Exhibit 99.1
Anika Therapeutics Reports 33 Percent Increase in Third Quarter Product Revenues
In Negotiation to Terminate Agreements with Galderma and Retain
Worldwide Rights to ELEVESS Brand
Receives European CE Mark for MONOVISC(R) Single-Injection
Osteoarthritis Product
WOBURN, Mass.--(BUSINESS WIRE)--Nov. 5, 2007--Anika Therapeutics,
Inc. (Nasdaq: ANIK) today reported financial results for the third
quarter ended September 30, 2007. The Company also announced that it
is in negotiations to terminate its license and supply agreements
entered into with Galderma Pharma in June 2006 for the ELEVESS family
of products.
Revenue
Anika reported product revenue of $7,283,000 for the third quarter
of 2007 compared with $5,494,000 in the year-ago period. The increase
in product revenue during the quarter was attributable to strong
domestic and international sales of the Company's ORTHOVISC(R)
product. Product revenue for the first nine months of 2007 was
$18,989,000 compared with $18,876,000 in the nine months ended
September 30, 2006.
Domestic ORTHOVISC revenues increased 67% in the quarter compared
with the third-quarter of 2006 fueled by the unique reimbursement code
assigned to ORTHOVISC in December 2006. Third-quarter 2007
international revenue of ORTHOVISC grew 70% versus the same period in
2006 due to sales increases to the Company's distribution partners in
Turkey, Canada, Austria and Germany.
Revenue for the Company's HYVISC(R) product increased 42% in the
quarter compared with last year's third quarter. Third-quarter 2007
ophthalmic revenue of $2,894,000 was slightly lower than the third
quarter of last year.
During the three and nine months ended September 30, 2007,
licensing, milestone and contract revenue was $682,000 and $2,214,000,
respectively, compared with $706,000 and $2,076,000, respectively, in
the prior year periods.
Total revenue for the third quarter of 2007 was $7,965,000, an
increase of 28% compared with $6,201,000 in the third quarter of 2006.
Total revenue for the nine months ended September 30, 2007 was
$21,203,000 compared with $20,952,000 in 2006.
Product Gross Margin
Product gross margin for the third quarter of 2007 was 57%
compared with 61% in the third quarter of 2006. For the nine months
ended September 30, 2007, product gross margin was 54% compared with
57% for the nine 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. Product gross margin for the full year 2007 is
expected to be slightly higher than full-year 2006's gross margin of
54%.
Operating Expenses
Total operating expenses, excluding cost of product revenue, were
$2,947,000 for the third quarter of 2007 compared with $2,359,000 for
the third quarter of 2006. Total operating expenses, excluding cost of
product revenue, for the nine month period ended September 30, 2007
were $8,081,000 compared with $8,331,000 for the same period of 2006.
Operating expenses for the three-month period were higher in 2007 due
to the addition of a new facility currently under construction.
Operating expenses for the nine-month period of 2007 were lower than
for 2006 even with the new facility costs in 2007, as 2006 included
higher R&D expenses related to an ELEVESS clinical trial in Europe.
Net Income
Net income for the third quarter of 2007 was $1,796,000, or $0.16
per diluted share, compared with $1,325,000, or $0.12 per diluted
share, for the same period last year. Net income for the nine-month
period of 2007 was $4,362,000, or $0.38 per share, compared with
$3,557,000, or $0.32 per diluted share, for the nine month period of
2006. The improvement in net income in both the third quarter and nine
month periods was due to increased product sales, and a lower
effective tax rate. The lower tax rate reflects higher state
investment tax credits as a result of Anika's ongoing investment in
its new facility, as well as increased domestic manufacturing
deductions and tax credits related to R&D spending.
Other
Anika's cash, cash equivalents and short-term investments at
September 30, 2007 were $49,669,000 compared with $47,167,000 at
December 31, 2006.
Comments on the Third Quarter
"We reported strong third-quarter financial results and recently
achieved a key product development milestone for MONOVISC," said
Charles H. Sherwood, Ph.D., Anika's president and chief executive
officer. "We saw increased demand for our flagship
product--ORTHOVISC--in both the domestic and international markets."
CE Mark Approval for MONOVISC(R)
"After the close of the quarter, we received European CE Mark
approval for our new MONOVISC single-injection osteoarthritis
product," continued Sherwood. "We expect to launch MONOVISC in Europe
in the first quarter of 2008. MONOVISC leverages our new technology
platform utilizing a crosslinked, non-animal source of HA, delivered
in an innovative and differentiated format. We also recently filed an
investigational device exemption (IDE) application with the FDA and
expect to begin enrolling patients in a U.S. based pivotal clinical
trial by the end of 2007."
License and Supply Agreements with Galderma
"We have had technical and business disagreements with Galderma
regarding the development and commercialization of the ELEVESS family
of products. These issues concern certain aspects of the formulation
of the current and future products as well as some elements of the
strategy for commercialization. The companies feel that it would be in
the best interest of both parties to terminate their agreements, and
we are currently in negotiations with Galderma to accomplish this and
to reacquire worldwide rights and control of the future development
and marketing of ELEVESS," continued Sherwood. "The feedback thus far
from physicians and patients exposed to ELEVESS has been very
positive. We believe that the product is ready for market, and we want
to proceed expeditiously towards commercialization."
With an enhanced product that is now approved in the U.S.,
European Union and Canada, the Company is seeking a new partner and
expects to launch the product as soon as possible in 2008 with a new
partner, or initially on our own.
"We are looking to the future with much optimism," continued
Sherwood. "Our osteoarthritis franchise continues to gain momentum in
the U.S. and internationally, and we are working aggressively to sign
up a new distribution partner that will provide us with revenue growth
potential for ELEVESS. We also are looking forward to capitalizing on
the benefits of our new facility, which we will begin to occupy on
schedule later this month."
Conference Call Information
Anika will hold a conference call to discuss its financial
results, business highlights and outlook on Tuesday, November 6, 2007,
at 9:00 a.m. ET. In addition, the Company will answer questions
concerning business and financial developments and trends, and other
business and financial matters affecting the Company, some of the
responses to which may contain information that has not been
previously disclosed.
To listen to the conference call, dial 866-825-3354 (International
callers dial 617-213-8063) and use the passcode 74774895. 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.; the ELEVESS(TM) family of aesthetic dermatology products for
facial wrinkles, scar remediation and lip augmentation; AMVISC(R),
AMVISC(R) Plus, STAARVISC(TM)-II and Shellgel(TM) injectable
viscoelastic HA products for ophthalmic surgery; INCERT(R), an
HA-based anti-adhesive for surgical applications; and next generation
products for joint health and aesthetic dermatology based on the
Company's proprietary, chemically modified HA.
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," "expect" 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: (i) the
company's expectations regarding its cosmetic dermatology product,
ELEVESS(TM), (ii) product gross margin (iii) the company's
expectations concerning its MONOVISC product, and (iv) statements
concerning Galderma Pharma and ELEVESS . 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 terminate its agreements with
Galderma Pharma on terms favorable to the company, and the company's
ability to license ELEVESS to a new distribution partner on terms
favorable to the company, if at all; (ii) 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; (iii) 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; (vi) the cost effectiveness and
efficiency of our manufacturing operations and production planning;
(v) 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 (vi) 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 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. There can be no assurance that the company will terminate
its agreements with Galderma Pharma on terms favorable to the company
or that the company will license ELEVESS to a new distribution partner
on terms favorable to the company or at all. 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
June 30, 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 Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Product revenue $ 7,283,129 $ 5,494,407 $18,989,133 $18,875,724
