Full Press Release Details
Reports First Quarter 2018 Financial Results
Leadership Transition in Evolution to a Global Commercial Organization;
and CINGAL Global Revenue Increased 38% Year-over-Year;
Voluntary Recall of HYALOFAST, HYALOGRAFT-C and HYALOMATRIX
BEDFORD, Mass.--(BUSINESS WIRE)--May 2, 2018--Anika Therapeutics, Inc.
(NASDAQ: ANIK), a global, integrated orthopedic and regenerative
medicines company specializing in therapeutics based on its proprietary
hyaluronic acid ("HA") technology, today reported financial results for
the first quarter ended March 31, 2018, along with business progress in
"In the first quarter, Anika saw strong growth in its most prominent
product categories and continued to take the steps necessary to
transform the Company into a fully integrated, global commercial
organization," said Joseph Darling, President and Chief Executive
Officer of Anika Therapeutics. "Global MONOVISC revenue increased 29%
year-over-year, and end-user demand for CINGAL in Europe and Canada
remained strong in the first quarter. Together, MONOVISC and CINGAL
global revenue grew 38% year-over-year. However, that growth was
countered by soft ORTHOVISC revenue, non-recurring charges related to
the planned CEO transition, and a voluntary recall of three HYAFF-based
Mr. Darling continued, "We are rapidly advancing the CINGAL Phase III
trial, with the completion of the 6-month patient follow-up in April.
Our entire leadership team is energized and focused on delivering our
new and innovative solutions to the market, accelerating our revenue and
earnings growth in the years ahead, and creating sustained value for our
First Quarter Financial Results
Total revenue for the first quarter of 2018 was $21.3 million,
compared to $23.4 million for the first quarter of 2017. The
year-over-year decline was due in part to $1.1 million related to the
voluntary, non-safety related recall of HYALOFAST, HYALOGRAFT-C, and
Worldwide Orthobiologics revenue decreased $0.7 million year-over-year
in the first quarter of 2018, due primarily to lower ORTHOVISC
revenue. Global MONOVISC revenue increased 29% year-over-year in the
first quarter of 2018, resulting from our international expansion
efforts and the industry shift from multi- to single-injection
International Viscosupplementation revenue increased 17% for the first
quarter of 2018, due primarily to the global expansion of MONOVISC, as
well as the growth of CINGAL in the international markets.
Domestically, ORTHOVISC and MONOVISC achieved the number one position
in the combined multi- and single-injection segments in the first
Total operating expenses for the first quarter of 2018 were $29.1
million, compared to $15.4 million for the first quarter of 2017. The
increase in total operating expenses was due primarily to a one-time
charge of $8.4 million, which consisted mainly of non-cash stock-based
compensation expense associated with the retirement of our former CEO.
Net loss for the first quarter of 2018 was $6.7 million, or ($0.46)
per diluted share, compared to net income of $5.5 million, or $0.37
per diluted share, for the first quarter of 2017. The decline in net
income was due primarily to the increase in operating expenses
previously discussed.
Recent Business Highlights
The Company made key commercial, pipeline and operational advancements,
Appointing Joseph Darling as Chief Executive Officer and as a Director
to succeed Dr. Charles Sherwood, who retired as Chief Executive
Officer and a Director in March 2018. Mr. Darling joined Anika as
President in late July 2017, bringing more than 20 years of extensive
experience in executive management and leadership skills from
publicly-traded, commercial-stage companies, including Abbott
Laboratories, Baxter Healthcare, Smith & Nephew, CONMED, and
Advancing its product pipeline with the completion of 6-month patient
follow-up in the CINGAL Phase III study for the treatment of
osteoarthritis pain in the knee, continued progress in the CINGAL
3-month extension study and the FastTRACK Phase III HYALOFAST Study
for cartilage repair, as well as the Phase III MONOVISC study for the
treatment of osteoarthritis pain in the hip.
Continuing the development of a direct commercial capability in the
United States to support the planned U.S. launch of CINGAL in 2019 and
other new therapies in the years ahead.
Voluntary Recall of HYALOFAST, HYALOGRAFT-C and HYALOMATRIX
The Company is undertaking a voluntary recall of certain lots of its
HYALOFAST, HYALOGRAFT-C, and HYALOMATRIX products. While there is no
indication of any safety or efficacy issue related to the affected
products at this time, the Company remains committed to the highest
standards of quality and is removing the products from the field as a
precautionary measure. The recall is being initiated by the Company
following internal quality testing which indicated that the products
were at risk of not maintaining certain measures throughout their entire
shelf life. All impacted distributors have been notified of the recall,
and the Company is taking all appropriate actions with respect to
applicable regulatory authorities. The Company is in the process of
identifying and implementing the appropriate operational resolution of
the underlying issue, and it expects to fully resolve the matter and
resume production and shipping by the end of 2018. The HYALOFAST product
being used to conduct the ongoing Phase III clinical trial was not
impacted by the recall.
The voluntary recall negatively impacted the Company's financial results
for the first quarter of 2018 by $1.1 million in product revenue, $0.6
million in inventory reserves, and $0.4 million in administration costs
related to the recall. HYALOFAST, HYALOGRAFT-C, and HYALOMATRIX revenue
totaled approximately 3% of total revenue for the full year of 2017.
"This voluntary recall is based on the Company's commitment to the
highest standards of quality for which we are known around the globe,"
continued Joseph Darling. "While there is no indication of any impact on
the safety or efficacy of the product at this time, we cannot accept any
deviation from our stringent quality measures. Our quality and
engineering staff are working diligently to resolve the issue in order
to bring these products back into the hands of surgeons who have used
the products to treat patients in need."
Full Year 2018 Revised Corporate Outlook
Based on Anika's first quarter 2018 results and currently available
information, the Company revised its guidance for the full year of 2018.