Anika Reports Second Quarter 2018 Financial Results

From Startup Anika Therapeutics

Link to Full Article: http://ir.anikatherapeutics.com/news-releases/news-release-details/anika-reports-second-quarter-2018-financial-results

Solid Top and Bottom Line Performance with 8% Product Revenue Growth
and $0.68 Diluted EPS
New Leadership Added to Optimize Commercial Reach and Operating
Efficiency
Multiple Initiatives Ongoing to Gain U.S. Regulatory Approval of
CINGAL
BEDFORD, Mass.–(BUSINESS WIRE)–Jul. 25, 2018–
Anika
Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated orthopedic
and regenerative medicines company specializing in therapeutics based on
its proprietary hyaluronic
acid (“HA”) technology, today reported financial results for the
second quarter ended June 30, 2018, along with business progress in the
period.

“Anika’s strategic initiatives in the second quarter were focused on
opportunities to accelerate revenue growth in 2019 and beyond,” said
Joseph Darling, President and Chief Executive Officer of Anika
Therapeutics. “We strengthened our senior leadership team, increased our
focus on strategic M&A, and began executing on multiple strategies to
gain U.S. regulatory approval of CINGAL. Bringing CINGAL to U.S.
patients and physicians remains one of Anika’s top strategic priorities.
We are committed to both maximizing our current business opportunities
and pursuing new growth initiatives to create near- and long-term value
for shareholders.”

Second Quarter Financial Results

Product revenue increased 8% year-over-year in the second quarter of
2018, due primarily to higher MONOVISC revenue in the U.S. Global
MONOVISC revenue increased 26% year-over-year in the second quarter of
2018.

U.S. Viscosupplementation revenue increased $2.3 million
year-over-year for the second quarter of 2018. International
Viscosupplementation revenue decreased $0.7 million year-over-year for
the second quarter of 2018, due primarily to the timing of orders.
Domestically, ORTHOVISC and MONOVISC maintained the number one
position in the combined multi- and single-injection segments in the
second quarter of 2018.

Total revenue for the second quarter of 2018 was $30.5 million,
compared to $33.5 million for the second quarter of 2017. The
year-over-year decline was due to the achievement of $5.0 million of
milestone revenue in the second quarter of 2017, as a result of
MONOVISC reaching $100 million in U.S. end-user sales within a
consecutive 12-month period.

Total operating expenses for the second quarter of 2018 were $19.3
million, compared to $15.7 million for the second quarter of 2017. The
increase in total operating expenses was due primarily to product
revenue growth, increased personnel costs, and expanded worldwide
commercial initiatives.

Net income for the second quarter of 2018 was $10.1 million, or $0.68
per diluted share, compared to $11.4 million, or $0.76 per diluted
share, for the second quarter of 2017. The decline in net income was
due primarily to the increase in operating expenses previously
discussed.

Recent Business Highlights

Announced that initial top-line results for the CINGAL 16-02 clinical
trial, an active-comparator Phase III study conducted to support U.S.
approval, did not reach statistical significance, although it did
maintain the durability of strong pain relief throughout the 26 weeks,
consistently demonstrating the long-term benefits of CINGAL. The
magnitude of pain reduction demonstrated incremental improvement
compared to the previous CINGAL Phase III study, and the duration of
patient improvement after CINGAL injection was maintained near peak
levels throughout the 26-week study. Anika has engaged external
regulatory and legal experts to assist in the strategic approach for
seeking CINGAL approval in the U.S. market. Anika remains fully
committed to working closely with regulators to gain U.S. approval of
CINGAL.

Strengthened the senior leadership management team with the newly
created position of Vice President of International Sales based in
Europe to maximize sales impact and optimize the Company’s commercial
reach in our foreign markets.

Added a new Vice President of Operations to senior leadership team to
focus on operation efficiency and margin improvements.

Redirected internal efforts of Chief Technology and Strategy Officer
with spear-heading the assessment of strategic M&A opportunities.

Completed the Company’s $30 million accelerated share repurchase
program in July, under which Anika repurchased approximately 800,000
shares of its outstanding common stock.

Full Year 2018 Revised Corporate OutlookBased on currently
available information, the Company revised its guidance for the full
year of 2018. Anika currently does not expect licensing, milestone and
contract revenue of $5.0 million in 2018. The Company continues to
anticipate product revenue to be flat for the full year of 2018. The
Company continues to expect that it will resume the shipment of products
that were the subject of the previously-disclosed voluntary recall by
the end of this year. Total operating expenses are now expected to be in
the low $90 million range for the full year of 2018, adjusted for the
reduction of CINGAL pre-launch marketing expenses.

