Full Press Release Details
Reports Fourth Quarter and Full Year 2018 Financial Results
Bottom Line Performance with $0.54 Diluted EPS for Fourth Quarter of 2018
and CINGAL Global Revenue Increased 14% for Full Year of 2018
BEDFORD, Mass.--(BUSINESS WIRE)--February 21, 2019--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 fourth quarter and full year ended December 31, 2018, and provided
an update on its business progress in the periods.
"Anika continued to deliver strong earnings and cash flow in the fourth
quarter, entering 2019 well-positioned to further build on the
foundation that will drive the Company's next phase of growth," said
Joseph Darling, President and Chief Executive Officer of Anika
Therapeutics. "During the quarter, MONOVISC and CINGAL end user demand
remained strong. We also successfully expanded the reach of our
orthobiologics business in Europe, Asia, Africa and South America with
the addition of eight new international distributors during the year. We
were pleased to resume global production and distribution of HYALOFAST,
HYALOGRAFT-C and HYALOMATRIX, and look forward to benefitting from our
full complement of products in 2019. We believe 2019 will be a
transformational year for Anika and we will continue to take advantage
of the multiple levers available to advance our long-term goal of
returning to annual double-digit revenue growth. We are focused on solid
execution and increasing efficiency and productivity, as we address our
challenges and continue to expand our commercial reach, advance our
pipeline and drive value for our shareholders."
Fourth Quarter and Full Year Financial Results
Total revenue for the fourth quarter of 2018 was $27.0 million,
compared to $29.4 million for the fourth quarter of 2017. Total
revenue for the full year of 2018 was $105.6 million, compared to
$113.4 million for the full year of 2017. The decrease in revenue for
the quarter and full year of 2018 was due primarily to the impact from
the voluntary recall and lower U.S. viscosupplement pricing. 2017
results also included the achievement of $5.0 million of milestone
revenue as a result of MONOVISC reaching $100 million in U.S. end-user
sales within a consecutive 12-month period.
Global Viscosupplement revenue increased slightly for the full year of
2018. Global MONOVISC and CINGAL revenue increased 14% for the full
year of 2018, providing evidence of strong favor toward the Company's
innovative treatments.
Total operating expenses for the fourth quarter of 2018 were $17.2
million, compared to $19.7 million for the fourth quarter of 2017. The
year-over-year decrease in total operating expenses for the fourth
quarter of 2018 was due primarily to lower cost of product revenue.
Total operating expenses for the full year of 2018 were $83.8 million,
compared to $67.7 million for the full year of 2017. The increase in
total operating expenses for the full year of 2018 was due primarily
to a one-time charge of $8.4 million in the first quarter, which
consisted mainly of non-cash stock-based compensation expense
associated with the retirement of Anika's former Chief Executive
Officer, approximately $2.0 million of non-recurring CINGAL U.S.
pre-launch market research activities in the first half of 2018, and
increased personnel and professional service costs.
Net income for the fourth quarter of 2018 was $7.7 million, or $0.54
per diluted share, compared to $8.1 million, or $0.53 per diluted
share, for the fourth quarter of 2017. Net income for the full year of
2018 was $18.7 million, or $1.27 per diluted share, compared to $31.8
million, or $2.11 per diluted share, for the full year of 2017. The
decline in net income for the full year of 2018 was due primarily to
the decrease in total revenue and increase in operating expenses
previously discussed.
Cash, cash equivalents and investments were $159.0 million as of
December 31, 2018, compared to $149.0 million as of September 30,
2018. Cash provided by operating activities was $10.0 million for the
fourth quarter of 2018 and approximately $35.0 million for the full
Recent Business Highlights
Resumed global distribution of HYALOFAST, HYALOGRAFT-C and HYALOMATRIX
in the fourth quarter after a voluntary, non-safety related recall in
the second quarter of 2018.
Expanded the international commercial reach of the orthobiologics
business in Europe, Asia, Africa and South America with the addition
of eight new international distributors.
Completed a product prototype of the Company's Rotator Cuff repair
On-track to complete a 5-year strategic plan in the first half of 2019.
Continued evaluation of potential partnership opportunities for the
Company's product pipeline, which is an important element of its
5-year strategic plan.
Anika recently met with the U.S. Food and
Drug Administration (FDA) to discuss the totality of available CINGAL
data, including information from the 17-02 extension study and real
world evidence from physicians in Canada and Europe, to gain additional
guidance on the pathway for CINGAL approval in the U.S. Based on that
meeting, it has become clear that Anika will need to conduct another
Phase III clinical trial before it can obtain approval for CINGAL in the
U.S. The Company plans to continue to work with the FDA and pursue the
most expeditious path to FDA approval for CINGAL. The Company will
provide updates on its progress on this initiative at appropriate
intervals moving forward.
Full Year 2019 Corporate Outlook
For the full year of 2019,
the Company expects total revenue to be approximately 3% to 6% below the
prior year level due primarily to continued pricing pressures on its
U.S. viscosupplement business. Licensing, milestone and contract revenue
is expected to be flat for the year. Total operating expenses are
anticipated to be in the high $70 million to $80 million range. Adjusted
EBITDA is expected to be in the low $30 million range, which is based on
anticipated U.S. GAAP net income in the mid-teen to around $20 million
range. Capital expenditures are expected to be between $5 million and $8
million. In 2019, the Company plans to continue advancing key ongoing
initiatives, including: