Exhibit 99.1
CONTACTS:
Charles H. Sherwood, Ph.D., CEO
Kevin W. Quinlan, CFO
Anika Therapeutics, Inc.
(781) 932-6616
ANIKA THERAPEUTICS REPORTS FOURTH-QUARTER AND FULL-YEAR 2006
FINANCIAL RESULTS
PRODUCT REVENUE INCREASES 17% FOR THE YEAR
WOBURN, Mass., February 28, 2007 -- Anika Therapeutics, Inc. (Nasdaq: ANIK)
today reported financial results for the fourth quarter and year ended December
31, 2006.
REVENUE
Anika reported product revenue of $5,078,000 for the fourth quarter of 2006,
compared with $4,774,000 in the same period last year. For the year ended
December 31, 2006, product revenue increased 17% to $23,953,000, compared with
$20,534,000 in 2005.
Product revenue for the fourth quarter of 2006 increased 6.4% compared with the
fourth quarter of 2005 due primarily to increased contributions from domestic
ORTHOVISC(R) sales. The increase in domestic sales of ORTHOVISC was partially
offset by reduced international sales due to a change in the Turkish
government's reimbursement policy for more than 100 drugs, including ORTHOVISC
and its competing products.
During the fourth quarter and year ended December 31, 2006, the company reported
licensing, milestone and contract revenue of $811,000 and $2,887,000,
respectively. For the fourth quarter and year ended December 31, 2005,
licensing, milestone and contract revenue was $692,000 and $9,301,000,
respectively. The 2005 amount includes $6,537,000 of contract payments received
in connection with a former development and commercialization contract for the
company's hyaluronic acid-based cosmetic tissue augmentation (CTA) product.
Total revenue for the fourth quarter of 2006 was $5,889,000, compared with
$5,466,000 in the fourth quarter of 2005. For the year ended December 31, 2006,
total revenue was $26,841,000, compared with $29,835,000 in 2005.
PRODUCT GROSS MARGINS
Product gross margin for the fourth quarter of 2006 decreased to 40% from 53% in
last year's fourth quarter. Product gross margin for full year 2006 was 54%
versus 46% for 2005. The improvement on a full-year basis was due to increased
ORTHOVISC royalties and favorable material prices.
NET INCOME
Net income for the fourth quarter of 2006 was $1,047,000, or $0.09 per diluted
share, compared with $822,000, or $0.07 per diluted share, for the same period
last year. Net income for the year ended December 31, 2006 was $4,604,000, or
$0.41 per diluted share, compared with $5,893,000, or $0.52 per diluted share,
in 2005. The impact from the adoption of SFAS 123R in 2006 reduced 12-month
earnings per share by $0.07. Please refer to the schedule at the end of this
news release for a reconciliation of Non-GAAP diluted net income per share.
RESEARCH & DEVELOPMENT AND SELLING, GENERAL & ADMINISTRATIVE EXPENSES
R&D and S,G&A operating expenses were $1,964,000 for the fourth quarter of 2006,
compared with $2,342,000 for the fourth quarter of 2005. For 2006, R&D and S,G&A
operating expenses were $10,295,000 compared with $10,140,000 in 2005. The
increase in R&D and S,G&A operating expenses for 2006 was primarily due to the
impact of stock-based compensation expense, which totaled $1,267,000 for the
year, partially offset by lower clinical trial expenses.
Anika's cash and cash equivalents increased to $47,167,000 at December 31, 2006
from $44,747,000 at December 31, 2005 as a result of positive cash flow from
operations including a 69% increase in interest income. The company has no
short- or long-term debt.
MANAGEMENT COMMENTARY AND OUTLOOK
"Our 2006 financial performance was highlighted by a 103% increase in end-user
unit sales of ORTHOVISC," said Charles H. Sherwood, Ph.D., Anika's president and
chief executive officer. "This was offset by a slight decline in full-year
international sales due to a change in the reimbursement policy in Turkey in the
third quarter. As a result, worldwide ORTHOVISC sales increased 43% over 2005.
During the fourth quarter, we received a unique reimbursement code for ORTHOVISC
that will simplify the Medicare/Medicaid reimbursement process in the physician
office setting. A new clinical study to evaluate the safety and efficacy of
ORTHOVISC to treat pain caused by osteoarthritis of the shoulder was also
initiated in December."
