Anika Therapeutics Reports Robust Financial Performance and Continued Progress on Key Fronts in Third Quarter of 2015
Company Achieves 37.5% Year-over-Year Diluted EPS Growth in Quarter

BEDFORD, Mass.--(BUSINESS WIRE)-- Anika Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated orthopedics medicines company specializing in therapeutics based on its proprietary hyaluronic acid ("HA") technology, today reported financial results for the third quarter ended September 30, 2015, along with business progress in the period.

"Our third quarter sales and profits were driven by strength in end-user demand, which together with continuing pipeline progress, provides a robust foundation for future growth," stated Charles H. Sherwood, Ph.D., President and Chief Executive Officer. "Our viscosupplementation portfolio, anchored by ORTHOVISC® and MONOVISC®, continues to grow and is poised to take and hold greater leadership in the market. We believe this strong positioning, along with our steady pipeline progress during the quarter, sets our company up to deliver financial results and shareholder value for the long term."

Third Quarter Financial Results

  • Product revenue grew 8% in the third quarter of 2015.
  • ORTHOVISC and MONOVISC continued to command a strong position in the market, with a combined share that grew modestly to 27% of the U.S. viscosupplementation market at the end of the third quarter. ORTHOVISC continues to maintain its market-leading position in the multi-injection segment. MONOVISC holds the number two position in the single-injection segment.
  • Total revenue for the third quarter of 2015 was $23.7 million, compared with $22.1 million in the third quarter of 2014. The increase was primarily driven by the continued growth in MONOVISC adoption in the U.S.
  • Total operating expenses for the third quarter of 2015 were $10.5 million, compared with $11.8 million in the third quarter of 2014. The decrease was primarily driven by lower cost of goods sold as a result of favorable revenue mix, the full amortization of certain intangible assets at the end of 2014, and certain employee termination-related expenses in the third quarter of 2014.
  • Net income for the third quarter was $8.4 million, or $0.55 per diluted share, compared with $6.2 million, or $0.40 per diluted share, for the third quarter of 2014.

Recent Business Highlights

During the quarter, the Company continued making pipeline and operational progress, including, as follows:

  • A formal meeting with the FDA's Office of Combination Products to discuss a planned application to request a device designation for CINGAL, followed by a formal written request for designation. A decision from the FDA is expected by the end of the year.
  • The buildout of additional manufacturing space in, and the movement of the Company's Italian manufacturing facilities to, Anika's Bedford, Mass. global headquarters. This initiative is intended to consolidate production for all the Company's products, and to accelerate product development.
  • The signing of a lease agreement by Anika's wholly-owned Italian subsidiary, Anika Therapeutics S.r.l., to build office space in Padova, Italy to serve as Anika's European headquarters. This site will serve as Anika's European hub for sales, marketing, and distribution and will also house administrative and product development operations, and is intended to provide the Company with infrastructure to support future growth.

Conference Call Information

Anika management will hold a conference call and webcast to discuss its financial results, business highlights and financial outlook tomorrow, Thursday, October 29th at 9:00 am ET. The conference call can be accessed by dialing 1-855-468-0611 (toll-free domestic) or 1-484-756-4332 (international). A live audio webcast will be available in the "Investor Relations" section of Anika's website, www.anikatherapeutics.com. An accompanying slide presentation may also be accessed via the Anika website. A replay of the webcast will be available on Anika's website approximately two hours after the completion of the event.

About Anika Therapeutics, Inc.

Anika Therapeutics, Inc. (NASDAQ: ANIK) is a global, integrated orthopedic medicines company based in Bedford, Mass. Anika is committed to improving the lives of patients with degenerative orthopedic diseases and traumatic conditions by providing clinically meaningful therapeutic pain management solutions along the continuum of care, from palliative care to regenerative medicine. The Company has over two decades of expertise developing, manufacturing and commercializing more than 20 products, in markets across the globe, based on its proprietary hyaluronic acid (HA) technology. Anika's orthopedic medicine portfolio is comprised of marketed (ORTHOVISC® and MONOVISC®) and pipeline (CINGAL® and HYALOFAST® in the U.S.) products to alleviate pain and restore joint function by replenishing depleted HA and aiding cartilage repair and regeneration. For more information about Anika, please visit http://www.anikatherapeutics.com.

