333-158426

      Dear Mr.
Riedler:

      This letter is in response to your
comment letter dated October 26, 2010 to our Registration Statement on Form S-1
filed September 28, 2010 (“Registration Statement”) and our Form 10-K filed on
March 30, 2010.  For your convenience, your questions and comments are
restated below in italics, followed by our response.  The numbering
corresponds with the comments in your letter.

      We have concurrently filed via Edgar
Amendment No. 1 to our Registration Statement, which includes revisions to our
Registration Statement based on your comment letter, as well as other updated
information.

      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
applicable to portions of the filing that we have not cited as examples, please
make the appropriate changes in accordance with our comments.

      Response:
Comment Noted.

      Cover
Page

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

      Response:
We have revised our cover page to state our current outside counsel’s contact
information.

      Bacterin International
Holdings, Inc., page 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 emerging into a leader in the field of
biomaterials research, device development and commercialization,” in this
section and elsewhere as applicable.  Alternatively, provide us with
the information justifying the characterization of your company as an emerging
leader.

      Response:
We have deleted the word “leader” throughout our registration
statement.

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

                ·

                “Our proprietary methods
      optimize the growth factors in human allografts to create the ideal stem
      cell scaffold and promote bone and other tissue
      growth;”

                ·

                “Such coatings contain active
      agents and provide our products with several potential advantages oer
      traditional medical devices.  They offer a means of protecting
      the surface of a medical device from contamination by pathogenic
      organisms, thereby minimizing the potential for infection;”
      and

                ·

                “Other coatings can serve as a
      reserve for local delivery of active agents, enhancing a variety of
      biological functions such as bone growth and pain
      management.”

      Alternatively,
delete these statements from this section and elsewhere as
applicable.

      Response:
We have deleted the statements indicated in Comment 4.

      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 shares (including 3,751,621 shares issuable upon the exercise of
warrants) were placed with the selling stockholders.

      Response:
We have revised our disclosure to clarify when, and in what transactions, the
shares being registered were placed with the selling stockholders.  We
have also revised the number of shares being registered to 11,250,597 (including
4,126,630 shares issuable upon the exercise of warrants).

      Risk
Factors

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

      6.           To
the extent 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 technical personnel
have plans to leave your company in the near future, please revise the
discussion to disclose this information.

      Response:
We have not had any specific problems engaging and retaining qualified technical
personnel.  This risk factor is included as a general risk factor for
our industry and is not related to any specific incidence that we have recently
experienced. Also, we are not aware of any key technical personnel who have
plans to leave our company in the near future.

      Loss of key member of our
management who we need to succeed….. page 5

      7.           To
the extent that you have experienced problems attracting and retaining qualified
key members of your management team in the recent past, please revise your
disclosure to describe these problems.  Additionally, if any key
member of your management team has plans to leave your company in the near
future, please revise the discussion to disclose this information.

      Response:
We have not experienced problems attracting and retaining qualified key members
of our management team in the recent past.  Also, we are not aware of
any key member of management who plans to leave our company in the near
future.

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

      8.           Please
disclose your level of business interruption insurance coverage and the cost to
you of such coverage, if material.

      Response:
We carry $1 million of business interruption insurance per location as part of
an overall multi-peril policy, and we have added the disclosure to this risk
factor.

      We will be required to
invest in facilities and equipment….. page 6

      9.           To
the extent practicable, please provide the amounts, in this risk factor, that
you have currently budgeted or anticipate spending to increase, expand 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 section entitled “Cash Requirements” in your Management’s Discussion and
Analysis.

      Response:
We anticipate that we will need to spend $4 to $5 million over the next five
years in order to increase, expand or update our existing facilities to meet our
expected growth over that period.  We have not yet identified sources
of funding for this increase, expansion or update.  However, we have
revised our risk factor to include the anticipated amounts, and we have
addressed this comment in more detail in the section entitled “Cash
Requirements” in our 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 initiative to build and further expand
your direct sales force and that this effort will have significant
costs.  Please expand your disclosure in this risk factor to quantify,
to the extent practicable, 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 Management’s Discussion and
Analysis.