"Our fourth-quarter achievements also included significant progress in the
advancement of our CTA product," added Sherwood. "We received FDA approval for
the initial CTA product and we have filed the necessary amendments with U.S. and
European regulators on an enhanced version, which will be named 'ELEVESS(TM).'"
"Looking forward, we have several key milestones for both our osteoarthritis
franchise and our ELEVESS product family," stated Sherwood. "During the year, we
plan to seek CE Mark approval and then launch a new, single injection, non
animal osteoarthritis product in the European Union. We also expect to begin a
pivotal clinical trial for the product in order to gather data working toward a
U.S. approval. With a unique reimbursement code for ORTHOVISC, we anticipate
U.S. product sales of ORTHOVISC to grow significantly in 2007."
"With our marketing and distribution partner, Galderma Pharma, we expect to
receive FDA and CE Mark approval for ELEVESS and launch ELEVESS products
worldwide in 2007. Our accomplishments in 2006, and the achievement of our
milestones in 2007 set the stage for a stronger company with a broader product
portfolio and increased opportunities for growth," concluded Sherwood.
CONFERENCE CALL INFORMATION
The company will hold a conference call to review its financial results and
business highlights on Thursday, March 1, 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 866-770-7120 (International callers use 617-213-8065) and
use the passcode 13618636. 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.
(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.
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," "anticipate,"
"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, including the launch of
ELEVESS products worldwide, (ii) its goal to obtain U.S. and European marketing
approval for its enhanced cosmetic tissue augmentation product, including
ELEVESS, (iii) sales of ORTHOVISC in Turkey, and (iv) prospects for domestic and
international ORTHOVISC sales and the simplification of the Medicare/Medicaid
reimbursement process in the U.S. physician office setting and our anticipation
that U.S. ORTHOVISC product sales will grow. 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 success of the company's efforts to improve
the financial performance of its core business; (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; (iv) 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; (vi) the new ORTHOVISC reimbursement code may not
result in additional sales; or (vii) 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 CTA 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(R) , 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, 2005, and its Quarterly
Report on Form 10-Q for the quarters ended March 31, June 30 and September 30,
2006 and Current Reports on Form 8-K, as well as those described in the
company's other press releases and U.S. Securities and Exchange Commission
filings.
ANIKA THERAPEUTICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
QUARTER ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------- -------------------------------
2006 2005 2006 2005
-------------- -------------- -------------- --------------
Product revenue $ 5,077,561 $ 4,773,825 $ 23,953,285 $ 20,533,889
Licensing, milestone and contract revenue 811,395 692,201 2,887,329 9,300,723
-------------- -------------- -------------- --------------
Total revenue 5,888,956 5,466,026 26,840,614 29,834,612
Operating expenses:
Cost of product revenue 3,054,111 2,266,156 11,117,861 11,144,090
Research & development 504,477 1,092,765 3,616,435 4,730,664
Selling, general & administrative 1,459,853 1,248,755 6,678,845 5,409,329
-------------- -------------- -------------- --------------
Total operating expenses 5,018,441 4,607,676 21,413,141 21,284,083
-------------- -------------- -------------- --------------
Income from operations 870,515 858,350 5,427,473 8,550,529
Interest income, net 580,674 422,363 2,100,749 1,241,113
-------------- -------------- -------------- --------------
Income before income taxes 1,451,189 1,280,713 7,528,222 9,791,642
Provision for income taxes 404,427 458,411 2,924,006 3,899,104
-------------- -------------- -------------- --------------
Net income $ 1,046,762 $ 822,302 $ 4,604,216 $ 5,892,538
============== ============== ============== ==============
Basic net income per share:
Net income $ 0.10 $ 0.08 $ 0.43 $ 0.57
Basic weighted average common shares
outstanding 10,745,819 10,496,453 10,639,028 10,410,920
