Anika Therapeutics
Oct 26, 2016

Anika Reports Third Quarter 2016 Financial Results

Worldwide Orthobiologics Revenue Increases 10% Year-over-Year

Diluted Earnings Per Share Increases to $0.59

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 third quarter ended September 30, 2016, along with business progress in the period.

"We continued to deliver solid financial results in the third quarter, while expanding globally and advancing our deep and differentiated pipeline to drive sustained growth," said Charles H. Sherwood, Ph.D., President and Chief Executive Officer. "Last quarter, we had a productive meeting with the FDA regarding the CINGAL regulatory submission and continue to gain alignment on additional clinical and non-clinical work required to bring this important treatment to the U.S. Our confidence in the future success of CINGAL in the U.S. has been reaffirmed by how well CINGAL has been received by physicians in Canada and Europe, where we recently launched. We are well-positioned to achieve our operational and financial objectives for 2016 and to create significant near- and long-term value for patients and shareholders."

Third 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, October 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 second paragraph 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 future growth and creation of value, and the Company's ability and positioning to meet its 2016 financial and operational goals. 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 (SEC), 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 September 30, For the Nine Months Ended September 30,
2016 2015 2016 2015
Product revenue $ 25,783 $ 23,676 $ 74,636 $ 62,089
Licensing, milestone and contract revenue   6   5   17   16
Total revenue 25,789 23,681 74,653 62,105
 
Operating expenses:
Cost of product revenue 4,998 5,176 16,488 14,764
Research & development 2,822 2,061 7,773 5,971
Selling, general & administrative   4,280   3,309   12,525   10,302
Total operating expenses   12,100   10,546   36,786   31,037
Income from operations 13,689 13,135 37,867 31,068
Interest income, net   93   34   214   82
Income before income taxes 13,782 13,169 38,081 31,150
Provision for income taxes   4,830   4,789   13,619   11,435
Net income $ 8,952 $ 8,380 $ 24,462 $ 19,715
 
Basic net income per share:
Net income $ 0.61 $ 0.56 $ 1.66 $ 1.32
Basic weighted average common shares outstanding 14,625 14,967 14,726 14,945
Diluted net income per share:
Net income $ 0.59 $ 0.55 $ 1.61 $ 1.29
Diluted weighted average common shares outstanding 15,077 15,316 15,163 15,311
 
Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share data and per share data)
(unaudited)
     
September 30, December 31,
ASSETS 2016 2015
Current assets:
Cash and cash equivalents $ 98,047 $ 110,707
Investments 22,250 27,751
Accounts receivable, net of reserves of $224 and $167 at September 30, 2016 and December 31, 2015, respectively 21,833 21,652
Inventories 18,020 14,938
Prepaid expenses and other current assets   924     1,385  
Total current assets 161,074 176,433
Property and equipment, net 51,058 40,108
Long-term deposits and other 69 69
Intangible assets, net 11,171 11,656
Goodwill   7,690     7,482  
Total Assets $ 231,062   $ 235,748  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,949 $ 8,302
Accrued expenses and other current liabilities 5,423 4,778
Income taxes payable   217     4,198  
Total current liabilities   7,589     17,278  
Other long-term liabilities 2,556 781
Long-term deferred revenue 59 66
Deferred tax liability 6,315 6,775
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 1,250,000 shares authorized, no shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively - -
Common stock, $.01 par value; 60,000,000 and 30,000,000 shares authorized, 14,623,225 and 15,036,808 shares issued and outstanding at September30, 2016 and December 31, 2015, respectively 146 150
Additional paid-in-capital 60,374 81,685
Accumulated other comprehensive loss (6,101 ) (6,649 )
Retained earnings   160,124     135,662  
Total stockholders' equity   214,543     210,848  
Total Liabilities and Stockholders' Equity $ 231,062   $ 235,748  

 
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 September 30, For the Nine Months Ended September 30,
2016   % 2015   % 2016   % 2015   %
Orthobiologics $ 22,428 87 % $ 20,461 86 % $ 65,319 88 % $ 51,717 83 %
Surgical 1,173 5 % 1,413 6 % 3,924 5 % 4,450 7 %
Dermal 594 2 % 412 2 % 1,558 2 % 1,132 2 %
Other   1,588   6 %   1,390   6 %   3,835   5 %   4,790   8 %
Product Revenue $ 25,783   100 % $ 23,676   100 % $ 74,636   100 % $ 62,089   100 %
 
Product Gross Profit $ 20,785 $ 18,500 $ 58,148 $ 47,325
Product Gross Margin

81%

 

78%

 

78%

 

76%

 

 
Product Revenue by Geographic Region
(in thousands, except percentages)
(unaudited)
                               
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2016   % 2015  

%

2016  

%

2015

 

%

Geographic Location:
United States $ 21,126 82 % $ 19,239 82 % $ 61,032 82 % $ 51,048 82 %
Europe 2,703 10 % 1,977 8 % 8,240 11 % 6,294 10 %
Other   1,954   8 %   2,460   10 %   5,364   7 %   4,747   8 %
Product Revenue $ 25,783   100 % $ 23,676   100 % $ 74,636   100 % $ 62,089   100 %
 

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

Source: Anika Therapeutics, Inc.

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