Forward-Looking Statements

The statements made in the second paragraph and the first bullet point in the section captioned "Recent Business Highlights," of this press release, which are not statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, those relating to the company's product pipeline and growth opportunities and its leadership position in the viscosupplementation market. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks, uncertainties, and other factors. The Company's actual results could differ materially from any anticipated future results, performance, or achievements described in the forward-looking statements as a result of a number of factors including (i) the Company's ability to successfully commence and/or complete clinical trials of its products, including for HYALOFAST or for expanded indications of the Company's MONOVISC product, on a timely basis or at all; (ii) the Company's ability to obtain pre-clinical or clinical data to support domestic and international pre-market approval applications or 510(k) applications, or to timely file and receive FDA or other regulatory approvals or clearances of its products; (iii) that such approvals will not be obtained in a timely manner or without the need for additional clinical trials, other testing or regulatory submissions, as applicable; (iv) the Company's research and product development efforts and their relative success, including whether we have any meaningful sales of any new products resulting from such efforts; (v) the cost effectiveness and efficiency of the Company's clinical studies, manufacturing operations, and production planning; (vi) the strength of the economies in which the Company operate or will be operating, as well as the political stability of any of those geographic areas; (vii) future determinations by the Company to allocate resources to products and in directions not presently contemplated; (viii) the Company's ability to successfully commercialize its products, in the U.S. and abroad; (ix) the Company's ability to provide an adequate and timely supply of its products to its customers; (x) the Company's ability to continue to successfully manage Anika Therapeutics S.r.l.'s business; and (xi) the Company's ability to achieve its growth targets.

                                       
Anika Therapeutics, Inc. and Subsidiaries  
Condensed Consolidated Statements of Operations
(unaudited)
        Three Months Ended September 30,         Nine Months Ended September 30,  
        2015       2014         2015         2014  
Product revenue       $ 23,675,696       $ 21,975,312         $ 62,088,410         $ 57,593,873  
Licensing, milestone and contract revenue         5,561         80,111           16,732           24,746,497  
Total revenue         23,681,257         22,055,423           62,105,142           82,340,370  
                                       
Operating expenses:                                      
Cost of product revenue         5,175,723         5,724,800           14,763,222           15,418,732  
Research & development         2,061,689         1,999,867           5,971,771           6,160,740  
Selling, general & administrative         3,308,731         4,044,538           10,301,886           11,401,399  
Total operating expenses         10,546,143         11,769,205           31,036,879           32,980,871  
Income from operations         13,135,114         10,286,218           31,068,263           49,359,499  
Interest income, net         33,667         9,937           81,297           16,339  
Income before income taxes         13,168,781         10,296,155           31,149,560           49,375,838  
Provision for income taxes         4,788,916         4,125,355           11,434,581           18,872,435  
Net income       $ 8,379,865       $ 6,170,800         $ 19,714,979         $ 30,503,403  
                                       
Basic net income per share:                                      
Net income       $ 0.56       $ 0.42         $ 1.32         $ 2.09  
Basic weighted average common shares outstanding         14,967,322         14,758,781           14,944,921           14,626,933  
Diluted net income per share:                                      
Net income       $ 0.55       $ 0.40         $ 1.29         $ 1.97  
Diluted weighted average common shares outstanding         15,315,808         15,434,875           15,310,758           15,469,237  
                                       

 