Conference Call InformationAnika’s management will hold a
conference call and webcast to discuss its financial results and
business highlights tomorrow, Thursday, July 26 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
and regenerative 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 tissue 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 StatementsThe statements made in the
section captioned “Full Year 2018 Revised Corporate Outlook” 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 2018 revenue and total
operating expense expectations and to the Company’s timeline to resume
shipping of products that were the subject of the previously-disclosed
voluntary recall. 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

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,

2018

2017

2018

2017

Product revenue

$

30,542

$

28,340

$

51,800

$

51,721

Licensing, milestone and contract revenue

 

6

 

 

5,122

 

 

12

 

5,127

Total revenue

30,548

33,462

51,812

56,848

 

Operating expenses:

Cost of product revenue

8,152

6,315

15,996

12,398

Research and development

4,733

4,449

9,895

8,679

Selling, general and administrative

 

6,417

 

 

4,972

 

 

22,507

 

10,039

Total operating expenses

 

19,302

 

 

15,736

 

 

48,398

 

31,116

Income from operations

11,246

17,726

3,414

25,732

Interest and other income, net

 

290

 

 

16

 

 

385

 

74

Income before income taxes

11,536

17,742

3,799

25,806

Provision for income taxes

 

1,445

 

 

6,373

 

 

394

 

8,944

Net income

$

10,091

 

$

11,369

 

$

3,405

$

16,862

 

Basic net income per share:

Net income

$

0.69

$

0.78

$

0.23

$

1.16

Basic weighted average common shares outstanding

14,652

14,588

14,666

14,582

Diluted net income per share:

Net income

$

0.68

$

0.76

$

0.23

$

1.12

Diluted weighted average common shares outstanding

14,915

15,044

15,045

15,046

 

 

Anika Therapeutics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except per share data)

(unaudited)

 

June 30,

December 31,

ASSETS

2018

2017

Current assets:

Cash and cash equivalents

$

126,047

$

133,256

Investments

13,250

24,000

Accounts receivable

23,389

23,825

Inventories, net

24,060

22,035

Prepaid expenses and other current assets

 

4,245

 

 

3,211

 

Total current assets

190,991

206,327

Property and equipment, net

55,377

56,183

Other long-term assets

1,157

1,254

Intangible assets, net

9,876

10,635

Goodwill

 

8,013

 

 

8,218

 

Total assets

$

265,414

 

$

282,617

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

5,074

$

6,747

Accrued expenses and other current liabilities

 

7,459

 

 

6,326

 

Total current liabilities

 

12,533

 

 

13,073

 

Other long-term liabilities

882

660

Deferred tax liability

5,396

5,393

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.01 par value; 1,250 shares authorized, no
shares issued and outstanding at June 30, 2018 and December 31,
2017, respectively

Common stock, $0.01 par value; 90,000 shares authorized, 14,584 and
14,688 shares issued and outstanding at June 30, 2018 and December
31, 2017, respectively

146

147

Additional paid-in-capital

48,656

68,617

Accumulated other comprehensive loss

(5,115

)

(4,784

)

Retained earnings

 

202,916

 

 

199,511

 

Total stockholders’ equity

 

246,603

 

 

263,491

 

Total liabilities and stockholders’ equity

$

265,414

 

$

282,617

 

 

 

 

 

 

 

 

 

 

 

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:

2018

 

%

2017

 

%

2018

 

%

2017

 

%

Orthobiologics

$

26,192

86%

$

24,468

86%

$

45,681

88%

$

44,695

86%

Surgical

1,263

4%

1,335

5%

2,509

5%

2,631

5%

Dermal

623

2%

453

2%

83

0%

878

2%

Other

 

2,464

 

8%

 

2,084

 

7%

 

3,527

 

7%

 

3,517

 

7%

Product Revenue

$

30,542

 

100%

$

28,340

 

100%

$

51,800

 

100%

$

51,721

 

100%

 

Product Gross Profit

$

22,390

$

22,025

$

35,803

$

39,323

Product Gross Margin

73%

78%

69%

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,

2018

 

%

2017

 

%

2018

 

%

2017

 

%

Geographic Region:

United States

$

24,773

81%

$

22,331

79%

$

41,682

81%

$

41,261

80%

Europe

3,498

11%

4,060

14%

5,889

11%

6,889

13%

Other

 

2,271

 

8%

 

1,949

 

7%

 

4,229

 

8%

 

3,571

 

7%

Product Revenue

$

30,542

 

100%

$

28,340

 

100%

$

51,800

 

100%

$

51,721

 

100%

View source version on businesswire.com: https://www.businesswire.com/news/home/20180725005844/en/
Source: Anika Therapeutics, Inc.

Anika Therapeutics, Inc.Joseph Darling, President & CEOSylvia
Cheung, CFOTel: 781-457-9000

Please visit their site for more information: Anika Therapeutics.com

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2018-07-25 20:46:51