ANIK - Earnings call transcript Q3 2018 | Anika Therapeutics, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good evening, ladies and gentlemen, and welcome to Anika Therapeutics Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And I will now turn the call over to Sylvia Cheung, Chief Financial Officer. Please proceed.

Sylvia Cheung

Sandra. you, Thank and XXXX everyone, for our joining Good call. thank quarter earnings third morning, you With call on Officer, me the Joseph Chief President Darling. Executive and today is Anika’s

quarter I During the Joe summarized Investors available our of in issued of business will the XXXX release were financial website earnings Relations A review highlights, today’s section which results and at in our today. call, our earnings key and is third anikatherapeutics.com. copy release

website take slide in the file a In to along presentation Please to presentation section tab. on our with open the Investor is under turn the addition, slide Events We posted Relations invite a the Presentations one. & number follow us. you and to moment

differ this the forward-looking as and certain are and Before uncertainties. we begin, are and please Securities based beliefs The to Company’s remember XXXX. during call defined on statements conference factors materially number turn about achievements. SEC information that more These in any expectations performance Act subject made as our certain slide of over Please Exchange now call current statements filings and our constitute Joseph CEO, two, our Joe? for turn risks actual statements see or I future Please results. to also results, could the our could Darling. affect that results anticipated from

Joseph Darling

that on people, profitability. growth believed a and drive and company XXXX important third near long focused and Thank am to report everyone. made you, its evening, Sylvia, its foundational we earnings strategy powered a quarter long-term this progress call. I are quarter that in good to our pipeline Welcome growth. have to that enhancing elements and pleased I its the by needed is

of my comments like those to context I’d So, three the within areas. frame

three confident is we shareholders. and increased come on clear note company know it areas, important milestones, we that to Anika not while these for defined be our recognized focused Company our a we It values, may value ultimately profitability, growth, successfully transform that profitability with as will are I’m continue success immediately. within While our and to increasing

investments the us time We and we in growth. how know at improvements to importantly, is center making next we are are initiatives It going, our to think to to of of do we there. phase profitability, deliver it where what we need and takes implementing but sustained drive get to

Before want I our I to future. and briefly the we get details, position for the better are making to on comment changes Anika the today into strategy

pleased our kind particularly While this am with happen results, third our I bottom-line quarter performance. of overnight, transformation won’t

detail, we As Sylvia discuss will guidance. XXXX full-year in our more have lowered slightly revenue

keenly the are transformational impacting issues to have emerge We underway as on company. enable believe and near-term our will results us we stronger efforts the the focused

and I focused and far little and quarter, increasing Last about performance, are execution, a company. productivity. control operational our improved destiny financial spoke our on driving commercial a manufacturer fully evolution with too into integrated over from We solid efficiency contract

particularly While progress the a am way contracts, given legacy contracts sales we’re and I revenue pleased our payer due fully marketing, that challenge our we That optimizing collectively structured, predicting support control to being said, the pricing, and always are stream will making. with end-market the relations. of partners legacy and is

motivation deliver it to of partnership greater and shareholders. penetration Anika’s value sources new revenue market continued of that types our through the Our and gives models us to broaden contracts

three. are pipeline in and people, I that growth continue that progress are and enhance resources Anika’s in earlier to our slide actively and key our our we and reach noted we to leverage enhancing trajectory. innovative quarter, deliver internal delivering to ensure optimize profitability pipeline value commercial turn for shareholders. This our continued Please to foundation number

the competencies we’ve our for future. where Anika in hires areas our and functions in like level that organization enhance Anika President a broaden discussed as of across work for further our about to success in with teams my new CEO, the with internationally. we First, of I’ve the in position talent could pleased Since their Sales, talk leadership and identified to the recent few President International better I date. had two closely our help and marketplace. hires, Vice to opportunity several Last to Anika U.S. the contributions the senior U.S. I’d Operations position quarter, Through will have appointment and process, Vice to been that

that continue commercial Importantly, assess world-class and we Anika. the across we to operational actively our ensure executives have to organization of needs

International quarter, partners and pipeline Sales as We by distribution who in of third feedback new partners, highlight the portfolio. were of and continue Europe, with educate commercial responded in the meeting we pleased the growth to expansive received During key we potential Orthobiologics International which leaders opinion our VP of portfolio. current our to XX positively international annual our Distributor attended spearheaded our was exciting

who to and than brings Cheryl She companies more biotech of on Directors, leader distribution med-tech a Board privately I platform. CEO Susan our continue Ms. of years Aushon we experience. can to to a very identify with of Vogt serves we drug latest multiplex regenerative and of with Keratin Board served also our Biosciences. XX to Dr. am third of most we executive regions. a Board Blanchard Anika’s currently CEO is as Directors BioSystems, the delivery addition. called venture Vogt backed company President and as recently an pleased the independent drive those experienced held member. as quarter, Blanchard expanded a and results also Director In medicine immunoassay Board announce novel leadership depend appointment as new and of reliable and growth the Importantly, increased respective partners in Dr.

