Anika Therapeutics
Jul 26, 2017

Anika Reports Strong Second Quarter 2017 Financial Results

MONOVISC U.S. End-User Sales Exceeded $100 Million at an Accelerated Pace

CINGAL Phase III Clinical Trial Achieved Rapid Advancements

BEDFORD, Mass.--(BUSINESS WIRE)-- Anika Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated orthopedic medicines company specializing in therapeutics based on its proprietary hyaluronic acid ("HA") technology, today reported financial results for the second quarter ended June 30, 2017, along with business progress in the period.

"Anika delivered strong double-digit revenue and earnings growth in the second quarter of 2017, driven primarily by very robust demand for MONOVISC worldwide," said Charles H. Sherwood, Ph.D., President and Chief Executive Officer. "MONOVISC U.S. end-user revenue increased 56% year-over-year in the second quarter, and exceeded our expectations for the quarter. We also made significant progress executing our global expansion strategy, as evidenced by international Orthobiologics revenue growth of 50% year-over-year for the quarter. Additionally, CINGAL continued to gain momentum in Canada and Europe, and we made considerable progress enrolling patients in our supplemental Phase III trial of CINGAL during the quarter."

Second Quarter Financial Results

Recent Business Highlights

The Company made key commercial, operational, pipeline, and financial advancements, including:

Conference Call Information

Anika's management will hold a conference call and webcast to discuss its financial results and business highlights tomorrow, Thursday, July 27th 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, Massachusetts. Anika is committed to improving the lives of patients with degenerative orthopedic diseases and traumatic conditions with clinically meaningful therapies along the continuum of care, from palliative pain management to regenerative cartilage repair. The Company has over two decades of global expertise developing, manufacturing, and commercializing more than 20 products based on its proprietary hyaluronic acid (HA) technology. Anika's orthopedic medicine portfolio includes ORTHOVISC®, MONOVISC®, and CINGAL®, which alleviate pain and restore joint function by replenishing depleted HA, and HYALOFAST®, a solid HA-based scaffold to aid cartilage repair and regeneration. For more information about Anika, please visit www.anikatherapeutics.com.

Forward-Looking Statements

The statements made in the last sentence of the first bullet point and the last sentence of third 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 patient enrollment expectations with regard to the Company's supplemental Cingal Phase III clinical trial and the Company's international expansion expectations in the near future. 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, but not limited to, (i) the Company's ability to successfully commence and/or complete clinical trials of its products 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, 510(k) applications, or new drug 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 operates 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; and (x) the Company's ability to achieve its growth targets. Additional factors and risks are described in the Company's periodic reports filed with the Securities and Exchange Commission, and they are available on the SEC's website at www.sec.gov. Forward-looking statements are made based on information available to the Company on the date of this press release, and the Company assumes no obligation to update the information contained in this press release.

 
Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
                     

For the Three Months Ended June 30,

For the Six Months Ended June 30,

  2017   2016   2017   2016
Product revenue $ 28,340 $ 26,575 $ 51,721 $ 48,853
Licensing, milestone and contract revenue   5,122   6   5,127   11
Total revenue 33,462 26,581 56,848 48,864
 
Operating expenses:
Cost of product revenue 6,315 6,065 12,398 11,490
Research and development 4,449 2,792 8,679 4,951
Selling, general and administrative   4,972   4,255   10,039   8,245
Total operating expenses   15,736   13,112   31,116   24,686
Income from operations 17,726 13,469 25,732 24,178
Interest income, net   16   49   74   121
Income before income taxes 17,742 13,518 25,806 24,299
Provision for income taxes   6,373   4,903   8,944   8,789
Net income $ 11,369 $ 8,615 $ 16,862 $ 15,510
 
Basic net income per share:
Net income $ 0.78 $ 0.59 $ 1.16 $ 1.05
Basic weighted average common shares outstanding 14,588 14,679 14,582 14,778
Diluted net income per share:
Net income $ 0.76 $ 0.57 $ 1.12 $ 1.02
Diluted weighted average common shares outstanding 15,044 15,111 15,046 15,210

           
Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
 
June 30, December 31,
ASSETS   2017     2016  
Current assets:
Cash and cash equivalents $ 117,874 $ 104,261
Investments 25,000 20,500
Accounts receivable, net of reserves of $210 and $194 at June 30, 2017 and December 31, 2016, respectively 30,450 27,598
Inventories, net 17,584 15,983
Prepaid expenses and other current assets   1,973     2,098  
Total current assets 192,881 170,440
Property and equipment, net 52,272 52,296
Long-term deposits and other 1,389 69
Intangible assets, net 10,626 10,227
Goodwill   7,836     7,214  
Total assets $ 265,004   $ 240,246  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,465 $ 2,303
Accrued expenses and other current liabilities   7,976     6,496  
Total current liabilities   13,441     8,799  
Other long-term liabilities 422 2,126
Deferred tax liability 7,003 6,548
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 1,250 shares authorized, no shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively - -
Common stock, $.01 par value; 60,000 authorized, 14,658 and 14,627 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively 146 146
Additional paid-in-capital 65,171 61,735
Accumulated other comprehensive loss (5,736 ) (7,317 )
Retained earnings   184,557     168,209  
Total stockholders' equity   244,138     222,773  
Total liabilities and stockholders' equity $ 265,004   $ 240,246  
 

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

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Product Line:   2017   %     2016   %     2017   %     2016   %  
Orthobiologics $ 24,468 86 % $ 23,304 88 % $ 44,695 86 % $ 42,891 88 %
Surgical 1,335 5 % 1,433 5 % 2,631 5 % 2,751 6 %
Dermal 453 2 % 582 2 % 878 2 % 963 2 %
Other   2,084   7 %   1,256   5 %   3,517   7 %   2,248   4 %
Product Revenue $ 28,340   100 % $ 26,575   100 % $ 51,721   100 % $ 48,853   100 %
 
Product Gross Profit $ 22,025 $ 20,510 $ 39,323 $ 37,363
Product Gross Margin 78 % 77 % 76 % 76 %
 
 
Product Revenue by Geographic Region
(in thousands, except percentages)
(unaudited)
 
For the Three Months Ended June 30,

For the Six Months Ended June 30,

  2017   %     2016   %     2017   %     2016   %  
Geographic Region:
United States $ 22,331 79 % $ 21,895 82 % $ 41,261 80 % $ 39,906 82 %
Europe 4,060 14 % 2,977 11 % 6,889 13 % 5,542 11 %
Other   1,949   7 %   1,703   7 %   3,571   7 %   3,405   7 %
Product Revenue $ 28,340   100 % $ 26,575   100 % $ 51,721   100 % $ 48,853   100 %

Anika Therapeutics, Inc.
Charles H. Sherwood, Ph.D., President and CEO
Sylvia Cheung, CFO
Tel: 781-457-9000

Source: Anika Therapeutics, Inc.

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