Exhibit 99.1
Anika Therapeutics Reports Second-Quarter Fiscal 2007 Financial Results
ORTHOVISC Domestic Revenue Increases 66%;
Product Revenue Increases 18% Sequentially
WOBURN, Mass.--(BUSINESS WIRE)--July 24, 2007--Anika Therapeutics,
Inc. (Nasdaq: ANIK) today reported financial results for the second
quarter ended June 30, 2007.
Revenue
Anika reported product revenue of $6,332,000 for the second
quarter of 2007 compared with $7,115,000 in the year ago period.
Product revenue for the first six months of 2007 was $11,706,000
compared with $13,381,000 in the first six months of 2006. The decline
in product revenue was due to the change in the Turkish government's
reimbursement policy previously announced in October 2006. This
resulted in a loss of ORTHOVISC(R) sales during the second half of
2006, and through May of 2007. ORTHOVISC sales in Turkey were $2.4
million and $3.8 million for the second quarter and first half of
2006, respectively.
U.S. ORTHOVISC revenue increased 66% in the quarter, compared with
last year's second quarter, fueled primarily by the unique
reimbursement code assigned to ORTHOVISC in January and an increased
number of Mitek sales specialists. Three- and six-month international
sales of ORTHOVISC were lower in 2007 versus the same periods in 2006
primarily due to the impact of Turkish sales.
Revenue in the ophthalmic business increased 14% in the second
quarter of 2007 compared with the second quarter of 2006. Anika also
reported strong HYVISC(R) revenue, which increased 215% year over year
to $701,000 in the second quarter.
During the three and six months ending June 30, 2007, licensing,
milestone and contract revenue was $768,000 and $1,532,000,
respectively, compared with $683,000 and $1,370,000 in the prior year
periods.
Total revenue for the second quarter of 2007 was $7,100,000
compared with $7,798,000 in the second quarter of 2006. Total revenue
for the first six months of 2007 was $13,238,000 compared with
$14,751,000 in the first six months of 2006.
Product Gross Margin
Product gross margin for the second quarter of 2007 was 52%
compared with 59% in the second quarter of 2006. For the first six
months of 2007, product gross margin was 53% compared with 56% for the
six month period in 2006. The decline in product gross margin for both
periods is due primarily to product mix and timing of orders in both
years. The company currently expects product gross margin to be higher
in the second half of 2007, and for the full year 2007 gross margin to
be comparable to full year 2006.
Operating Expenses
Total operating expenses, excluding cost of product revenue, were
$2,712,000 for the second quarter of 2007 compared with $3,106,000 for
the second quarter of 2006. Total operating expenses, excluding cost
of product revenue, for the first six months of 2007 were $5,135,000
compared with $5,972,000 for the first six months of 2006. Operating
expenses for both 2007 periods were lower than their respective 2006
periods due to higher clinical trial costs incurred in 2006 related to
an ELEVESS European study, as well as legal costs incurred to complete
the distribution agreement signed with Galderma in mid-2006.
Net Income
Net income for the second quarter of 2007 was $1,365,000, or $0.12
per diluted share, compared with $1,352,000, or $0.12 per diluted
share, for the same period last year. Net income for the six month
period of 2007 was $2,566,000, or $0.23 per share, compared with
$2,233,000, or $0.20 per diluted share, for the first six months of
2006. The modest improvement in net income resulted despite lower
revenue and gross margins in both the second quarter and six month
periods due to lower operating expenses, higher interest income, and a
lower effective tax rate. The lower tax rate reflects higher state
investment tax credits as a result of the Anika's ongoing investment
in a new facility.
Other
Anika's cash, cash equivalents and short-term investments at June
30, 2007 were $48,267,000 compared with $47,167,000 at December 31,
2006.
