Sales growth for 2009 was primarily attributable to increased sales from our orthobiologics products in the United States, accounting for approximately 76% of sales during the first quarter of 2009, as compared to approximately 74% in the first quarter of 2008. Sales of our VITOSSTM Bioactive FOAM products that were launched in 2008 contributed a substantial portion of overall orthobiologics product sales during the first quarter of 2009. Our biosurgery products contributed approximately 24% of product sales for the first quarter of 2009, as compared to approximately 26% of product sales during the corresponding period in 2008.
Gross profit for the quarters ended March 31, 2009 and 2008 was $14.7 million and $10.4 million, respectively. As a percentage of sales, gross profit for the first quarter of 2009 was 68%, up from 64% for the first quarter of 2008. Gross profit margin for the first quarter of 2009 increased over the prior year period primarily due to more favorable product sales mix.
Operating expenses for the quarter ended March 31, 2009 and 2008 were $15.1 million and $14.4 million, respectively, representing a 5% increase in operating expenses, as compared to a 34% increase in product sales and a 42% increase in gross profit for the quarter. The increase in operating expenses for the quarter ended March 31, 2009 was primarily due to higher selling and marketing expenses incurred in order to support the growth of U.S. product sales, and from higher research and development expenses for product development milestone payments.
The operating loss for the quarter ended March 31, 2009 decreased to $0.4 million from $4.0 million for the quarter ended March 31, 2008. The decrease in the operating loss in the 2009 period primarily resulted from increased sales and gross profit, partly offset by increased operating expenses.
“Orthovita achieved record sales in the first quarter of 2009, reflecting strong growth and further development of operating leverage ahead of a potential future launch in the U.S. of ourCORTOSSTM product candidate. We continue to be pleased with the sales growth from our specialized orthobiologics and biosurgery sales team,” said Antony Koblish, President and Chief Executive Officer of Orthovita. “We look forward to more detailed discussions during our first quarter 2009 financial results conference call.”
Cash, cash equivalents and short-term investments were $27.8 million at March 31, 2009, compared to $32.3 million at December 31, 2008. For the quarter ended March 31, 2009, the net cash used in operating activities was $2.9 million, compared to $7.1 million for the quarter ended March 31, 2008. Net cash and cash equivalents used in operating activities for the quarter ended March 31, 2009 decreased as compared with the quarter ended March 31, 2008, primarily due to a decrease in the operating loss.
Working capital was $49.1 million at March 31, 2009, compared to $52.2 million at December 31, 2008. For the quarter ended March 31, 2009, the decrease of $3.1 million in working capital was from cash used to fund operations and included $0.9 million to fund increases in inventories and $1.6 million to fund decreases in accounts payable and accrued expenses.
