Anika Therapeutics (ANIK) 10-Q 1 Nov 16 2016 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 26, 2016
Document Information [Line Items]
Entity Registrant Name	Anika Therapeutics, Inc.
Entity Central Index Key	898,437
Trading Symbol	anik
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		14,623,225
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 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
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 (Note 12)
Stockholders’ equity:
Preferred stock, $.01 par value; 1,250 shares authorized, no shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively
Common stock, $.01 par value; 60,000 and 30,000 shares authorized, 14,623 and 15,037 shares issued and outstanding at September 30, 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

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounts receivable, net of reserves	$ 224	$ 167
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,250,000	1,250,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	60,000,000	30,000,000
Common stock, shares issued (in shares)	14,623,000	15,037,000
Common stock, shares outstanding (in shares)	14,623,000	15,037,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 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 (in dollars per share)	$ 0.61	$ 0.56	$ 1.66	$ 1.32
Basic weighted average common shares outstanding (in shares)	14,625	14,967	14,726	14,945
Diluted net income per share:
Net income (in dollars per share)	$ 0.59	$ 0.55	$ 1.61	$ 1.29
Diluted weighted average common shares outstanding (in shares)	15,077	15,316	15,163	15,311
Net income	$ 8,952	$ 8,380	$ 24,462	$ 19,715
Other comprehensive income (loss):
Unrealized gain (loss) on securities, net of tax		2		(1)
Foreign currency translation adjustment	310	258	548	(1,572)
Total other comprehensive income (loss)	310	260	548	(1,573)
Comprehensive income	$ 9,262	$ 8,640	$ 25,010	$ 18,142

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 24,462	$ 19,715
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,777	2,800
Stock-based compensation expense	2,276	1,562
Deferred income taxes	(571)	(16)
Provision for doubtful accounts	52
Provision for inventory	259	149
Tax benefit from equity awards	(421)	(877)
Changes in operating assets and liabilities:
Accounts receivable	(104)	(6,550)
Inventories	(3,229)	82
Prepaid expenses, other current and long-term assets	355	403
Accounts payable	(5,390)	970
Accrued expenses and other current liabilities	1,091	(120)
Deferred revenue	(43)	(9)
Income taxes payable	(3,496)	5,757
Other long-term liabilities	(61)	(76)
Net cash provided by operating activities	17,957	23,790
Cash flows from investing activities:
Proceeds from maturity of investments	37,750	14,750
Purchase of investments	(32,250)	(30,009)
Purchase of property and equipment	(12,608)	(2,028)
Net cash used in investing activities	(7,108)	(17,287)
Cash flows from financing activities:
Repurchases of common stock	(25,000)
Proceeds from exercise of equity awards	988	1,075
Tax benefit from equity awards	421	877
Net cash (used in) provided by financing activities	(23,591)	1,952
Exchange rate impact on cash	82	(142)
Increase (decrease) in cash and cash equivalents	(12,660)	8,313
Cash and cash equivalents at beginning of period	110,707	100,156
Cash and cash equivalents at end of period	98,047	108,469
Non-cash Investing Activities:
Purchases of property and equipment included in accounts payable and accrued expenses	474	2,197
Build-to-suite lease agreement	$ 1,825

Note 1 - Nature of Business

Note 1 - Nature of Business	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Nature of Operations [Text Block]	1. Nature of Business Anika Therapeutics, Inc. is a global, integrated orthopedic medicines company 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 products based on the Company’s proprietary hyaluronic acid (“HA”) technology. The Company’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. The Company is subject to risks common to companies in the biotechnology and medical device industries including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, commercialization of existing and new products, and compliance with U.S. Food and Drug Administration (“FDA”) and foreign regulations and approval requirements, as well as the ability to grow the Company’s business through appropriate commercial strategies.

Note 2 - Basis of Presentation

Note 2 - Basis of Presentation	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Business Description and Basis of Presentation [Text Block]	2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in accordance with accounting principles generally accepted in the United States (“US GAAP”). The financial statements include the accounts of Anika Therapeutics, Inc. and its subsidiaries. Inter-company transactions and balances have been eliminated. The year-end consolidated balance sheet is derived from the Company’s audited financial statements, but does not include all disclosures required by US GAAP. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the condensed consolidated financial position of the Company as of September 30, 2016, the results of its operations for the three- and nine-month periods ended September 30, 2016 and 2015, and cash flows for the nine-month periods ended September 30, 2016 and 2015. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual financial statements filed with its Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for the three- and nine-month periods ended September 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016. Certain prior period amounts have been reclassified to conform to the current period presentation. There was no impact on operating income.