Second-Quarter Highlights and Outlook
"The U.S. and European approval of our new cosmetic dermatology
product, ELEVESS(TM), a 66% second quarter increase in U.S. ORTHOVISC
revenues, rebound in ophthalmic revenue, and strong veterinary sales
punctuated a successful second quarter," said Charles H. Sherwood,
Ph.D., Anika's president and chief executive officer. "This
contributed to second-quarter 2007 product revenue increasing 18% over
the sequential first quarter."
"ORTHOVISC unit sales in the U.S. more than doubled during the
second quarter and first half of 2007, continuing the positive trend
we saw last quarter and all of last year," added Sherwood. "We are
encouraged by the response physicians are having to ORTHOVISC after
the receipt of the product's new reimbursement code in January and the
addition of Mitek sales specialists. Internationally, the resumption
of modest shipments to Turkey should make future quarterly comparisons
of ORTHOVISC sales favorable as we work to rebuild our sales outside
the U.S."
"Our plans for the ORTHOVISC franchise in the second half of 2007
include targeting increased sales, both domestically and
internationally, by expanding our product portfolio and seeking new
international distribution partners," said Sherwood. "We also are
focused on receiving approval to market our first single-injection
osteoarthritis product in Europe by the end of the year."
"Receiving FDA approval of ELEVESS is truly a milestone
achievement in our commercialization efforts with Galderma Pharma,"
added Sherwood. "We are now positioned to benefit from the rapid
growth in the global market for cosmetic fillers and we expect
Galderma to launch ELEVESS worldwide in the second half of this year."
Conference Call Information
The company will hold a conference call to review its financial
results and business highlights on Wednesday, July 25, 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 800-901-5259 (International callers use
617-786-4514) and use the passcode 56481863. 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
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. 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 include ORTHOVISC(R), a
treatment for osteoarthritis of the knee available internationally and
marketed in the U.S. by DePuy Mitek; HYVISC(R), a treatment for equine
osteoarthritis marketed in the U.S. by Boehringer Ingelheim Vetmedica,
Inc.; and the ELEVESS(TM) family of cosmetic dermatology products for
facial wrinkles, scar remediation and lip augmentation, which will be
marketed by Galderma Pharma. Anika also 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.
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
dermatology product, ELEVESS(TM), including its expectations regarding
a worldwide launch by Galderma, (ii) product gross margin (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, and (v)
statements made under the heading Second-Quarter Highlights and
Outlook. 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 on Form 10-Q for the period ended March 31, 2007, as well
as those described in the company's other press releases and SEC
filings.
Anika Therapeutics, Inc. and Subsidiary
Consolidated Statements of Operations
(unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
--------------------- -----------------------
2007 2006 2007 2006
---------- ---------- ----------- -----------
Product revenue $6,331,966 $7,115,484 $11,706,004 $13,381,318
Licensing, milestone and
contract revenue 767,596 682,557 1,531,604 1,369,684
---------- ---------- ----------- -----------
Total revenue 7,099,562 7,798,041 13,237,608 14,751,002
Operating expenses:
Cost of product
revenue 3,023,781 2,890,904 5,516,703 5,938,722
Research &
development 996,051 1,129,877 1,843,392 2,206,669
Selling, general &
administrative 1,716,099 1,976,600 3,291,149 3,765,599
---------- ---------- ----------- -----------
Total operating
expenses 5,735,931 5,997,381 10,651,244 11,910,990
---------- ---------- ----------- -----------
Income from operations 1,363,631 1,800,660 2,586,364 2,840,012
