Anika Therapeutics Reports First-Quarter Fiscal 2007 Financial Results
EPS and Net Income Increase 36%
WOBURN, Mass., April 26 /PRNewswire-FirstCall/ -- Anika Therapeutics, Inc.
(Nasdaq: ANIK) today reported financial results for the first quarter ended
March 31, 2007.
Revenue
Anika reported product revenue of $5,374,000 for the first quarter of
2007, compared with $6,266,000 in the same period last year. U.S. ORTHOVISC
revenue increased 159% in the quarter compared with last year's first quarter,
offsetting a decline in international sales primarily related to the
previously announced change in the Turkish government's reimbursement policy
for more than 100 drugs, including ORTHOVISC(R). The timing of orders
adversely affected revenue in the Ophthalmic business, which declined 22% in
the first quarter of 2007 over the same period in 2006. HYVISC revenue for
the first quarter decreased 37%, also due to order timing, but is expected to
rebound in future quarters. Licensing, milestone and contract revenue for the
first quarter of 2007 was $764,000, compared with $687,000 in the first
quarter of 2006. Total revenue for the first quarter of 2007 was $6,138,000,
compared with $6,953,000 in the first quarter of 2006.
Product Gross Margin
Product gross margin for the first quarter of 2007 increased to 53.6% from
51.4% in last year's first quarter. The increase in product gross margin is
due primarily to raw material price reductions and a more favorable product
mix.
Net Income
Net income for the first quarter of 2007 was $1,201,000, or $0.11 per
diluted share, compared with $881,000, or $0.08 per diluted share, for the
same period last year. The increase in net income in the first quarter of
2007 was due to higher gross margin, lower operating expenses, and a more
favorable tax rate compared with last year's first quarter.
Operating Expenses
Total operating expenses excluding cost of product revenue were $2,422,000
for the first quarter of 2007, compared with $2,866,000 for the first quarter
of 2006. The savings reflects lower expenditures this quarter in the final
phase of our European study on ELEVESS, as well as legal fees incurred in last
year's first quarter related to the Galderma agreement.
Anika's cash, cash equivalents and short-term investments at March 31,
2007 were $47,300,000, compared with $47,200,000 at December 31, 2006. The
company has no short- or long-term debt.
First-Quarter Highlights and Outlook
"We made important progress in a number of key areas during the first
quarter of 2007," said Charles H. Sherwood, Ph.D., Anika's president and chief
executive officer. "The quarter was highlighted by regulatory approvals of
ELEVESS(TM), our injectable soft-tissue filler for facial wrinkles, scar
remediation and lip augmentation. ELEVESS was approved in January in Canada
and earlier this month we received the CE Mark for commercial sales in Europe.
Receiving CE Mark approval is a major milestone in our commercialization
efforts with Galderma, our worldwide distribution partner for ELEVESS and the
world's leading dermatology company. We currently are awaiting U.S. approval
of ELEVESS and expect a worldwide launch in the second half of this year."
"We also made progress with our joint health franchise during the
quarter," added Sherwood. "U.S. sales of ORTHOVISC increased significantly
over the first quarter of 2006 as our partner Mitek began capitalizing on the
unique reimbursement code we received for the product. Lower international
sales offset the domestic increase as we continue to face headwinds resulting
from last year's change in reimbursement policy in Turkey. We are hopeful
that new international distribution agreements, such as those that we signed
in the first quarter in Hungary and Switzerland, as well as product
registrations in process in India, Saudi Arabia, Mexico, Brazil, and
Venezuela, will begin to contribute to revenue by year end. However, we
expect overall international ORTHOVISC sales in 2007 to be lower than 2006."
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"We continued to make strides in our joint health clinical and product
development activities, including the study we began with Mitek in the fourth
quarter of 2006 to evaluate ORTHOVISC as a treatment for osteoarthritis pain
in the shoulder joint," said Sherwood. "The majority of our clinical sites
are now operational and enrolling patients."