experience addition executive finance in private companies. of SeraCare Anika’s brings President Sciences life Boston our We of the of from financial Su understanding Division also audit In and roles area. here to operational served to up global Board several Su diagnostics research, of based in Board past of the as biotech XX Corporations, a brings was and her Life her and Millipore on deep expertise. CEO science look than industries. throughout forward BioPharmaceutical and also services committees financial the benefiting more to years from accounting career and clinical pharmaceutical, She

Board our Wheeler refreshment, service. of his the and grateful the a X, part has years very XXXX. been his longtime has we’re notified as As of February for Steven retire Board, of Board to contributor to of Steve intention

independence additions to Anika As mix for right Board, the the position Ms. experience to best Dr. we ensuring and the corporate and expertise, committed Blanchard the future. governance to evidenced our by of we’re highest have standards of Vogt and of

pleased Board We contributions new we and the are refreshment of with these the activities to look members. Board forward

to its we of like ensure I’d with have to As towards a continuum next focused and our a orthopedic of our palliative expertise addressing from growth. guide to transformation is Directors of look we Board now the on to well-rounded care phase across we its want to Anika proven progress which continued that regenerative future, the discuss through pipeline, solutions.

number want from update and of in Before external an area I remains products only our or for potential I on with and turn that available internal the provide not hybrid opportunity be each to would model. slide have that I’ll strategic pipeline update technologies note through that our a as four. Please developed great we a be we to acquisition but commercial with fit brief Anika, partnership innovation, on also a CINGAL. may start that leverage program, technologies build

from of receive efficacy expeditiously the continue of guidance pivotal clinical approval, Canada to totality us data novel multiple the evidence FDA. entails strategies physicians process extensive evaluating the that utility and our and move this that to once along towards compiling We treatment. real-world pursue demonstrate from we would with Part of to allow in Europe and

meet the approval. and We had slide discussions and of about committed direction the to them total we’ve with next appropriate to have submission path FDA are in Please about from quarter most intend turn the our with for to number provide of schedule update most FDA forward first five. on to CINGAL. pursuing the received once expeditious remain approval to these We CINGAL, the XXXX path our package

of product HA-based therapy, We continuing XXXX clearance last December. our prepare U.S. the delivered are repair XXX(k) commercial an launch received regenerative first to which bone for surgically

large in million prototype market, also U.S. surgically can cuff tears, year, second reported product be potentially we significant it This become are and market XXX to addressable Anika. alone each candidate global potential do the represents $XXX opportunity. this regenerative repair than With the cuff currently procedures in Further, can procedures a rotator more for fitness a on for given for U.S. international it our franchise. product growth and a XXX,XXX partial therapy prototype. believe opportunity product both delivered rotator We working and initial and a view used as completed recently we full

the commencing in This highlight HA-injectable slide provide elbow. to function Europe member We the the XXXX. efforts In collect to marketing study the Turning the treatment in relieve health of by in indicated is tennis to a evidence first newest coming in European quarter chronic affected Europe currently will aid in to of number post-market we to lateral restore We our pain launched orthobiologics our and a ORTHOVISC-T Europe clinical or months, epicondylosis and be patients ORTHOVISC-T. in authorities. six. franchise, therapy information

of launch approval. XXXX We partnership overall our clinical a product model trial plan to part in initiate will be also U.S. Phase as also X to considered seek approach. This

continuing we support Lastly, significant Phase our as clinical and to accelerate in product view trial an continue X strategies HYALOFAST important FDA to pursue revenue potential. with approval, to are future to enrollment HYALOFAST we

U.S. a product product $X.X for of unique have continue annually, among to And enthusiasm very the regenerative the greatly enhance properties as conservative view high revenue With treatment. noted level significant than procedure. size potential. of patients numerous a we a physicians surgical continue see to important We with an billion greater surgeons and this HYALOFAST future market how

to to pricing aggressively share partner business, effects with franchise. and control viscosupplement increased of of continue we bringing to balance in market help pursuing recognize work market fiscal payer what today the market gains importance products current our we pressures the we the with the in over new viscosupplement for seeing our the are While

Sylvia plans initiatives growth Cheung, I’d several provide I Our Chief our more to quarter now Financial like to next about drive years sector. fuel long-term our in orthobiologics product ongoing of Sylvia? a and to Officer, third over new the to near details the before the financial turn results, review our growth. to over provide back our launch will products call continuum