Interest income, net 575,831 489,772 1,142,608 950,846
---------- ---------- ----------- -----------
Income before income
taxes 1,939,462 2,290,432 3,728,972 3,790,858
Provision for income
taxes 574,611 938,367 1,163,344 1,558,043
---------- ---------- ----------- -----------
Net income $1,364,851 $1,352,065 $2,565,628 $2,232,815
========== ========== =========== ===========
Basic net income per
share:
Net income $0.12 $0.13 $0.23 $0.21
Basic weighted average
common shares
outstanding 11,018,053 10,601,336 10,949,629 10,564,902
Diluted net income per
share:
Net income $0.12 $0.12 $0.23 $0.20
Diluted weighted
average common shares
outstanding 11,376,673 10,955,156 11,342,280 10,969,569
Anika Therapeutics, Inc. and Subsidiary
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
2007 2006
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $44,751,227 $47,167,432
Short term investment 3,515,949 --
Accounts receivable, net 6,751,264 3,509,508
Inventories 5,537,691 5,395,596
Current portion deferred income taxes 1,312,901 1,312,901
Prepaid expenses and other receivables 427,665 220,445
------------ ------------
Total current assets 62,296,697 57,605,882
Property and equipment, at cost 16,054,707 13,255,240
Less: accumulated depreciation (10,573,883) (10,237,232)
------------ ------------
5,480,824 3,018,008
Long-term deposits and other 399,300 193,050
Deferred income taxes 7,484,459 7,296,689
------------ ------------
Total Assets $75,661,280 $68,113,629
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $2,616,131 $965,180
Accrued expenses 1,496,690 1,573,835
Deferred revenue 3,135,718 2,905,099
Income taxes payable 264,257 17,253
Other long-term liabilities 305,195 64,525
Long-term deferred revenue 17,499,712 17,099,712
------------ ------------
Total liabilities 25,317,703 22,625,604
Stockholders' equity
Preferred stock -- --
Common stock 111,287 107,727
Additional paid-in-capital 39,549,132 37,262,768
Retained earnings 10,683,158 8,117,530
------------ ------------
Total stockholders' equity 50,343,577 45,488,025
------------ ------------
Total Liabilities and Stockholders' Equity $75,661,280 $68,113,629
============ ============
Anika Therapeutics, Inc. and Subsidiary
Supplemental Financial Data -
(unaudited)
Product Gross Margin and Revenue by Product Line
Quarter Ended
June 30,
--------------------------------
% %
2007 Ttl 2006 Ttl
---------- ---- ---------- -----
Ophthalmic Products $2,889,585 46% $2,545,170 36%
ORTHOVISC 2,655,059 42% 4,337,094 61%
HYVISC 701,172 11% 222,720 3%
Other 86,150 1% 10,500 0%
---------- ---- ---------- -----
$6,331,966 100% $7,115,484 100%
========== ==== ========== =====
Product gross profit $3,308,185 $4,224,580
Product gross margin 52% 59%
Product Revenue by Geography
Quarter Ended
June 30,
--------------------------------
% %
2007 Ttl 2006 Ttl
---------- ---- ---------- -----
Domestic $4,901,224 77% $3,276,355 46%
International 1,430,742 23% 3,839,129 54%
---------- ---- ---------- -----
$6,331,966 100% $7,115,484 100%
========== ==== ========== =====
Anika Therapeutics, Inc. and Subsidiary
Supplemental Financial Data -
(unaudited)
Product Gross Margin and Revenue by Product Line
Six Months Ended
June 30,
----------------------------------
% %
2007 Ttl 2006 Ttl
----------- ---- ----------- ----
Ophthalmic Products $5,174,706 44% $5,482,340 41%
ORTHOVISC 5,298,356 45% 6,978,518 52%
HYVISC 1,130,097 10% 909,960 7%
Other 102,845 1% 10,500 0%
----------- ---- ----------- ----
$11,706,004 100% $13,381,318 100%
=========== ==== =========== ====
Product gross profit $6,189,301 $7,442,596
Product gross margin 53% 56%
Product Revenue by Geography
Six Months Ended
June 30,
----------------------------------
% %
2007 Ttl 2006 Ttl
----------- ---- ----------- ----
Domestic $9,118,905 78% $7,150,472 53%
International 2,587,099 22% 6,230,846 47%
----------- ---- ----------- ----
$11,706,004 100% $13,381,318 100%
=========== ==== =========== ====
CONTACT: Anika Therapeutics, Inc.
Charles H. Sherwood, Ph.D., 781-932-6616
CEO
or
Kevin W. Quinlan, 781-932-6616
CFO