"Looking forward, we are focused on the execution of our strategy and the
accomplishment of several key milestones for 2007. These include receiving
U.S. approval for ELEVESS and launching the product globally with our partner
Galderma Pharma, achieving significant growth in ORTHOVISC sales year-over-
year, receiving approval to market our first single-injection osteoarthritis
product in Europe, concluding enrollment in the clinical trial of ORTHOVISC
for osteoarthritis of the shoulder, and making progress on our relocation to a
larger, consolidated facility," concluded Sherwood.
Conference Call Information
The company will hold a conference call to review its financial results
and business highlights on Friday, April 27, 2007, at 9:00 a.m. ET. In
addition, the company may address during the conference call its business and
financial developments and trends, including those involving product lines and
business partners, and other business and financial matters affecting the
company, which may contain information that has not been previously disclosed.
To listen to the conference call, dial 800-706-7749 (International callers use
617-614-3474) and use the passcode 47268523. Please call approximately 10
minutes before the starting time and reference Anika Therapeutics. In
addition, the conference call will be available to interested parties through
a live audio Internet broadcast at http://www.anikatherapeutics.com. The call
will be archived and accessible on the same website shortly after the
conclusion of the call.
About Anika Therapeutics, Inc.
Headquartered in Woburn, Mass., Anika Therapeutics, Inc.
(http://www.anikatherapeutics.com) 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 products include
ORTHOVISC(R), a treatment for osteoarthritis of the knee available
internationally and marketed in the U.S. by DePuy Mitek and HYVISC(R), a
treatment for equine osteoarthritis marketed in the U.S. by Boehringer
Ingelheim Vetmedica, Inc. Anika develops and manufactures Amvisc(R) and
Amvisc Plus(R), HA viscoelastic products for ophthalmic surgery. It also
produces STAARVISC(TM)-II, which is distributed by STAAR Surgical Company and
Shellgel(TM) for Cytosol Ophthalmics, Inc.
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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 and Section 21E of the Securities Exchange
Act of 1934, including, without limitation, statements that may be identified
by words such as "expectations," "remains," "focus," "expected,"
"prospective," "expanding," "building," "continue," "progress," "plan,"
"efforts," "hope," "believe," "objectives," "opportunities," "will," "seek,"
and other expressions which are predictions of or indicate future events and
trends and which do not constitute historical matters identify forward-looking
statements. These statements also include statements regarding: (i) the
company's expectations regarding its cosmetic tissue augmentation products,
ELEVESS, (ii) its goal to obtain U.S. marketing approval for ELEVESS(TM) and
its expectations regarding a worldwide launch, (iii) international sales of
ORTHOVISC(R) and the impact on ORTHOVISC sales from international distribution
agreements and product registrations around the world, and (iv) prospects for
domestic and international ORTHOVISC sales, market approvals and clinical
enrollments. 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 clinical
data to support a pre-market approval application and/or FDA approval, and/or
receive FDA or other regulatory approvals of its products, or that such
approvals will not be obtained in a timely manner or without the need for
additional clinical trials; (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 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 or (v) future determinations by the company to
allocate resources to products and in directions not presently contemplated.
Any delay in receiving any regulatory approvals may adversely affect the
company's competitive position. Even if regulatory approvals are obtained,
there is a risk that meaningful sales of the products may not be achieved.
There is also a risk that (i) the company's existing distributors (including
its distributor in Turkey) or customers will not continue to place orders at
historical levels or that any of them will seek to modify or terminate
existing arrangements, (ii) the company's efforts to enter into long-term
marketing and distribution arrangements, including with new international
distributors for ORTHOVISC, will not be successful, (iii) new distribution
arrangements, including the agreement with Galderma Pharma S.A. pertaining to
its ELEVESS(TM) product, will not result in meaningful sales of the company's
products, (iv) the company will be unable to achieve performance and sales
threshold milestones in its distribution agreements, (v) competitive products
will adversely impact the company's product sales, (vi) the estimated size(s)
of the markets which the company has targeted its products will fail to be
achieved, (vii) lack of adequate coverage and reimbursement provided by
governments and other third party payers for our products and services,
including non-reimbursement of ORTHOVISC in Turkey, could have a material
adverse effect on our results of operations, or (viii) increased sales of the
company's products, including HYVISC(R), ORTHOVISC , or its ophthalmic
products, will not continue or sales will decrease or not reach historical
sales levels, or even if such increases occur that such increases will improve
gross margins, any of which may have a material adverse effect on the
company's business and operations. 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 each of the company's Annual Report on
Form 10-K for the year ended December 31, 2006 and Current Reports on Form 8-
K, as well as those described in the company's other press releases and SEC
filings.