Sylvia Cheung

$XX.X Thank number you, the Joe. to Please was quarter Total third year. seven. to million for compared last million quarter the of $XX.X turn slide revenue for

the our HYAFF-based of due certain year anticipated, revenue voluntarily we for recall initiated was slightly products. total As year-over-year primarily down earlier this to

markets. the in third resume Importantly, increased due we the end products expect the to X% shipments the year-over-year XX% this quarter primarily year-over-year, the quarter grew in impacted growth approximately revenue before viscosupplement for XXX% Global revenue of year. international and strong of revenue of months XX% CINGAL for to International viscosupplement first approximately XXXX. nine international increased driven by the CINGAL. year-over-year

expand Our revenue to $XXX,XXX International franchise. international of continued an and Sales will and be VP primarily and pricing. markets timing focused third our for this we us with and grow viscosupplement enable lower will in quarter with our shipments efforts due execution U.S. product to year-over-year increased on the decreased of approximately renewed accountability where And serve. viscosupplement

to ORTHOVISC transfer experienced quarters the year-over-year the importantly, XX initial quarter of U.S. impact decreased this of market consecutive first in and a Since that MONOVISC second MONOVISC launch quarter of product prices and MONOVISC its we in in But, U.S. the year. pricing XXXX, the market. occurred continued experienced expected, strong position growth. more the ORTHOVISC As maintain from on

continue experienced single competitive low ORTHOVISC volume. see they as placed patients end unit in user increase while sales digit decrease increase share sales XX% Our user that products. result partner On year-over-year to has end quarter viscosupplement a percentage MONOVISC a from on a an experienced taking our indicated of in basis, a

of to MONOVISC the third second quarter, this quarter During comparing we ORTHOVISC and for pricing the also year. declines small experienced

for calls. growth overall is recall of and pressure the future is we our we’re the quarter share third impacting expansion, products. visco in production was our partner, we’ll decline XX% product market and strong to total see the pricing in second and costs, gross viscosupplement the last on This market, XX% due and reported While voluntarily The closely quarter recovery of for is the primarily to critical with XX% margin market for environment U.S. the margin Product gross continued quarter for compared patient pricing. third provide U.S. monitoring related year. increased costs, updates viscosupplement for XXXX decline

expenses efficiency million operating That production of increase were primarily due the to $XX.X cash with sheet. the third income structure initiatives of increased third was operations personnel compared on per $XX.X increasing $X.X We management. disciplined million XXXX. costs quarter investments $XX costs. share The for in to XX-XX balance tax the first of of time. or in decreased are study number in over in was a generated professional $X.XX primarily and Net $XXX Total $X.XX to the and in the XXXX, executing cash focus result million a cost the we we $X.X million, actively We’re net from increase The net quarter or quarter in of of as of research share ended expenses the our to and for of diluted the compared maintaining income expenses containing XXXX. our months quarter income XXXX. million to efficiency income and to said, operating of in lower nine and culture quarter and development approximately to the higher our increase due cost per diluted on completion million the CINGAL increased and

capital results organic $XX strategy quarters which in strategic growth, accelerate this million. returning executed cash continue and line investment top third to revenue XXXX to focused and deploying capital of the opportunities. approximately M&A shared of take the We full to during ensure growth the we by product organic repurchases, deployment to remains second to of below Our the year-to-date on share augment amount we partners, the shareholders plan on year through to and to expect year our to be recently Based disciplined our for approach key we a information value-creating most allocation capital our X% are to XXXX.

I dermal plan to decline to earlier, business. In is international pricing part growth increase distribution refresh addition of near network. and long-term our and This due the discussed U.S. dermal time the our for is to needed to the dynamics part upgrade longer revenue effort expected of

As a of the range. full $XX expecting we expenses are high XXXX result the initiatives, for of successful in control cost operating total to be million year

With to track high XXXX. Joe, are the near discuss call gross full-year our and to range of around We that, product for over now growth XX% the would to deliver margin the turn to I on like drivers. long-term

Joseph Darling

slide to number eight. turn Please Sylvia. you, Thank

and and we our our the a and initiatives, have on growth are the to the executing by confident, over As next previously, I’ve is sated Anika opportunities company, and we leveraging revenue growth strong resources several foundation strategic our operational years. accelerate and earnings

we a quarter, last in coming the the discussed I of strategic we process look forward in to sharing As five-year are detailed developing which months. plan,

on near-term on our revenue clear continue focused plan, we growth. are diligent drive X we As work opportunities to the

added U.S., to assess are of the four and business the we’re and the sales of and First, realize led efforts reach outside the financial Europe, we supplement VP South of starting our quarter, expanded strategic ongoing to our distributor-led new new in our sales In international marketing already network international and and the distributors operations Asia viscosupplement benefits efforts. by and market optimize to America. performance our improve to

resuming the products shipment Sylvia Second which of voluntary by is noted before the this we the occur of continue year. HYAFF-based recall, to end impacted expect earlier to as