Note 3 - Recent Accounting Pron

Note 3 - Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	3. Recent Accounting Pronouncements Recently Issued In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 amends existing leasing accounting requirements. The most significant change will result in the recognition of lease assets and lease liabilities by lessees for virtually all leases. The new guidance will also require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Upon adoption, entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Early adoption is permitted, and a number of optional practical expedients may be elected to simplify the impact of adoption. The Company is evaluating the impact of adopting this guidance. In March 2016, the FASB issued ASU No. 2016-09, Compensation (Topic 718) Stock Compensation. ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective as of January 1, 2018. Early adoption is permitted. The Company is assessing ASU 2016-09 and the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments (Topic 326) Credit Losses. ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective as of January 1, 2020. Early adoption is permitted. The Company is assessing ASU 2016-13, and adoption of this standard is not expected to have a material impact on its consolidated financial statements or footnote disclosures. Recently Adopted In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330) Simplifying the Measurement of Inventory. ASU 2015-11 more closely aligns the measurement of inventory in US GAAP with the measurement of inventory in International Financial Reporting Standards by requiring companies using the first-in, first-out and average costs methods to measure inventory using the lower of cost and net realizable value, where net realizable value is the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The provisions of ASU 2015-11 are effective for annual and interim periods beginning after December 15, 2016. ASU 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company adopted this standard for the interim reporting period ended March 31, 2016. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations.

Note 4 - Investments

Note 4 - Investments	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Cash and Cash Equivalents Disclosure [Text Block]	4. Investments All of the Company’s investments are classified as available-for-sale and are carried at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income, net of related income taxes. The Company held bank certificates of deposit of $22.3 million and $25.8 million at September 30, 2016 and December 31, 2015, respectively. The Company also held corporate debt securities of $2.0 million at December 31, 2015. There were no unrealized gains or losses on the Company’s available-for-sale securities at September 30, 2016 or December 31, 2015.

Note 5 - Fair Value Measurement

Note 5 - Fair Value Measurements	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Fair Value Disclosures [Text Block]	5. Fair Value Measurements Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: (Level 1) observable inputs such as quoted prices in active markets for identical assets or liabilities; (Level 2) significant other observable inputs that are observable either directly or indirectly; and (Level 3) significant unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company records its investments at fair value. The Company’s investments are all classified within Level 2 of the fair value hierarchy. These investments classified within Level 2 of the fair value hierarchy are valued based on matrix pricing compiled by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. The fair value hierarchy of the Company’s cash equivalents and investments at fair value is as follows: Fair Value Measurements at Reporting Date Using September 30, 2016 Quoted Prices in Significant Other Significant Cash equivalents: Money market funds $ 67,299 $ - $ 67,299 $ - Investments: Bank certificates of deposit $ 22,250 $ - $ 22,250 $ - Fair Value Measurements at Reporting Date Using December 31, 2015 Quoted Prices in Significant Other Significant Cash equivalents: Money market funds $ 61,385 $ - $ 61,385 $ - Bank certificates of deposit 250 - 250 - Total cash equivalents $ 61,635 $ - $ 61,635 $ - Investments: Corporate debt securities $ 2,001 $ - $ 2,001 $ - Bank certificates of deposit 25,750 - 25,750 - Total investments $ 27,751 $ - $ 27,751 $ -