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Anika Therapeutics, Inc. and Subsidiary
Consolidated Statements of Operations
(unaudited)
Quarter Ended
March 31,
2007 2006
Product revenue $5,374,038 $6,265,833
Licensing, milestone and contract
revenue 764,008 687,127
Total revenue 6,138,046 6,952,960
Operating expenses:
Cost of product revenue 2,492,922 3,047,818
Research & development 847,341 1,076,792
Selling, general & administrative 1,575,050 1,788,999
Total operating expenses 4,915,313 5,913,609
Income from operations 1,222,733 1,039,351
Interest income, net 566,777 461,074
Income before income taxes 1,789,510 1,500,425
Provision for income taxes 588,733 619,676
Net income $1,200,777 $880,749
Basic net income per share:
Net income $0.11 $0.08
Basic weighted average common shares
outstanding 10,878,448 10,526,672
Diluted net income per share:
Net income $0.11 $0.08
Diluted weighted average common shares
outstanding 11,281,322 11,218,360
Anika Therapeutics, Inc. and Subsidiary
Consolidated Balance Sheets
(unaudited)
March 31, December 31,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $43,780,878 $47,167,432
Short term investment 3,522,770 --
Accounts receivable, net 3,007,419 3,509,508
Inventories 5,983,632 5,395,596
Current portion deferred income taxes 1,312,901 1,312,901
Prepaid expenses and other receivables 469,051 220,445
Total current assets 58,076,651 57,605,882
Property and equipment, at cost 13,914,258 13,255,240
Less: accumulated depreciation (10,398,890) (10,237,232)
3,515,368 3,018,008
Long-term deposits and other 399,300 193,050
Deferred income taxes 7,437,020 7,296,689
Total Assets $69,428,339 $68,113,629
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $1,091,375 $965,180
Accrued expenses 1,115,208 1,573,835
Deferred revenue 2,899,969 2,905,099
Income taxes payable 304,224 17,253
Other long-term liabilities 65,661 64,525
Long-term deferred revenue 16,399,712 17,099,712
Total liabilities 21,876,149 22,625,604
Stockholders' equity
Preferred stock -- --
Common stock 109,489 107,727
Additional paid-in-capital 38,124,394 37,262,768
Retained earnings 9,318,307 8,117,530
Total stockholders' equity 47,552,190 45,488,025
Total Liabilities and Stockholders'
Equity $69,428,339 $68,113,629
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Anika Therapeutics, Inc. and Subsidiary
Supplemental Financial Data -
(unaudited)
Product Gross Margin and Revenue by Product Line
Quarter Ended
March 31,
2007 % Ttl 2006 % Ttl
Ophthalmic Products $2,285,121 43% $2,937,170 47%
ORTHOVISC 2,643,297 49% 2,641,423 42%
HYVISC 428,925 8% 687,240 11%
INCERT 16,695 0% -- 0%
$5,374,038 100% $6,265,833 100%
Product gross profit $2,881,116 $3,218,015
Product gross margin 54% 51%
Product Revenue by Geography
Quarter Ended
March 31,
2007 % Ttl 2006 % Ttl
Domestic $4,217,681 78% $3,900,824 62%
International 1,156,357 22% 2,365,009 38%
$5,374,038 100% $6,265,833 100%
CONTACTS:
Charles H. Sherwood, Ph.D., CEO
Kevin W. Quinlan, CFO
Anika Therapeutics, Inc.
(781) 932-6616
SOURCE Anika Therapeutics, Inc.
-0- 04/26/2007
/CONTACT: Charles H. Sherwood, Ph.D., CEO, or Kevin W. Quinlan, CFO,
+1-781-932-6616, both of Anika Therapeutics, Inc./
/Web site: http://www.anikatherapeutics.com /