                 
Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
        September 30,     December 31,
ASSETS         2015         2014  
Current assets:                
Cash and cash equivalents       $ 108,469,021         $ 100,155,864  
Investments         22,007,370           6,750,000  
Accounts receivable, net of reserves of $135,618 and $146,618 at September 30, 2015 and December 31, 2014, respectively         23,375,657           17,152,028  
Inventories         12,075,157           12,406,776  
Prepaid income taxes         -           412,301  
Current portion deferred income taxes         1,409,328           1,188,768  
Prepaid expenses and other         947,119           959,305  
Total current assets         168,283,652           139,025,042  
Property and equipment, at cost         57,667,111           53,619,589  
Less: accumulated depreciation         (23,869,798 )         (21,950,706 )
          33,797,313           31,668,883  
Long-term deposits and other         69,020           69,042  
Intangible assets, net         12,987,683           14,894,710  
Goodwill         7,713,039           8,338,699  
Total Assets       $ 222,850,707         $ 193,996,376  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
Accounts payable       $ 2,220,734         $ 1,201,226  
Accrued expenses         6,547,775           4,747,526  
Deferred revenue         33,948           24,510  
Income taxes payable         4,442,342           -  
Total current liabilities         13,244,799           5,973,262  
Other long-term liabilities         803,571           893,935  
Long-term deferred revenue         73,964           102,192  
Deferred tax liability         8,974,122           8,929,890  
Commitments and contingencies                
Stockholders' equity:                
Preferred stock, $.01 par value; 1,250,000 shares authorized, no shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively         -           -  
Common stock, $.01 par value; 30,000,000 shares authorized, 15,011,512 and 14,851,703 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively         150,115           148,517  
Additional paid-in-capital         81,052,103           77,539,699  
Accumulated other comprehensive loss        

(6,066,627

 )         (4,494,800 )
Retained earnings        

124,618,660

           104,903,681  
Total stockholders' equity         199,754,251           178,097,097  
Total Liabilities and Stockholders' Equity       $ 222,850,707         $ 193,996,376  

 

                                                 
Anika Therapeutics, Inc. and Subsidiaries
Supplemental Financial Data
                                                 
                                                 
Revenue by Product Line and Product Gross Margin
(unaudited)
                                                 
     

 

Quarter Ended September 30,

 

Nine Months Ended September 30,
     

 

  

2015

       %      

 

  

2014

       %      

2015

       %  

 

      

2014

   %  
Orthobiologics       $ 20,461,181       86 %       $ 18,899,873       86 %   $ 51,716,600       83 %       $ 48,750,277   85 %
Dermal         412,357       2 %         401,355       2 %     1,131,657       2 %         938,966   1 %
Surgical         1,413,039       6 %         1,452,946       6 %     4,449,639       7 %         4,581,496   8 %
Ophthalmic         344,119       1 %         366,138       2 %     1,263,582       2 %         938,134   2 %
Veterinary         1,045,000       5 %         855,000       4 %     3,526,932       6 %         2,385,000   4 %
Total Product Revenue       $ 23,675,696       100 %       $ 21,975,312       100 %   $ 62,088,410       100 %       $ 57,593,873   100 %
                                                 
                                                 
Product gross profit       $ 18,499,973               $ 16,250,512           $ 47,325,188               $ 42,175,141    
Product gross margin         78 %               74 %           76 %               73 %  
                                                 
                                                 
Total Product Revenue by Geographic Region
(unaudited)
                                                 
     

 

Quarter Ended September 30,

 

Nine Months Ended September 30,
     

 

  

2015

       %           2014       %       2015       %           2014   %  
Geographic Location:                                                
United States       $ 19,239,247       81 %       $ 18,455,167       84 %   $ 51,048,132       82 %       $ 48,282,945   84 %
Europe         1,976,751       8 %         1,784,414       8 %     6,293,965       10 %         5,267,317   9 %
Other         2,459,698       11 %         1,735,731       8 %     4,746,313       8 %         4,043,611   7 %
Total Revenue       $ 23,675,696       100 %       $ 21,975,312       100 %   $ 62,088,410       100 %       $ 57,593,873   100 %

 

Anika Therapeutics, Inc.
Christopher Ranjitkar, 781-457-9000
IR & Corporate Communications Manager

 

Source: Anika Therapeutics, Inc.

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