Note 6 - Equity Incentive Plan

Note 6 - Equity Incentive Plan	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	6. Equity Incentive Plan The Company estimates the fair value of stock options and stock appreciation rights (“SARs”) using the Black-Scholes valuation model. Fair value of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) are measured by the grant-date price of the Company’s shares. The fair value of each stock option award during the three- and nine-month periods ended September 30, 2016 and 2015, respectively, was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions: Nine Months Ended September 30, 2016 2015 Risk free interest rate 0.94% - 1.40% 1.15% - 1.46% Expected volatility 48.84% - 51.61% 53.15% - 54.65% Expected life (years) 4.5 4.5 Expected dividend yield 0.00% 0.00% The Company recorded $0.8 million and $0.5 million of share-based compensation expense for the three-month periods ended September 30, 2016 and 2015, respectively, for equity compensation awards. The Company recorded $2.3 million and $1.6 million of share-based compensation expense for the nine-month periods ended September 30, 2016 and 2015, respectively, for equity compensation awards. The Company presents the expenses related to stock-based compensation awards in the same expense line items as cash compensation paid to the respective recipients. During the three-month period ended September 30, 2016, the Company granted under the Anika Therapeutics Second Amended and Restated 2003 Stock Option and Incentive Plan (the “Plan”) a total of 60,300 shares of stock options. During the nine-month period ended September 30, 2016, the Company granted under the Plan a total of 392,005 shares of stock options including 46,300 RSAs and 11,805 RSUs. All of the RSUs were granted to directors of the Company and vest over a one-year period. The stock options and RSAs granted to employees generally become exercisable or vest ratably over a four-year period. A portion of the stock options granted during the nine-month period ended September 30, 2016 contained certain performance features, as compared to established targets, in addition to time-based vesting conditions. For performance-based awards with financial achievement targets, the Company recognizes expense using the graded vesting methodology based on the number of shares expected to vest. Compensation cost associated with performance grants is estimated using the Black-Scholes valuation method multiplied by the expected number of shares to be issued, which is adjusted based on the estimated probabilities of achieving the performance goals. Changes to the probability assessment and the estimated shares expected to vest will result in adjustments to the related share-based compensation expense that will be recorded in the period of the change. If the performance targets are not achieved, no compensation cost is recognized and any previously recognized compensation cost is reversed.

Note 7 - Earnings Per Share ("E

Note 7 - Earnings Per Share ("EPS")	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Earnings Per Share [Text Block]	7. Earnings Per Share (“EPS”) Basic EPS is calculated by dividing net income by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic earnings per share. Diluted EPS is calculated by dividing net income by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, SARs, RSAs, and RSUs using the treasury stock method. The following table provides share information used in the calculation of the Company's basic and diluted earnings per share (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Shares used in the calculation of basic earnings per share 14,625 14,967 14,726 14,945 Effect of dilutive securities: Stock options, SARs, RSAs, and RSUs 452 349 437 366 Diluted shares used in the calculation of earnings per share 15,077 15,316 15,163 15,311 Equity awards of 0.3 and 0.4 million shares were outstanding for the three- and nine-month periods ended September 30, 2016, respectively, and were not included in the computation of diluted earnings per share because the awards’ impact on earnings per share was anti-dilutive. Equity awards of 0.2 million shares were outstanding for the three- and nine-month periods ended September 30, 2015 and were not included in the computation of diluted earnings per share because the awards’ impact on earnings per share was anti-dilutive. On February 26, 2016, the Company entered into an accelerated stock repurchase agreement with Morgan Stanley & Co. LLC (“Morgan Stanley”) pursuant to a Fixed Dollar Accelerated Share Repurchase to purchase $25.0 million of shares of its common stock. Pursuant to the terms of the ASR Agreement, the Company paid Morgan Stanley $25.0 million in cash and received an initial delivery of 0.4 million shares of the Company’s common stock on February 29, 2016 based on a closing market price of $46.40 per share and the applicable contractual discount. This On August 26, 2016, the Company settled the approximately $7.5 million remaining under the ASR Agreement, which was recorded as an equity forward sale contract and was included in additional paid-in capital in stockholders' equity in the condensed consolidated balance sheet as it met the criteria for equity accounting. Pursuant to the terms of the ASR Agreement, the final number of shares and the average purchase price was determined at the end of the applicable purchase period, which was August 26, 2016. Based on the volume-weighted average price since the effective date of the ASR Agreement less the applicable contractual discount, Morgan Stanley delivered 0.1 million additional shares to the Company on August 31, 2016. In total, 0.5 million shares were repurchased under the ASR Agreement at an average repurchase price of $47.08 per share. are held by the Company as authorized but unissued shares pursuant to Massachusetts law. The initial and final delivery of shares resulted in immediate reductions of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share.