CINGAL. the growth of driving continued is Third international

new treatment enabled Europe, us treating is growth We to of with Fourth to current This injury healing injectable, revenue market launch momentum U.S. Canada around for and repair bone fractures year-to-date in U.S. are upcoming bone continued the self-setting as body that XX% for CINGAL. osteoconductive, million an such the growth in therapy our bone stress damaged regenerative is replaced and fractures approximately has our provides process. surgically and the excited commercial tibial which plateau about during million for delivered $XXX results by by substitute graft size the approximately deliver cartilage of joint procedures. The and is resorbed the $XXX the

Anika, I and our further the utility an anticipated Anika. and this as to projected partnerships that in Given second potential half continue a important acquisitions treatment commercial discuss XXXX, we technology view value which hybrid we will driver deliver the believe for model to Fifth targeted continue is of growth which shortly. the greatest demand launch would and to for

smaller complement focused actively evaluating which existing our are our or augment product acquisitions technology on enhance capabilities. tuck-in our We would portfolio, commercialization

Specifically, potential double-digit sustained, earnings we to are in channel have and commercial targets development core in the now like potentially and interested revenue model. our that have I’d growth. orthopedics a distribution competencies place complement our in of discuss hybrid and the generate to strong

commercial tandem orthopedic We team partner surgical are in would small, sales This and seeking marketing established of highly in-house with partners clinical force. elite skilled, an currently our specialists. commercial with work

as necessary in-house sales activities build boots key force relationships provide small appropriate. partner on ground prelaunch surgeons when and for with would team Our accounts our awareness, drive the and and to serve training our the

hybrid commercial with approach support us without financial to will and it. to sales benefits our this direct to time significant profitability will from We expect benefit infrastructure large-scale that significant that force revenue and will growth require. model more that for as Anika and large believe would enormous need the penetration drive related increase enable rapid approach resources a this stronger not yield invest market building We commercialization fully deployed associated commercial investment the and we

greater gain and contracts market strategic as with control and our company pricing commercial I over initiatives more control destiny conclusion, accelerate structure to leadership access, better noted provide new growth. In new to any shareholders. growth to for economics working increased are under enable profitability our to the over previous actively last commercial towards our and us greater to had than we own future sales we will favorable marketing As and working and This historically. new quarter, have are partnership control also partnerships

We to at are of growth. hard of our every taking our needed and into business next Anika the changes drive the the a aspect phase look of transformation making

have about progress we our growth While commercial a still quarter, in company excited global prospects. work us, very and the third made in ahead continued we’ve our transition of to we’re

We are your questions. happy now to you. take Thank

Operator

And question Barrington [Operator of from our the Research. Petusky comes Mike Instructions] line first with

open. Your now line is

Mike Petusky

Good questions. evening. Few

you sequentially those can than year-over-year, said year-over-year you is So, Sylvia, how and ORTHOVISC MONOVISC the in sort rather pricing trend talk -- pricing think I but of products? down, down much about

Sylvia Cheung

pricing standpoint, pricing U.S. from we was that than quarter, about decline earnings viscosupplement So, high do The call, the our larger first as in spoke come single-digit a down. we has year-over-year the see expected during range. in QX

the we quarter, quarter, pricing. we both second products. in decline both During stabilization saw MONOVISC saw continued ORTHOVISC And some of some small third the and for

Mike Petusky

So, if XX% more versus pricing the ago, down we’re quarter year products? was for looking it of third at the in a this than kind this year

Sylvia Cheung

It’s less single-digit than XX% in range. a percent

Mike Petusky

me. all CINGAL extension then, The that now if Okay, And work Very to about XX you of good. right. guys that that remind have finish? done, is finished is piece could you Joe, that is the or weeks,

Joseph Darling

Yes, Mike.

thank chance all, of you the hello, questions. say to back way. We And a to your didn’t by get for First you, introduction. your hello in

yes. So,

of So, the that study-- portion study is completed. the

together analyzing all going the of are the process data putting submit the package a through to to the We and data FDA.

