Anika Reports Third Quarter 2018 Financial Results

From Startup Anika Therapeutics

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

CINGAL Drives Strong International Viscosupplement Revenue Growth
Achieves Solid Bottom Line Performance with $0.53 Diluted EPS

BEDFORD, Mass.–(BUSINESS WIRE)–Oct. 24, 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
third quarter ended September 30, 2018, and provided an update on its
business progress in the period.

“Anika delivered solid financial results in the third quarter, while
continuing to take important steps to accelerate revenue growth in 2019
and beyond,” said Joseph Darling, President and Chief Executive Officer
of Anika Therapeutics. “We are encouraged by the continued advances we
are making across our deep pipeline and diverse commercial portfolio.
During the quarter, CINGAL end user demand in Canada and Europe remained
strong, and we were pleased to add four new distribution partners to
further expand our commercial reach in Europe, Asia and South America.
Focused international expansion efforts enabled us to realize a 31%
year-over-year increase in international Viscosupplement revenue while
we continued to generate strong earnings and cash flow. As we prepare to
discuss the pathway for U.S. regulatory approval for CINGAL with the
U.S. Food and Drug Administration in the first quarter of 2019, we
believe Anika is well-positioned to transform into a global commercial
company increasingly capable of generating significant value for our
patients and shareholders.”

Third Quarter Financial Results

Total revenue for the third quarter of 2018 was $26.8 million,
compared to $27.2 million for the third quarter of 2017. The
year-over-year decline was due primarily to the impact from the
voluntary recall of HYALOFAST, HYALOGRAFT-C, and HYALOMATRIX announced
in May 2018.

Global Viscosupplement revenue increased 2% year-over-year for the
third quarter of 2018, while international Viscosupplement revenue
increased 31% during the same period. The increases were primarily due
to the growth of CINGAL in international markets, as well as the
continued global expansion of Viscosupplement products overall.

Total operating expenses for the third quarter of 2018 were $18.2
million, compared to $16.9 million for the third quarter of 2017. The
increase in total operating expenses was due primarily to higher
production costs and increased personnel and professional costs.

Net income for the third quarter of 2018 increased to $7.6 million, or
$0.53 per diluted share, compared to $6.9 million, or $0.46 per
diluted share, for the third quarter of 2017. The increase in net
income was due primarily to the reduction in R&D expenses as a result
of the completion of the CINGAL 16-02 study and lower income tax
expenses in 2018.

Recent Business Highlights

Continued to work with external regulatory and legal experts to seek
regulatory approval of CINGAL in the U.S. market. Anika plans to meet
with the U.S. Food and Drug Administration (FDA) in the first quarter
of 2019 and is developing multiple strategies to enable the company to
move forward expeditiously once it has received guidance from the FDA
regarding the pathway for CINGAL.

Advanced the Company’s product pipeline with the completion of
preclinical development activities for its regenerative therapy for
rotator cuff repair.

Strengthened Anika’s international product distribution network and
expanded the Company’s commercial reach with four new distribution
partners in Europe, Asia and South America.

Continued to evaluate potential partnership opportunities for the
Company’s expansive product pipeline as part of the ongoing work on
its 5-year strategic plan.

Convened an international distributor meeting at the Company’s
European headquarters to align key growth objectives and market
approach strategies for 2019.

Appointed Cheryl Blanchard, Ph.D., and Susan Vogt as new independent
members of the Company’s Board of Directors.

Full Year 2018 Revised Corporate OutlookBased on currently
available information, the Company anticipates full year product revenue
to be approximately 3% below prior year. 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 reduced to the high $80
million range for the full year of 2018 as a result of successful cost
control initiatives.