Note 8 - Inventories

Note 8 - Inventories	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	8. Inventories Inventories consist of the following: September 30, December 31, Raw materials $ 5,840 $ 5,780 Work-in-process 5,844 5,656 Finished goods 6,336 3,502 Total $ 18,020 $ 14,938 Inventories are stated at the lower of cost or net realizable value, with cost being determined using the first-in, first-out method. Work-in-process and finished goods inventories include materials, labor, and manufacturing overhead. Inventory costs associated with product candidates that have not yet received regulatory approval are capitalized if the Company believes there is probable future commercial use and future economic benefit.

Note 9 - Intangible Assets

Note 9 - Intangible Assets	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Goodwill and Intangible Assets Disclosure [Text Block]	9. Intangible Assets In connection with the 2009 acquisition of Anika Therapeutics S.r.l. (“Anika S.r.l.”), the Company acquired various intangible assets and goodwill. The Company evaluated the various intangible assets and related cash flows from these intangible assets, as well as the useful lives and amortization methods related to these intangible assets. The in-process research and development (“IPR&D”) intangible assets initially have indefinite lives and are reviewed periodically to assess the project status, valuation, and disposition, including write-off(s) for abandoned projects. Until such determination is made, they are not amortized. Intangible assets as of September 30, 2016 and December 31, 2015 consist of the following: September 30, 2016 December 31, 2015 Gross Value Accumulated Currency Translation Adjustment Accumulated Amortization Net Book Value Net Book Value Useful Life Developed technology $ 17,100 $ (2,985 ) $ (6,598 ) $ 7,517 $ 7,959 15 In-process research & development 4,406 (1,235 ) - 3,171 3,099 Indefinite Distributor relationships 4,700 (415 ) (4,285 ) - - 5 Patents 1,000 (179 ) (369 ) 452 473 16 Elevess trade name 1,000 - (969 ) 31 125 9 Total $ 28,206 $ (4,814 ) $ (12,221 ) $ 11,171 $ 11,656 The aggregate amortization expense related to intangible assets was $0.3 million for the three-month periods ended September 30, 2016 and 2015, respectively. The aggregate amortization expense related to intangible assets was $0.8 million for the nine-month periods ended September 30, 2016 and 2015.

Note 10 - Goodwill

Note 10 - Goodwill	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Goodwill Disclosure [Text Block]	10. Goodwill Through September 30, 2016, there have not been any events or changes in circumstances that indicate that the carrying value of goodwill may not be recoverable. Changes in the carrying value of goodwill were as follows: Nine Months Ended Twelve Months Ended 2016 2015 Balance, beginning $ 7,482 $ 8,339 Effect of foreign currency adjustments 208 (857 ) Balance, ending $ 7,690 $ 7,482

Note 11 - Accrued Expenses

Note 11 - Accrued Expenses	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Accounts Payable and Accrued Liabilities Disclosure [Text Block]	11. Accrued Expenses Accrued expenses consist of the following: September 30, December 31, Compensation and related expenses $ 2,647 $ 3,082 Facility construction costs 336 415 Research grants 488 381 Professional fees 851 210 Clinical trial costs 333 252 Other 768 438 Total $ 5,423 $ 4,778

Note 12 - Commitments and Conti

Note 12 - Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	12. Commitments and Contingencies In certain of its contracts, the Company warrants to its customers that the products it manufactures conform to the product specifications as in effect at the time of delivery of the specific product. The Company may also warrant that the products it manufactures do not infringe, violate, or breach any U.S. patent or intellectual property right, trade secret, or other proprietary information of any third party. On occasion, the Company contractually indemnifies its customers against any and all losses arising out of, or in any way connected with, any claim or claims of breach of its warranties or any actual or alleged defect in any product caused by the negligent acts or omissions of the Company. The Company maintains a products liability insurance policy that limits its exposure to these risks. Based on the Company’s historical activity, in combination with its liability insurance coverage, the Company believes the estimated fair value of these indemnification agreements is immaterial. The Company had no accrued warranties at September 30, 2016 or December 31, 2015, respectively, and has no history of claims paid. The Company is also involved in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, the Company does not expect the resolution of these legal proceedings to have a material adverse effect on its financial position, results of operations, or cash flow.