Mike Petusky

is is there that correct? probably the in really, an to update be there until data you not FDA. talk of Is the -- to terms going So,

Joseph Darling

consistent. been I’ve correct. that’s Mike,

our in we that meeting the In call with planned earnings fact, quarter announce upon for completion quarter agreement meeting of on FDA would two we after the our mentioned I the all XXXX. I that data first believe

Mike Petusky

I going discussions you’re mean, of another commercial terms partnership in sort it to hope that And that go strike. is future is of in to direction you products? for of then, part or just a Mitek that the likely

Joseph Darling

time. cognizant obviously what be they We us. job to think done for to and continue previously us they’ve that great very a over the do too mentioned strengthened And relationship I for have of I’ve has

So, is rule while the them to say I’m that discussion, wouldn’t not out. at necessarily in liberty I Mitek

partnership especially look So, benefits a as Mitek such take to you when partners the some for with is, the continued viscosupplements, it. very at reality the strong has a opportunity

Mike Petusky

to one quick real last grow you Sylvia, in do Sylvia. just for QX? expect then, And orthobiologics versus sequentially QX revenue Okay.

Sylvia Cheung

expect a reasons. quarter. couple trend expect orthobiologics we growth market see that our we as -- and will that revenue quarter Joe into myself do his continue to -- VP our sequential under the is, We a for And fourth efforts international growth are leadership. script that of with of market strong number we in for International mentioned in of and both One expansion we addition new Sales continued executing international section

believe is that on based projections orthobiologic we the for supportive. growth So, that

Operator

Analysis. question from line First Joe with Thank of you. the comes our And next Munda

Your now open. is line

Joe Munda

you evening, Good and okay? me hear Joe Sylvia. Can

Joseph Darling

can, We Joe. evening Good to you.

Joe Munda

evening. Good

can from orthobiologics? of visco as just CINGAL couple was give wondering if So, quick as rest a breakout breakout on you us international U.S. I well the here. visco, could items versus you of

Sylvia Cheung

contribution roughly For to year-to-date, XX% give contribution MONOVISC take, and for our one mid-XX%, for this is and been which CINGAL From and here. is product X% second low revenue we revenue, our visco nine has to to months our earlier. hold -- as that of historically perspective, discussed growth international the Mitek’s the about reflected robust CINGAL’s or XXXX, ORTHOVISC approaching in consistent product revenue that year is well. a total on

Joe Munda

orthobiologics X% revenue… or of product total So, of

Sylvia Cheung

Yes, Correct. total.

Joe Munda

you give and especially hand controls Joe, and on us payer color, you they a payer side you’re on seeing. bit what pressure a more bit little are mean, I had -- of going there. the Okay. touched little pricing And in mentioned then, hand, mean, I control

Joseph Darling

the Typically, itself combination regional much pretty but itself. of posed only you with well. payers question the is you a not way the see that large think I Yes. as that payers, Joe, two. answers It with almost the

for But, they go hand. most in So, wouldn’t separate hand do two the part, other. in hand each with necessarily I the them. go hand

Joe Munda

sort or a a anticipate sort players at regional controls here? of plateau Does putting Mitek of in we further are

Joseph Darling

how we a I’m not really are close to to probably pretty sure interpret Joe. the would say, I plateau. question,

So, I apologize.

Joe Munda

so? controls begin essentially doing controls to on expecting payers that visco you more are haven’t payers put put more So, to or

Sylvia Cheung

referring I Yes. want coverage just are that pricing? we to referring are... you or control, sure to make by are Joe, to you

Joe Munda

coverage, referring am I to you referring are to but pricing?

Sylvia Cheung

Yes.

we a Anthem nationwide on on news big related coverage last So, the partner, information from standpoint, year. think, I that not aware issues. have including and our was a speaking with any coverage of hand And based we’re

contracts situation. that come standpoint, So, is From the a up we will typically renewal. currently for as pricing know, all

Mitek renewal the particular those So, contract On negotiations. gets of those related have into exact impacts. level extent timing visibility don’t see discussions we and into as of the and of may type piece, we that the activities, the period-over-period

So, we’ll share the information as they don’t changes, become available we dramatic -- conversation time, Mitek. as based on it become see our available. But, with at this or major any

Joe Munda

Okay. That’s helpful. Thank you.

more couple a Just here.

decline gross wondering on As is about you and the gross little how pricing of just far concerned, margin that a I’m to margin due is as product talked itself? much of bit drivers. some year-over-year

Sylvia Cheung

pricing/product in primarily would which to related the third equal call mix; one is I is is driven higher contributors, by I are production say, and recovery three, gross earlier. The would really and related mentioned and the I margin the activities. product One pricing, other decline roughly recall costs; one

those really equally can the you in gross are kind margin contributing them drivers year-over-year. as less or and to drop So, more think of of the the product three major

