Anika Therapeutics Reports First Quarter 2014 Financial Results

  Anika Therapeutics Reports First Quarter 2014 Financial Results

            Receives $17.5 Million in Monovisc^® Milestone Payment

                   Total Revenue Grows 123% to $34 Million

        Earnings per Share Increase to $0.97 from $0.21 a Year Earlier

Business Wire

BEDFORD, Mass. -- April 29, 2014

Anika Therapeutics, Inc. (Nasdaq: ANIK), a leader in products for tissue
protection, healing and repair, based on hyaluronic acid (“HA”) technology,
today reported financial results for the quarter ended March 31, 2014.

Management Commentary

“Anika started 2014 with a strong first quarter,” said Charles H. Sherwood,
Ph.D., President and Chief Executive Officer. “Our total revenue more than
doubled from the first quarter last year, materially driven by milestone and
contract revenue associated with our U.S. license agreement for Monovisc^®.
This revenue growth together with the impact of our ongoing productivity
improvements in operations resulted in a significant year-over-year increase
in Anika’s earnings for the quarter.”

“Our first quarter was highlighted by the FDA approval of Monovisc^® and the
product’s U.S. commercial launch,” Sherwood said. “The launch is proceeding as
we expected and delivering encouraging early results, including a first
commercial sale in the market in April. With both Monovisc^® and Orthovisc^®
in our portfolio, we are more effectively leveraging our worldwide
viscosupplementation brand recognition and strengthening our leadership in
both domestic and international markets.”

“We also made progress on our product pipeline in the first quarter,” said
Sherwood. “We are on schedule to complete our ongoing multinational Cingal™
clinical trial. At the same time, we continued advancing forward on our
mission to make Hyalofast^TM available as a one-step cartilage repair solution
in the United States. These efforts focused on preparations for a Hyalofast^TM
human clinical trial to commence later this year in support of a submission to
the FDA.”

“Looking ahead, we remain positive and excited about our outlook for 2014.
Anika is on track to meet its business goals. These include U.S. commercial
launch of Monovisc^®, clinical success and European regulatory advancement of
Cingal™, as well as clinical progress on Hyalofast^TM and our longer-term
pipeline opportunities. In addition, we will continue to add the talent we
need at both the leadership and operational levels to drive our expansion
beyond viscosupplementation and deliver on Anika’s growth potential. We
believe Anika is well-positioned for continued revenue growth and
profitability in the quarters ahead,” Sherwood concluded.


Total revenue for the first quarter of 2014 was $34.0 million, compared with
$15.2 million in the first quarter of 2013. First-quarter 2014 total revenue
included $19.7 million in milestone and contract revenue associated with
Anika’s U.S. license agreement for Monovisc^®, as the development obligations
under the agreement were fully delivered prior to the end of the quarter. This
primarily consisted of a milestone payment related to the product approval and
successful resolution of patent litigation. Revenue for the first quarter of
2014 also included an initial U.S. stocking order for Monovisc^® in
preparation for the product’s U.S. commercial launch. Anika’s product revenue
for the first quarter of 2014 was $14.4 million, at a level similar to the
first quarter last year and consistent with our expectation. Product revenue
in the first quarter of 2014 reflected order timing by our major distributors
and is not indicative of product revenue growth rates in subsequent quarters
of 2014.

Product Gross Margin and Operating Expenses

Product gross margin for the first quarter of 2014 improved to 70%, from 67%
in the first quarter of 2013. This improvement was primarily driven by more
favorable product mix as well as continued efficiency gains. Total operating
expenses for the first quarter of 2014 were $10.1 million, compared with $10.2
million a year earlier. Research and development expenses increased 45% from
the first quarter of 2013, reflecting expenses for the company’s Cingal™
clinical trial and other planned product pipeline initiatives. Selling,
general and administrative expenses decreased 12% from the first quarter of
2013, primarily reflecting certain nonrecurring external professional and
personnel expenses in the year-earlier quarter.