Note 13 - Leases

Note 13 - Leases	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Leases of Lessee Disclosure [Text Block]	13. Leases On October 9, 2015, Anika S.r.l. entered into a build-to-suit lease agreement with Consorzio Zona Industriale E Porto Fluviale di Padova (“ZIP”), as landlord, pursuant to which Anika S.r.l. will lease a new European headquarters facility, consisting of approximately 33,000 square feet of general office, research and development, training, and warehousing space located in Padova, Italy. The lease has an initial term of fifteen years, which is expected to commence during the first quarter of 2017 once construction of the facility is completed. The lease will automatically renew for up to three additional six-year terms, subject to certain terms and conditions. The Company has the ability to withdraw from this lease subject to certain financial penalties after six years and with no penalties after the ninth year. Beginning on the commencement date, the lease provides for an initial yearly rent of approximately $0.4 million. Construction of the new facility began in the first quarter of 2016 and is expected to be completed in early 2017. During the period of construction the Company is considered the deemed owner of the facility. Accordingly, the landlord's costs of constructing the facility are required to be capitalized, as a non-cash transaction, offset by a corresponding facility lease obligation in the Company’s consolidated balance sheet. As of September 30, 2016, the Company has recorded a construction-in-process asset of approximately $2.4 million. This includes $1.9 million incurred by ZIP for the construction of the new facility, which was recorded as a facility lease obligation within other long-term liabilities on the balance sheet.

Note 14 - Income Taxes

Note 14 - Income Taxes	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	14. Income Taxes Provisions for income taxes were $4.8 million and $13.6 million for the three- and nine-month periods ended September 30, 2016, based on effective tax rates of 35.0% and 35.8%, respectively. Provisions for income taxes were $4.8 million and $11.4 million for the three- and nine-month periods ended September 30, 2015, based on effective tax rates of 36.4% and 36.7%, respectively. The increase in income taxes for the nine-month period ended September 30, 2016 resulted from higher income before income taxes as compared to the same periods in the prior year. The net decrease in the effective tax rate for the three- and nine-month periods ended September 30, 2016, as compared to the same periods in 2015, The Company files income tax returns in the United States on a federal basis, in certain U.S. states, and in Italy. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The Company’s filings from 2013 In connection with the preparation of the financial statements, the Company performed an analysis to ascertain if it was more likely than not that it would be able to utilize, in future periods, the net deferred tax assets associated with its net operating loss carryforward. The Company concluded that the positive evidence outweighs the negative evidence and, thus, those deferred tax assets are realizable on a “more likely than not” basis. As such, the Company did not record a valuation allowance at September 30, 2016 or December 31, 2015.

Note 15 - Segment and Geographi

Note 15 - Segment and Geographic Information	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	15. Segment and Geographic Information The Company has one reportable operating segment, for the purposes of assessing performance and deciding how to allocate resources. Product revenue by product group is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Orthobiologics $ 22,428 $ 20,461 $ 65,319 $ 51,717 Surgical 1,173 1,413 3,924 4,450 Dermal 594 412 1,558 1,132 Other 1,588 1,390 3,835 4,790 Product Revenue $ 25,783 $ 23,676 $ 74,636 $ 62,089 Total revenue by geographic location and as a percentage of overall total revenue for the three- and nine-month periods ended September 30, 2016 and 2015 are as follows: Three Months Ended September 30, 2016 2015 Total Percentage of Total Percentage of Geographic Location: United States $ 21,126 82 % $ 19,239 81 % Europe 2,703 10 % 1,977 8 % Other 1,960 8 % 2,465 11 % Total Revenue $ 25,789 100 % $ 23,681 100 % Nine Months Ended September 30, 2016 2015 Total Percentage of Total Percentage of Geographic Location: United States $ 61,032 82 % $ 51,048 82 % Europe 8,240 11 % 6,294 10 % Other 5,381 7 % 4,763 8 % Total Revenue $ 74,653 100 % $ 62,105 100 %