Joe Munda

wasn’t there this XXXX. not much delivering going double-digit get talked Okay. -- that the mean, I end about is on notice regarding XQ, you that really call. commentary back still back XXXX, the end I’m bogey? big still August in the quarter, of here that helpful. Joe, a at Can forward back step And then, growth taking I of the there? That’s in picture, you in sorry, at

something still your that that set on? is have So, sights you

Sylvia Cheung

will the try do are but what the several Joe, number the guidance growth in can there I’ll answer And of year, HYAFF the factor MONOVISC incremental say and international it’s expansion CINGAL say haven’t earlier; the of under be positive then related us; recall. piece opportunities. leadership a in launch the to product and particular, given continued the I new Sales for would then mentioned second post is that the color. we add one, our product additional the products, third XXXX that in question surgical will our is, Joe revenues the that and of is growth bone States, of standpoint, From bring believe to fourth and next that Joe the products; we I International VP our for United distributor would which new repair relaunch

revenue. target act you represented recalled recall, think, As about then, of represented from XXXX of products potential the And as three partnerships could a standpoint. and I from that our accelerator there, X% acquisitions about X%, revenue

So, in providing guidance we quarter the fourth speak. budget, look forward we’re and of process XXXX call. a during earnings preparing color as But, the additional to we

Joe Munda

fit equation payment Should the milestone into So, in of does still $X that XXXX? million well? as we that expect

Sylvia Cheung

We are at look that. taking close a

We the preliminary as as QX the year have XXXX. rest analyzing received well we’re information, and of

part increase. that the think, in revenue as of MONOVISC So, of increase I revenue, we can put under the bracket

be something and achieved our exact review well that’s by terms timing partner. whether or will ourselves In under it is not of as as the

Joseph Darling

QX end get have wait with might for in we to in. the end to that a our you it partnership, our of the the in that close when we potentially to year recall to closer feel so discussions of the the may earnings, better year want think Joe, was we come till

Joe Munda

Okay.

question then? timing So, it’s of just a

Joseph Darling

Yes.

Joe Munda

talking And then, model of mean, out I XX, terms lastly, XX, with X, intriguing an we of talk small more possibly we Joe, in are Are thinking? are going force, or like people you size, -- skilled talking regionally? what about here you hybrid highly a sales

Joseph Darling

a and to force. up a to don’t obviously, is great Yes. real that’s need you -- The we’re scale way question, big sales planning

an the population impact neighborhood institutions densities in more have and affect thinking I’m such. where the key some in the the U.S., on placed, So, of of based around roughly X to teaching XX especially you can and of an strategically

So, neighborhood of we’re XX, probably Joe. in to X the

Operator

Company. our & you. of Thank question Jim the from Sidoti comes And Sidoti line with next

now Your open. line is

Jim Sidoti

Sylvia? evening. Good me, Can Joe hear and you

Joseph Darling

Jim. evening. Good We can,

Sylvia Cheung

Good evening.

Jim Sidoti

couple A in you’re the changes that XXXX? revenue of Great. products what distribution going ones. dermal where Europe, of some in One, percent have was quick you said to

Sylvia Cheung

a standpoint. $X approximately was million dermal from XXXX, product revenue In

think, I sub If you it’s $XXX,XXX. look year-to-date business, at dermal the

So, that the voluntary recall. business impacted heavily was by product

to upgrades and that, working were In addition distribution refreshment. network on we

Jim Sidoti

it down the that And I where we with again Should elbow was over and activity HYALOFAST? guess from tennis the for up R&D in was then, assume few also start, pick QX was. starts to QX, the number down next in also the increased as clinical trials QX quarters

Sylvia Cheung

Yes. completion follow-up extension The the The well six for QX for related QX were as is short a answer downward and months the as studies trends to three-month studies. CINGAL yes. of

the quarter, the as Looking fourth ahead that you OVT commence. noted post-market will correctly for European study

to fourth line. add related to expense expect to development about. quarter, given additional do that we also, we would in have the have R&D programs preparation for So, expenses And CINGAL that we that. And expenses that meeting activities FDA R&D up, we incur talked the XXXX, related would go the

Jim Sidoti

And question force? product. your then, be that Will sales launched hybrid the bone through this repair on third

Joseph Darling

It will.