Operating and Net Income

Operating income for the first quarter of 2014 was $23.9 million, compared
with $5.0 million in the same period in 2013. Net income for the first quarter
of 2014 was $15.0 million, or $0.97 per diluted share, compared with $3.1
million, or $0.21 per diluted share, in the first quarter last year. Operating
income, net income and earnings per share were higher year-over-year,
primarily due to operating leverage on our sales volume and the milestone and
contract revenue related to Monovisc^® in the U.S.

Cash and Cash Equivalents

Anika’s cash and cash equivalents at March 31, 2014 increased to $82.2
million, from $63.3 million at December 31, 2013. The approximately $19
million increase in cash and cash equivalents reflected a $17.5 million
milestone payment from DePuy Synthes Mitek Sports Medicine for the irrevocable
resolution of the Company and Snaofi/Gemzyme’s patent litigation and the
related FDA approval of Monovisc^®. The cash balance increase was driven
primarily by higher income from operations, cash collections on accounts
receivable, and option exercises during the period.

Conference Call Information

Anika will hold a conference call to discuss its financial results, business
highlights and outlook tomorrow, Wednesday, April 30, 2014 at 9:00 a.m. ET. In
addition, the company will answer questions concerning business and financial
developments and trends, and other business and financial matters affecting
the company, some of the responses to which may contain information that has
not been previously disclosed.

To listen to the conference call, dial 855-468-0611 (international callers
dial 484-756-4332). Please call approximately 10 minutes before the starting
time and reference Anika Therapeutics. In addition, the conference call will
be available through a live audio webcast in the “Investor Relations” section
of the Anika Therapeutics website, An accompanying
slide presentation can also be accessed via the Anika Therapeutics website.
The conference call will be archived and accessible on the same website
shortly after its conclusion.

About Anika Therapeutics, Inc.

Headquartered in Bedford, Mass., Anika Therapeutics, Inc. develops,
manufactures and commercializes therapeutic products for tissue protection,
healing, and repair. These products are based on hyaluronic acid (HA), a
naturally occurring, biocompatible polymer found throughout the body. Anika’s
products range from orthopedic/joint health solutions led by Orthovisc^®, a
treatment for osteoarthritis of the knee; to surgical aids in the
anti-adhesion and ophthalmic fields. The company also offers  aesthetic dermal
fillers for the correction of facial wrinkles. Anika’s Italian subsidiary,
Anika S.r.l., provides complementary HA products in orthopedic/joint health
and anti-adhesion, as well as therapeutics in areas such as advanced wound
treatment and ear, nose and throat care. Its regenerative technology advances
Anika’s vision to offer therapeutic products and medical solutions that go
beyond pain relief to protect and restore damaged tissue.

The statements made in 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 (i) the company and its partner’s ability to
commercialize Monovisc^® in the U.S.; (ii) our ability to capitalize on the
strengths of our viscosupplementation portfolio; (iii) our ongoing initiatives
to improve performance across the business; (iv) our efforts and ability to
strengthen and expand our international Orthobiologics distribution network;
(v) the company’s plans to continue to drive efficiencies in operations and
manufacturing; (vi) the prospects for the company’s product pipeline,
including regenerative product development; (vii) bringing Cingal™ to market;
and (viii) expectations for future growth and profitability improvement in the
quarters ahead. 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 on a timely basis or at all, 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, or 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; (ii) the company's research and product development efforts and
their relative success, including whether the company has any meaningful sales
of any new products resulting from such efforts; (iii) the cost effectiveness
and efficiency of our clinical studies, manufacturing operations and
production planning; (iv) 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; (v) future determinations by the company to allocate
resources to products and in directions not presently contemplated; (vi) the
company’s ability to successfully launch Monovisc^® in the U.S.; (vii) the
company’s ability to provide an adequate and timely supply of its products to
its customers; (viii) our ability to continue to successfully manage Anika
Therapeutics S.r.l.’s business; and (ix) the company’s ability to achieve its
stated growth targets. Certain other factors that might cause the company's
actual results to differ materially from those in the forward-looking
statements include those set forth under the headings "Business," "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the company's Annual Report on Form 10-K for the
year ended December 31, 2013, as well as those described in the company's
other press releases and SEC filings.

Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
                                            Three Months Ended March 31,
                                               2014           2013
Product revenue                                $ 14,351,405     $ 14,494,489
Licensing, milestone and contract               19,658,882      752,522    
Total revenue                                    34,010,287       15,247,011
Operating expenses:
Cost of product revenue                          4,361,019        4,841,170
Research & development                           2,287,715        1,582,910
Selling, general & administrative                3,490,985        3,947,114
Restructuring credits                           -               (135,607   )
Total operating expenses                        10,139,719      10,235,587 
Income from operations                           23,870,568       5,011,424
Interest income (expense), net                  467             (39,558    )
Income before income taxes                       23,871,035       4,971,866
Provision for income taxes                      8,840,782       1,903,864  
Net income                                     $ 15,030,253     $ 3,068,002  
Basic net income per share:
Net income                                     $ 1.04           $ 0.23
Basic weighted average common shares             14,461,367       13,406,952
Diluted net income per share:
Net income                                     $ 0.97           $ 0.21
Diluted weighted average common shares           15,499,447       14,357,110

Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
                                        March 31,         December 31,
ASSETS                                     2014                2013
Current assets:
Cash and cash equivalents                  $ 82,160,251        $ 63,333,160
Accounts receivable, net of reserves
of $592,420 and $593,023 at March            16,466,436          18,736,845
31, 2014 and December 31, 2013,
Inventories                                  12,981,495          10,996,785
Current portion deferred income              659,040             659,040
Prepaid expenses and other                  1,217,403         865,957     
Total current assets                         113,484,625         94,591,787
Property and equipment, at cost              52,768,367          52,413,423
Less: accumulated depreciation              (20,134,401 )      (19,474,712 )
                                             32,633,966          32,938,711
Long-term deposits and other                 69,080              69,080
Intangible assets, net                       18,439,286          18,998,409
Goodwill                                    9,434,289         9,443,894   
Total Assets                               $ 174,061,246      $ 156,041,881 
Current liabilities:
Accounts payable                           $ 2,742,808         $ 2,793,911
Accrued expenses                             4,497,706           5,537,881
Deferred revenue                             46,412              180,433
Income taxes payable                        424,993           770,276     
Total current liabilities                   7,711,919         9,282,501   
Other long-term liabilities                  1,089,708           1,133,544
Long-term deferred revenue                   72,367              2,054,941
Deferred tax liability                       8,617,245           7,936,864
Commitments and contingencies                                   
Stockholders’ equity:
Preferred stock, $.01 par value;
1,250,000 shares authorized, no
shares issued and outstanding at             -                   -
March 31, 2014

and December 31, 2013
Common stock, $.01 par value;
30,000,000 shares authorized,
14,620,032 and 14,289,308 shares             146,200             142,893
issued and outstanding at March 31,
2014 and December 31, 2013,
Additional paid-in-capital                   76,534,563          70,606,031
Accumulated currency translation             (1,725,211  )       (1,699,095  )
Retained earnings                           81,614,455        66,584,202  
Total stockholders’ equity                  156,570,007       135,634,031 
Total Liabilities and Stockholders’        $ 174,061,246      $ 156,041,881 

Anika Therapeutics, Inc. and Subsidiaries
Supplemental Financial Data
Revenue by Product Segment and Product Gross Margin
                            Quarter Ended March 31,
                            2014             2013             %
Orthobiologics              $ 11,572,150     $ 11,283,547     3%
Dermal                      188,651          241,584          (22%)
Surgical                    1,752,020        988,864          77%
Ophthalmic                  208,584          928,458          (78%)
Veterinary                  630,000          1,052,036        (40%)
Total Product Revenue       $ 14,351,405     $ 14,494,489     (1%)
Product gross profit        $ 9,990,386      $ 9,653,319
Product gross margin        70%              67%
Total Revenue by Geographic Region
                            Quarter Ended March 31,
                            2014             2013             %
Geographic Location:
United States               $ 31,533,817     $ 12,280,079     157%
Europe                      1,695,816        1,583,993        7%
Other                       780,654          1,382,939        (44%)
Total Revenue               $ 34,010,287     $ 15,247,011     123%


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