Note 5 - Fair Value Measureme21

Note 5 - Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Fair Value, Assets Measured on Recurring Basis [Table Text Block]	Fair Value Measurements at Reporting Date Using September 30, 2016 Quoted Prices in Significant Other Significant Cash equivalents: Money market funds $ 67,299 $ - $ 67,299 $ - Investments: Bank certificates of deposit $ 22,250 $ - $ 22,250 $ - Fair Value Measurements at Reporting Date Using December 31, 2015 Quoted Prices in Significant Other Significant Cash equivalents: Money market funds $ 61,385 $ - $ 61,385 $ - Bank certificates of deposit 250 - 250 - Total cash equivalents $ 61,635 $ - $ 61,635 $ - Investments: Corporate debt securities $ 2,001 $ - $ 2,001 $ - Bank certificates of deposit 25,750 - 25,750 - Total investments $ 27,751 $ - $ 27,751 $ -

Note 6 - Equity Incentive Plan

Note 6 - Equity Incentive Plan (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	Nine Months Ended September 30, 2016 2015 Risk free interest rate 0.94% - 1.40% 1.15% - 1.46% Expected volatility 48.84% - 51.61% 53.15% - 54.65% Expected life (years) 4.5 4.5 Expected dividend yield 0.00% 0.00%

Note 7 - Earnings Per Share (23

Note 7 - Earnings Per Share ("EPS") (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Shares used in the calculation of basic earnings per share 14,625 14,967 14,726 14,945 Effect of dilutive securities: Stock options, SARs, RSAs, and RSUs 452 349 437 366 Diluted shares used in the calculation of earnings per share 15,077 15,316 15,163 15,311

Note 8 - Inventories (Tables)

Note 8 - Inventories (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	September 30, December 31, Raw materials $ 5,840 $ 5,780 Work-in-process 5,844 5,656 Finished goods 6,336 3,502 Total $ 18,020 $ 14,938

Note 9 - Intangible Assets (Tab

Note 9 - Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Table Text Block]	September 30, 2016 December 31, 2015 Gross Value Accumulated Currency Translation Adjustment Accumulated Amortization Net Book Value Net Book Value Useful Life Developed technology $ 17,100 $ (2,985 ) $ (6,598 ) $ 7,517 $ 7,959 15 In-process research & development 4,406 (1,235 ) - 3,171 3,099 Indefinite Distributor relationships 4,700 (415 ) (4,285 ) - - 5 Patents 1,000 (179 ) (369 ) 452 473 16 Elevess trade name 1,000 - (969 ) 31 125 9 Total $ 28,206 $ (4,814 ) $ (12,221 ) $ 11,171 $ 11,656

Note 10 - Goodwill (Tables)

Note 10 - Goodwill (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Goodwill [Table Text Block]	Nine Months Ended Twelve Months Ended 2016 2015 Balance, beginning $ 7,482 $ 8,339 Effect of foreign currency adjustments 208 (857 ) Balance, ending $ 7,690 $ 7,482

Note 11 - Accrued Expenses (Tab

Note 11 - Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Accrued Liabilities [Table Text Block]	September 30, December 31, Compensation and related expenses $ 2,647 $ 3,082 Facility construction costs 336 415 Research grants 488 381 Professional fees 851 210 Clinical trial costs 333 252 Other 768 438 Total $ 5,423 $ 4,778

Note 15 - Segment and Geograp28

Note 15 - Segment and Geographic Information (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Orthobiologics $ 22,428 $ 20,461 $ 65,319 $ 51,717 Surgical 1,173 1,413 3,924 4,450 Dermal 594 412 1,558 1,132 Other 1,588 1,390 3,835 4,790 Product Revenue $ 25,783 $ 23,676 $ 74,636 $ 62,089
Schedule of Revenue and Operating Income by Geographical Areas [Table Text Block]	Three Months Ended September 30, 2016 2015 Total Percentage of Total Percentage of Geographic Location: United States $ 21,126 82 % $ 19,239 81 % Europe 2,703 10 % 1,977 8 % Other 1,960 8 % 2,465 11 % Total Revenue $ 25,789 100 % $ 23,681 100 % Nine Months Ended September 30, 2016 2015 Total Percentage of Total Percentage of Geographic Location: United States $ 61,032 82 % $ 51,048 82 % Europe 8,240 11 % 6,294 10 % Other 5,381 7 % 4,763 8 % Total Revenue $ 74,653 100 % $ 62,105 100 %