So, it’ll be a hybrid Jim. model, force partnership and sales combination a of the

So, it a of be will Yes. both. combination

Jim Sidoti

fourth me be assume And this in number the is XX% been fourth tax then, a up one that XX%, year going from should and the the rate quarter? is, good to quarter we the between goes or last so that far has for

Sylvia Cheung

slightly came to as or up why QX due the to transition QX, the -- act well implementation recently reform will the item, The expected reasons that probably XX%. QX lower fourth go were non-recurring the than out. were rules for low Jim, and quarter, tax reason as discrete some rates

QX I credits to deductions that do fourth or will that I shouldn’t credit, quarter’s say certain the were low experienced rates able rate deductions one-time the be we the at events. sorry, we through So, related expect not -- QX. tax take additional from to additional

Jim Sidoti

sitting say, the to with I tough get is week wanted you a I or up so. just I there Joe, those Yankee hope then, being all can next how -- it imagine And through

Joseph Darling

Thank that, appreciate you. Jim. I

Operator

question you. the Thank comes And our of Singular with line Lisa next from Springer Research.

Your line open. is now

Lisa Springer

filled? Good system afternoon. take new network that I distribution With you do have Europe? feel added there to were take to core to Are new you about distributor where need be quarter. in wanted ask the partnerships want it in you place, like you that some CINGAL during in holes the the the still those you partners to need

Joseph Darling

it’s of obviously, is, us about a VP Lisa, expand at number the -- for of two, combination spoken and level is are things one. well. Sales, to these is the it’s this with I Number as have distributorship accountability the International one local that factors. think but One into, new commitment the I of a opportunistic Joe, we think

at that’s So, look at; are hard don’t bring the the where need as a I look new presence, where overall we on to performing, where and we have distributors to board. we we market, a need international take not

place that gaps a that in by these parts international to on world. but of believe do the right other we still four the of addition of some have So, in making got we front, had the in new I distributors ways we’ve the distributorships, filled sure go the

will So, of ensure going VP our that the be International it’s process through to international efforts. a Sales constant we’re optimizing

Operator

And you. Thank Summers Andy line Summers the our with Partners. Value question next of comes from

line Your is open. now

Andy Summers

Hi. Thanks question. for taking the

having with you’re of the on with format maybe you of and meeting CINGAL. type the just the FDA So, the meeting? Have starting commented

Joseph Darling

No. not, have Andy. We

Andy Summers

Do you’re you to not willing that’s not -- talk something about?

Joseph Darling

right with kind perspective over set in be a think the way FDA, a up that comfort got of us the level not would it’d from like have, to competitor the a right the a call I we’ve situation meetings complex which this. feeling now necessarily conversation put

Andy Summers

But, data right? that Is Okay. the nine-month in package. have that the you’re did to submission confirm you going

Joseph Darling

to the We’re data actually all including package, absolutely. the the going nine-month into Yes. data take submission

Andy Summers

as the from expect quarter the you the FDA first in well to minutes do meeting? XXXX And have of

Joseph Darling

I’d we but… of figure on what would out have would that minutes, the exactly would you meeting. we’ll back out I to that get coming assume, we I would. to have have assume to honestly

Andy Summers

Okay.

the the and forward of that you’ll Is communicate to have then shareholders. minutes, able that with right? decide sort path you you once So,

Joseph Darling

Yes. The been a done, through key that approval is walking pathway is there talking sitting and about down making the with then them, data, agreement sure that have forward different studies product. for to on the the

Andy Summers

And one Okay. Phase could another program be large scenarios? of scale X the

Joseph Darling

And the markets. FDA see down But, the I approval commitment a a it’s of us to same call for articulated the in sit with the well make very product. for we the rather in today, this We done important till in expect international before U.S. as would is like product CINGAL that. upon us. very we I’d wait

the of and U.S. we’re committed very the future CINGAL this into to So, product coming

Andy Summers

roughly sounds million over is like And What have It you’re you for now. ex-U.S. the quantified be what $X that CINGAL? you sales doing think could of opportunity time?

Sylvia Cheung

opportunity quite of The can U.S. large. recent achievements. think, now, I outside Right are -- be broader additions is recent of four of building examples network the out we’re process the in a distribution the much

receive we’re approval at that about additional XX next near-term so a countries, that have to half the dozen countries charts, there’s the countries looking or And these approval we CINGAL we target within months. on. expect working Beyond

do to a revenue revenue growth. standpoint, expect from contributor we growth our be for So, to continue a meaningful CINGAL

Andy Summers

product. or to between And gears between other approval surgical switching launch? launch, the factors that the delay repair is concept solely and of to is the due bone this the it gating and kind gap approval the the caused partnering the Is just there

Joseph Darling

December the by approval a which took The was approval, simple this is answer past to that us pretty surprise. rapid

at we ready is production, one do weren’t want Typically, of not shot weren’t point. ready reflection a I that And the get you’re we for product scale-up Purely being with to seeing a approval. at you commercial what really right. ready launch. this upon in So, unfortunately plan

product our to we’ve want and accelerate I people right the penetration that correctly place, doing can place the we we strong it time. in in we’ve make when in the So, launch first got by partner distribution the field, the good a sure market in got that