Conference Call InformationAnika’s management will hold a
conference call and webcast to discuss its financial results and
business highlights today, Wednesday, October 24 at 5:00 pm 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
last sentence of the second paragraph of this press release and in the
Section captioned “Full Year 2018 Corporate Outlook,” 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 expected meeting with the U.S. Food and Drug Administration
during the first quarter of 2019, the Company’s full-year 2018 product
revenue and operating expense projections, and the Company’s
expectations related to shipment of products previously subject to the
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 SubsidiariesConsolidated
Statements of Operations(in thousands, except per share
data)(unaudited)

 

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2018

2017

2018

2017

Product revenue

$

26,781

$

27,178

$

78,581

$

78,899

Licensing, milestone and contract revenue

 

6

 

6

 

18

 

5,133

Total revenue

26,787

27,184

78,599

84,032

 

Operating expenses:

Cost of product revenue

8,282

6,250

24,279

18,648

Research and development

4,232

5,842

14,126

14,521

Selling, general and administrative

 

5,700

 

4,823

 

28,207

 

14,862

Total operating expenses

 

18,214

 

16,915

 

66,612

 

48,031

Income from operations

8,573

10,269

11,987

36,001

Interest and other income, net

 

522

 

261

 

907

 

335

Income before income taxes

9,095

10,530

12,894

36,336

Provision for income taxes

 

1,496

 

3,643

 

1,890

 

12,587

Net income

$

7,599

$

6,887

$

11,004

$

23,749

 

Basic net income per share:

Net income

$

0.53

$

0.47

$

0.76

$

1.63

Basic weighted average common shares outstanding

14,237

14,579

14,524

14,572

Diluted net income per share:

Net income

$

0.53

$

0.46

$

0.74

$

1.58

Diluted weighted average common shares outstanding

14,377

15,115

14,820

15,065

 

 

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

 

 

 

 

ASSETS

September 30,2018

December 31,2017

Current assets:

Cash, cash equivalents and investments

$

149,011

$

157,256

Accounts receivable, net

20,771

23,825

Inventories, net

23,828

22,035

Prepaid expenses and other current assets

 

1,981

 

 

3,211

 

Total current assets

195,591

206,327

Property and equipment, net

55,041

56,183

Other long-term assets

1,109

1,254

Intangible assets, net

9,564

10,635

Goodwill

 

7,959

 

 

8,218

 

Total assets

$

269,264

 

$

282,617

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

2,462

$

6,747

Accrued expenses and other current liabilities

 

6,843

 

 

6,326

 

Total current liabilities

 

9,305

 

 

13,073

 

Other long-term liabilities

574

660

Deferred tax liability

4,120

5,393

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.01 par value

Common stock, $0.01 par value

142

147

Additional paid-in-capital

49,836

68,617

Accumulated other comprehensive loss

(5,228

)

(4,784

)

Retained earnings

 

210,515

 

 

199,511

 

Total stockholders’ equity

 

255,265

 

 

263,491

 

Total liabilities and stockholders’ equity

$

269,264

 

$

282,617

 

 

 

Anika Therapeutics, Inc. and SubsidiariesSupplemental
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,
Product Line:

2018

 

 

%

2017

 

 

%

2018

 

 

%

2017

 

 

%

Orthobiologics

$

24,097

90

%

$

23,990

88

%

$

69,778

88

%

$

68,686

87

%

Surgical

1,191

4

%

1,765

7

%

3,700

5

%

4,395

6

%

Dermal

80

1

%

358

1

%

163

1

%

1,235

2

%

Other

 

1,413

 

 

5

%

 

1,065

 

 

4

%

 

4,940

 

 

6

%

 

4,583

 

 

5

%

Product Revenue

$

26,781

 

 

100

%

$

27,178

 

 

100

%

$

78,581

 

 

100

%

$

78,899

 

 

100

%

 

Product Gross Profit

$

18,499

$

20,928

$

54,302

$

60,251

Product Gross Margin

69%

77%

69%

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,

2018

 

 

%

2017

 

 

%

2018

 

 

%

2017

 

 

%

Geographic Region:

United States

$

21,695

81

%

$

22,227

82

%

$

63,377

81

%

$

63,507

81

%

Europe

3,132

12

%

2,832

10

%

9,021

11

%

9,743

12

%

Other

 

1,954

 

 

 

7

%

 

2,119

 

8

%

 

6,183

 

8

%

 

5,649

 

7

%

Product Revenue

$

26,781

 

 

 

100

%

$

27,178

 

 

 

100

%

$

78,581

 

 

 

100

%

$

78,899

 

 

 

100

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20181024005631/en/
Source: Anika Therapeutics, Inc.

Anika Therapeutics, Inc.Joseph Darling, 781-457-9000President
& CEOorSylvia Cheung, 781-457-9000CFO

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

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2018-10-25 19:56:58