Licensing, milestone
and contract revenue 682,251 706,250 2,213,855 2,075,934
----------- ----------- ----------- -----------
Total revenue 7,965,380 6,200,657 21,202,988 20,951,658
Operating expenses:
Cost of product
revenue 3,138,307 2,125,028 8,655,010 8,063,750
Research &
development 1,125,826 905,289 2,969,218 3,111,958
Selling, general &
administrative 1,820,998 1,453,393 5,112,147 5,218,992
----------- ----------- ----------- -----------
Total operating
expenses 6,085,131 4,483,710 16,736,375 16,394,700
----------- ----------- ----------- -----------
Income from
operations 1,880,249 1,716,947 4,466,613 4,556,958
Interest income, net 550,014 569,229 1,692,622 1,520,075
----------- ----------- ----------- -----------
Income before income
taxes 2,430,263 2,286,176 6,159,235 6,077,033
Provision for income
taxes 634,033 961,536 1,797,377 2,519,579
----------- ----------- ----------- -----------
Net income $ 1,796,230 $ 1,324,640 $ 4,361,858 $ 3,557,454
=========== =========== =========== ===========
Basic net income per
share:
Net income $ 0.16 $ 0.12 $ 0.40 $ 0.34
Basic weighted average
common shares
outstanding 11,152,686 10,676,943 11,018,208 10,602,659
Diluted net income
per share:
Net income $ 0.16 $ 0.12 $ 0.38 $ 0.32
Diluted weighted
average common shares
outstanding 11,568,074 11,130,225 11,438,673 11,100,985
Anika Therapeutics, Inc. and Subsidiary
Consolidated Balance Sheets
(unaudited)
September December 31,
30,
2007 2006
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 46,159,638 $ 47,167,432
Short-term investment 3,508,992 --
Accounts receivable, net 4,965,946 3,509,508
Inventories 4,712,631 5,395,596
Current portion deferred income taxes 1,312,901 1,312,901
Prepaid expenses and other receivables 510,950 220,445
------------- -------------
Total current assets 61,171,058 57,605,882
Property and equipment, at cost 22,940,274 13,255,240
Less: accumulated depreciation (10,756,296) (10,237,232)
------------- -------------
12,183,978 3,018,008
Long-term deposits and other 349,310 193,050
Deferred income taxes 7,525,066 7,296,689
------------- -------------
Total Assets $ 81,229,412 $ 68,113,629
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 4,184,935 $ 965,180
Accrued expenses 2,355,160 1,573,835
Deferred revenue, current 3,257,413 2,905,099
Income taxes payable 383,336 17,253
Other long-term liabilities 268,243 64,525
Long-term deferred revenue 18,157,404 17,099,712
------------- -------------
Total liabilities 28,606,491 22,625,604
Stockholders' equity
Preferred stock -- --
Common stock 111,695 107,727
Additional paid-in-capital 40,031,838 37,262,768
Retained earnings 12,479,388 8,117,530
------------- -------------
Total stockholders' equity 52,622,921 45,488,025
------------- -------------
Total Liabilities and Stockholders'
Equity $ 81,229,412 $ 68,113,629
============= =============
Anika Therapeutics, Inc. and Subsidiary
Supplemental Financial Data -
(unaudited)
Product Gross Margin and Revenue by Product Line
Quarter Ended
September 30,
---------------------------------
% %
2007 Ttl 2006 Ttl
---------------------------------
Ophthalmic Products $2,893,906 40%$2,950,270 54%
ORTHOVISC 3,596,395 49% 2,140,017 39%
HYVISC 552,773 8% 388,580 7%
Other 240,055 3% 15,540 0%
---------------------------------
$7,283,129 100%$5,494,407 100%
=================================
Product gross profit $4,144,822 $3,369,379
Product gross margin 57% 61%
Product Revenue by Geography
Quarter Ended
September 30,
---------------------------------
% %
2007 Ttl 2006 Ttl
---------------------------------
Domestic $5,057,754 69%$3,984,090 73%
International 2,225,375 31% 1,510,317 27%
---------------------------------
$7,283,129 100%$5,494,407 100%
=================================
Nine Months Ended
September 30,
---------------------------------
% %
2007 Ttl 2006 Ttl
---------------------------------
Ophthalmic Products $ 8,068,611 42%$ 8,432,608 45%
ORTHOVISC 8,894,752 47% 9,118,536 48%
HYVISC 1,682,870 9% 1,298,540 7%
Other 342,900 2% 26,040 0%
---------------------------------
$18,989,133 100%$18,875,724 100%
=================================
Product gross profit $10,334,123 $10,811,974
Product gross margin 54% 57%
Product Revenue by Geography
Nine Months Ended
September 30,
---------------------------------
% %
2007 Ttl 2006 Ttl
---------------------------------
Domestic $14,176,658 75%$11,134,562 59%
International 4,812,475 25% 7,741,162 41%
---------------------------------
$18,989,133 100%$18,875,724 100%
=================================
CONTACT: Anika Therapeutics, Inc.
Charles H. Sherwood, Ph.D., 781-932-6616
CEO
or
Kevin W. Quinlan, 781-932-6616
CFO