Andy Summers

on just half around comment you’re this of toward can launch... December you expecting second happen Okay. the in XXXX, or whether And, to July more

Joseph Darling

Yes.

a to point I’ll from perspective frame looking starting of accelerating in go are these that the and I in what sure start marketing because with they what the launch with to at by that and in so partnership June-July clinical as have adequate specialists time there, them is, and in make So, the the in materials call through And we in we soft a product. the full use timing mid-year, of that put place you and then launch appropriately is, see want that converting part we’re time. accounts and reason

want would call a into launch what I a we soft call into full-scale I the second to accelerate from hard mid-year it and move half. I my perspective, launch, So, think then as

Andy Summers

little this new here? a more provide is in product you the to used additive around the that’s how opportunity? could then, color going about to that’s today market fit Will to replace being And or and something Could existing be talk this already just surgeries? paradigm Okay. you is to product this something going

Joseph Darling

is, basis. which Couple big competitive We there should products the throughput products, a are in setup advantage time time. the start per marketplace. One things. than OR our through minute a is OR you when with an competitive have to measure of do The quicker on factor be

So, competitive the in we wanted will to may time factor setup the of that due capturing involved also have users not be product. use to products

move scale this a applications particular when on bigger in or market. look fractures a will neck product as play the and at So, take we high-level a femoral think fractures this stress plateau into I tibial you even fractures, role

Andy Summers

just to or whether forward? partnership you the upfront this deal seen are partnership just yet, partnership since economics structure, we going royalty how comment not a And or of a some or just about expecting is are thinking receive along you payments with basically a haven’t on you can a

Joseph Darling

here, me to said, environment be the I still you’re table. A cards explain being to the negotiating this I But, Andy. trying that things, want advantageous couple be to because for wouldn’t obviously of where got careful on to all an put in make market, of market. the we two, pricing over in in product to control model a that how have do the us gives sure want obviously we degree priced the authority of the that more Number product one. a number is the positioning

about deal signed can’t about because I prefer are usually you the and talk is of process, we speculating, to economics So, so. once the know, things that these all than talk really and delivered long a today, the deal, as

Operator

Thank follow-up line of from you. question Research. the And we Barrington with Mike do have a Petusky

line now Your open. is

Mike Petusky

on here. try Yes. commentary. rate to I’ll quick Sylvia, just be your tax

more changed into you’ve that look is XX%, As one would longer likely, term, dug that? -- as a think thought XX%. you tax a there guys longer that term? point, was at effective it, about Has you or more Have your found can maybe like talk lower I be rate maybe that XX% you tax

Sylvia Cheung

the transition So, for the opportunities to additional that rate. after all And in we saw recent is our an we we implementation XXXX, low-XX% quarter lower a rate. reform guidance, tax fourth reviewed feel and currently appropriate

closer during a will budget that during the take the to expectation at and need provide we call. earnings look XXXX, for process, the we QX forward Going

Mike Petusky

about term to then, is call longer-term going plan out, just conference could that with you And When one. to, year-end be of more think is are you ready that the quick shared think plan, roll Joe, strategic a that or you a project? be strategic longer something

Joseph Darling

we’ve first of the as the of got plan couple is, it the in Board XXXX. well, timeframe One Mike, things. completion, quarter we on to planned doing for early through bring which

think where the can comprehensive intend very be But when be future because a share, to from in we of timeframe to I it steer sometime ready going before the it’s direction Anika perspective. to approved. be early got will it’s obviously XXXX we strategic for So, share we’re to it,

Mike Petusky

CapEx the the Sylvia, have and last any just And quarter by amortization one. expense Do depreciation for you chance? and

Sylvia Cheung

million. standpoint, million. and months approximately is comp, a Mike, spending to stock-based a $X.X nine standpoint, approximately million. at amortization from depreciation date, And million item, it’s looking from a $X also that’s And CapEx $X we non-cash $XX to which approximately are

Operator

no time. like Thank you. And the I’m Mr. call return showing questions any And to to at Darling this remarks. closing further for I’d Joseph

Joseph Darling

all Sandra. Thank you, time for today. And you your of you thank to

Thank growth term us. long in the growth you we And a we drive to you. proud have our of our many And both shareholders. continuing third execute and evening. front update to to near initiatives very are as great forward on about in very progress our on excited of We opportunities look quarter. We’re for our progress the

Operator

Ladies conclude great today’s does may conference. you This day. And Everyone, all and gentlemen, you disconnect. participating a have in the for program. thank

Anika Therapeutics (ANIK) 24 Oct 182018 Q3 Earnings call transcript