Note 4 - Investments (Details T

Note 4 - Investments (Details Textual) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Certificates of Deposit [Member]
Available-for-sale Securities	$ 22,300,000	$ 25,800,000
Corporate Debt Securities [Member]
Available-for-sale Securities		2,000,000
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax	$ 0	$ 0

Note 5 - Fair Value of Financia

Note 5 - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Cash equivalents	$ 67,299	$ 61,385
Money Market Funds [Member]
Cash equivalents	67,299	61,385
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Cash equivalents		250
Investments	22,250	25,750
Certificates of Deposit [Member]
Cash equivalents		250
Investments	22,250	25,750
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Investments		2,001
Corporate Debt Securities [Member]
Investments		2,001
Fair Value, Inputs, Level 2 [Member]
Cash equivalents		61,635
Investments		27,751
Cash equivalents		61,635
Investments	$ 22,250	$ 27,751

Note 6 - Equity Incentive Pla31

Note 6 - Equity Incentive Plan (Details Textual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Restricted Stock [Member] | Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			46,300
Restricted Stock and Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 0.8	$ 0.5	$ 2.3	$ 1.6
Employee Stock Option [Member] | Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	60,300		392,005
Restricted Stock Units (RSUs) [Member] | Plan [Member] | Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			11,805
Restricted Stock Units (RSUs) [Member] | Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			1 year

Note 6 - Assumptions Used to Es

Note 6 - Assumptions Used to Estimate Fair Value of Stock Options and Stock Appreciation Rights Awards (Details)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Minimum [Member]
Risk free interest rate	0.94%	1.15%
Expected volatility	48.84%	53.15%
Maximum [Member]
Risk free interest rate	1.40%	1.46%
Expected volatility	51.61%	54.65%
Expected life (years)	4 years 182 days	4 years 182 days
Expected dividend yield	0.00%	0.00%

Note 7 - Earnings Per Share (33

Note 7 - Earnings Per Share ("EPS") (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	Aug. 31, 2016	Feb. 29, 2016	Feb. 26, 2016	Sep. 30, 2016	Sep. 30, 2015	Aug. 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Aug. 26, 2016
Accelerated Stock Repurchase [Member] | Morgan Stanley & Co., LLC [Member] | Common Stock [Member]
Stock Repurchase Program, Authorized Amount			$ 25,000
Accelerated Share Repurchases, Initial Price Paid Per Share		$ 46.40
Stock Repurchase Program, Percentage Repurchased		70.00%
Accelerated Share Repurchases, Settlement (Payment) or Receipt									$ 7,500
Accelerated Share Repurchases, Final Price Paid Per Share						$ 47.08
Accelerated Stock Repurchase [Member] | Morgan Stanley & Co., LLC [Member]
Payments for Repurchase of Common Stock			$ 25,000
Stock Repurchased and Retired During Period, Shares	0.1	0.4				0.5
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount				300,000	200,000		400,000	200,000
Payments for Repurchase of Common Stock							$ 25,000

Note 7 - Basic and Diluted Earn

Note 7 - Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Shares used in the calculation of basic earnings per share (in shares)	14,625	14,967	14,726	14,945
Effect of dilutive securities:
Stock options, SARs, RSAs, and RSUs (in shares)	452	349	437	366
Diluted shares used in the calculation of earnings per share (in shares)	15,077	15,316	15,163	15,311

Note 8 - Inventories (Details)

Note 8 - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Raw materials	$ 5,840	$ 5,780
Work-in-process	5,844	5,656
Finished goods	6,336	3,502
Total	$ 18,020	$ 14,938

Note 9 - Intangible Assets (Det

Note 9 - Intangible Assets (Details Textual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Amortization of Intangible Assets	$ 0.3	$ 0.3	$ 0.8	$ 0.8