      Response:
We have expanded our disclosure in this risk factor to quantify, to the extent
practicable, the amount of funds we will need to build and further expand our
direct sales force.  More specifically, we incurred sales and
marketing expense of approximately $8 million for 2010.  We have also
quantified our funding requirements and sources of funding in greater detail in
the section entitled “Cash Requirements” in our Management’s Discussion and
Analysis.

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

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

      Response:
We have not yet experienced payment problems that we would consider material;
however, the industry generally has a slow payment process, which affects our
ability to receive prompt payment.  In general, we are paid by
hospitals, which in turn seek reimbursement from patients, their insurance
companies, Medicare and Medicaid.  We did revise this risk factor
slightly to clarify that the third party reimbursement mentioned in this risk
factor is paid to hospitals, not to the Company.

      We may be subject to future
product liability litigation….. page 7

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

      Response:
We currently carry product liability insurance of up to $10 million at an annual
premium cost of approximately $140,000, and we have revised this risk factor to
include these amounts.

      13.           Please
disclose the level of reserves you maintain for product liability
disbursements.

      Response:
We do not currently maintain any reserves for product liability disbursements,
and we have revised this risk factor to state that “our insurance coverage and
any reserves we may maintain in the future . . . may not be
adequate.”  As noted in the response to comment 12 above, we also
added the details of our insurance coverage related to this risk
factor.

      We may not be able to obtain
or protect our proprietary rights….. page 10

      14.           We
note in your “Legal proceedings” section that you have served complaints to
Allosource and Advanced Biologics, Inc.  Please discuss these claims
and potential consequences in this risk factor discussion.

      Response:
In response to your request, we have expanded this risk factor to include a
discussion of the Allosource and Advanced Biologics claims, including potential
consequences.

      If we do not timely file and
have declared effective the registration 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 this
registration statement declared effective.

      Response:
We agreed to file this registration statement by September 28, 2010 and if it is
not effective by December 27, 2010, we are obligated to pay 1% of the aggregate
investment amount per month, subject to a maximum limit of 12% of the aggregate
investment amount.  We added the dates to this risk factor in response
to your comment.

      Management’s Discussion and
Analysis of Financial 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 the six months ended June 30, 2009 to 48%
during the six months ended December 31, 2009, then decreased 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.

      Response:
We have modified our discussion in response to your comment.

      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 identifies 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 day on which the contract terminates.  Also, please file the
contract 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.

      Response:
We have revised our disclosure to disclose the names of the customers described
in this comment.  However, upon further review, we discovered that the
contracts with these customers were terminated in the third quarter of 2009 when
the Company migrated to a direct sales model from a distributor based
model.  We revised our disclosure accordingly; however, since we no
longer have contracts with these customers, we did not add this discussion to
the Business section and have not attached the contracts as
exhibits.

      Business, page
23

      Overview of Our Business,
page 23

      18.           We
note that you will continue to use the proceeds 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 allocate to each.  Also, with respect to expanding your
production capacity, please clarify whether you intend to use funds to open new
facilities, increase the capacity of your current 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
indicate where you expect to open new facilities.

      Response:
We have revised our disclosure to disclose amounts incurred for expansion of our
direct sales force and amounts we anticipate that we will need to increase,
expand or update our existing facilities over the next five
years.  Also, in response to the first part of your comment, we have
deleted “and our production capacity” from the sentence regarding the use of
funds from our bridge financing and private placement.

      19.           Please
provide the basis for your statement that the Center for Biofilm Engineering at
Montana State is “internationally acclaimed.”

      Response:
We have deleted this statement in response to your comment.

      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 manufactured by you under
your own label and contract revenue from analytical testing and development
services provided to medical device manufacturer clients, which tailor your
coating process to the client’s specific product/medical
application.  Please 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 agreements or
contracts including the obligations of the parties, term and termination,
royalty rate and any other material provisions of the agreements or