Diluted net income per share:
Net income $ 0.09 $ 0.07 $ 0.41 $ 0.52
Diluted weighted average common shares
outstanding 11,196,213 11,412,632 11,155,249 11,428,201
ANIKA THERAPEUTICS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(unaudited)
DECEMBER 31, DECEMBER 31,
2006 2005
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 47,167,432 $ 44,746,656
Accounts receivable, net 3,509,508 2,066,240
Inventories 5,395,596 3,270,678
Current portion deferred income taxes 1,312,901 1,301,085
Prepaid expenses and other receivables 220,445 1,025,481
-------------- --------------
Total current assets 57,605,882 52,410,140
Property and equipment, at cost 13,255,240 11,949,439
Less: accumulated depreciation (10,237,232) (9,853,177)
-------------- --------------
3,018,008 2,096,262
Long-term deposits and other 193,050 143,060
Deferred income taxes 7,296,689 7,968,481
-------------- --------------
Total Assets $ 68,113,629 $ 62,617,943
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 965,180 $ 1,277,782
Accrued expenses 1,573,835 1,718,916
Deferred revenue 2,905,099 2,830,046
Income taxes payable 17,253 --
-------------- --------------
Total current liabilities 5,461,367 5,826,744
Other long-term liabilities 64,525 --
Long-term deferred revenue 17,099,712 18,900,000
Stockholders' equity
Preferred stock -- --
Common stock 107,727 105,004
Additional paid-in-capital 37,262,768 34,272,881
Retained earnings 8,117,530 3,513,314
-------------- --------------
Total stockholders' equity 45,488,025 37,891,199
-------------- --------------
Total Liabilities and Stockholders' Equity $ 68,113,629 $ 62,617,943
============== ==============
ANIKA THERAPEUTICS, INC. AND SUBSIDIARY
SUPPLEMENTAL FINANCIAL DATA -
(unaudited)
PRODUCT GROSS MARGIN AND REVENUE BY PRODUCT LINE
QUARTER ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------------------- ----------------------------------------------
2006 % TTL 2005 % TTL 2006 % TTL 2005 % TTL
------------ ----- ------------ ----- ------------ ----- ------------ -----
Ophthalmic Products $ 2,316,157 46% $ 2,173,473 46% $ 10,748,765 45% $ 10,521,914 51%
ORTHOVISC 2,221,897 44% 1,940,072 40% 11,340,433 47% 7,938,333 39%
HYVISC 522,077 10% 660,280 14% 1,820,617 8% 2,073,642 10%
INCERT 17,430 0% - 0% 43,470 0% - 0%
------------ ----- ------------ ----- ------------ ----- ------------ -----
$ 5,077,561 100% $ 4,773,825 100% $ 23,953,285 100% $ 20,533,889 100%
============ ===== ============ ===== ============ ===== ============ =====
Product gross profit $ 2,023,450 $ 2,507,669 $ 12,835,424 $ 9,389,799
Product gross margin 40% 53% 54% 46%
PRODUCT REVENUE BY GEOGRAPHY
QUARTER ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------------------- ----------------------------------------------
2006 % TTL 2005 % TTL 2006 % TTL 2005 % TTL
------------ ----- ------------ ----- ------------ ----- ------------ -----
Domestic $ 3,873,984 76% $ 2,581,227 54% $ 15,011,369 63% $ 11,789,528 57%
International 1,203,577 24% 2,192,598 46% 8,941,916 37% 8,744,361 43%
------------ ----- ------------ ----- ------------ ----- ------------ -----
$ 5,077,561 100% $ 4,773,825 100% $ 23,953,285 100% $ 20,533,889 100%
============ ===== ============ ===== ============ ===== ============ =====
We believe that it is useful to investors to review information concerning the
company's results of operations on both a GAAP basis and a non-GAAP basis that
excludes stock-based compensation expense under FAS 123R. We utilize these
non-GAAP financial measures to evaluate our performance. These measures should
not be considered an alternative to measurements required by accounting
principles generally accepted in the United States ("GAAP") such as net income
and earnings per share, and should not be considered a measure of our liquidity.
In addition, our non-GAAP financial measure may not be comparable to similar
measures reported by other companies.
[The following table reconciles non-GAAP financial measures used in this release
to the most comparable GAAP measure for the respective periods:]
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE U.S. GAAP MEASURES
(unaudited)
QUARTER ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------- -------------------
2006 2005 2006 2005
-------- -------- -------- --------
Diluted net income per share $ 0.09 $ 0.07 $ 0.41 $ 0.52
Stock-based compensation 0.02 - 0.07 -
-------- -------- -------- --------
Proforma diluted net income per share $ 0.11 $ 0.07 $ 0.48 $ 0.52
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