Note 9 - Intangible Assets (D37

Note 9 - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Sep. 30, 2016
Developed Technology Rights [Member]
Gross Value		$ 17,100
Accumulated Currency Translation Adjustment		(2,985)
Accumulated Amortization		(6,598)
Intangible assets, net	$ 7,959	7,517
Useful Life	15 years
In Process Research and Development [Member]
Gross Value		4,406
Accumulated Currency Translation Adjustment		(1,235)
Intangible assets, net	$ 3,099	3,171
Distribution Rights [Member]
Gross Value		4,700
Accumulated Currency Translation Adjustment		(415)
Accumulated Amortization		(4,285)
Useful Life	5 years
Patents [Member]
Gross Value		1,000
Accumulated Currency Translation Adjustment		(179)
Accumulated Amortization		(369)
Intangible assets, net	$ 473	452
Useful Life	16 years
Elevess Trade Name [Member]
Gross Value		1,000
Accumulated Amortization		(969)
Intangible assets, net	$ 125	31
Useful Life	9 years
Gross Value		28,206
Accumulated Currency Translation Adjustment		(4,814)
Accumulated Amortization		(12,221)
Intangible assets, net	$ 11,656	$ 11,171

Note 10 - Changes in the Carryi

Note 10 - Changes in the Carrying Value of Goodwill (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Balance	$ 7,482	$ 8,339
Effect of foreign currency adjustments	208	(857)
Balance	$ 7,690	$ 7,482

Note 11 - Accrued Expenses (Det

Note 11 - Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Compensation and related expenses	$ 2,647	$ 3,082
Facility construction costs	336	415
Research grants	488	381
Professional fees	851	210
Clinical trial costs	333	252
Other	768	438
Total	$ 5,423	$ 4,778

Note 12 - Commitments and Con40

Note 12 - Commitments and Contingencies (Details Textual) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Standard and Extended Product Warranty Accrual	$ 0	$ 0

Note 13 - Leases (Details Textu

Note 13 - Leases (Details Textual) - European Headquarters Facility [Member] $ in Millions	Oct. 09, 2015ft²	Sep. 30, 2016USD ($)
Area of Real Estate Property | ft²	33,000
Lessee Leasing Arrangements, Term of Contract	15 years
Lessee Leasing Arrangements, Number of Renewal Terms	3
Lessee Leasing Arrangements, Renewal Term	6 years
Lessee Leasing Arrangements Ability to Withdraw With Penalty	6 years
Lessee Leasing Arrangements Ability to Withdrawn Without Penalty	9 years
Lessee Leasing Arrangements Initial Yearly Rent		$ 0.4
Construction in Progress, Gross		2.4
Build-to-suit Lease Agreement, Offsetting Facility Lease Obligation		$ 1.9

Note 14 - Income Taxes (Details

Note 14 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Foreign Tax Authority [Member] | Ministry of Economic Affairs and Finance, Italy [Member] | Earliest Tax Year [Member]
Open Tax Year			2,010
Income Tax Expense (Benefit)	$ 4,830,000	$ 4,789,000	$ 13,619,000	$ 11,435,000
Effective Income Tax Rate Reconciliation, Percent	35.00%	36.40%	35.80%	36.70%
Deferred Tax Assets, Valuation Allowance	$ 0		$ 0		$ 0

Note 15 - Segment and Geograp43

Note 15 - Segment and Geographic Information (Details Textual)	9 Months Ended
	Sep. 30, 2016
Number of Reportable Segments	1

Note 15 - Product Revenue by Pr

Note 15 - Product Revenue by Product Group (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Orthobiologics [Member]
Product revenue	$ 22,428	$ 20,461	$ 65,319	$ 51,717
Surgical [Member]
Product revenue	1,173	1,413	3,924	4,450
Dermal [Member]
Product revenue	594	412	1,558	1,132
Other [Member]
Product revenue	1,588	1,390	3,835	4,790
Product revenue	$ 25,783	$ 23,676	$ 74,636	$ 62,089

Note 15 - Total Revenue by Geog

Note 15 - Total Revenue by Geographic Location (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
UNITED STATES
Total Revenue	$ 21,126	$ 19,239	$ 61,032	$ 51,048
Percentage of Revenue	82.00%	81.00%	82.00%	82.00%
Europe [Member]
Total Revenue	$ 2,703	$ 1,977	$ 8,240	$ 6,294
Percentage of Revenue	10.00%	8.00%	11.00%	10.00%
Other Location [Member]
Total Revenue	$ 1,960	$ 2,465	$ 5,381	$ 4,763
Percentage of Revenue	8.00%	11.00%	7.00%	8.00%
Total Revenue	$ 25,789	$ 23,681	$ 74,653	$ 62,105
Percentage of Revenue	100.00%	100.00%	100.00%	100.00%