Full Press Release Details
Therapeutics Reports 17% Increase in Third Quarter Product Revenue
Reports Strong Initial Sales of ELEVESS in the U.S. Strong Domestic and
European Sales Drive Increase in Joint Health Revenue
BEDFORD, Mass.--(BUSINESS WIRE)--November 3, 2008--Anika Therapeutics,
Inc. (Nasdaq: ANIK), a leader in products for tissue protection, healing
and repair based on hyaluronic acid ("HA") technology, today reported
strong revenue growth for the third quarter of 2008.
"This was another excellent quarter for Anika, as we executed on our
strategic goals of bringing our ELEVESS product line to market and
broadening our product portfolio and geographic reach in joint health
therapies," said Charles H. Sherwood, Ph.D., Anika's president and chief
executive officer. "It is clear to us that the significant investments
we have made during the past year are positioning us well for continued
strong revenue growth, not only domestically, but worldwide in each of
the markets we serve."
During the quarter, Anika expanded its global position in joint health
therapies with the announcement of a new distribution agreement in Latin
America for ORTHOVISC and ORTHOVISC mini, as
well as sales into the European Union for its single-injection
osteoarthritis product MONOVISC , for the relief of
knee pain. Domestic revenue from its flagship ORTHOVISC product
increased by 26 percent in the United States and Anika also reported
strong initial revenue and positive market reception for its
breakthrough cosmetic dermal filler product, ELEVESSTM.
Anika's product revenue increased by 17% to $8,524,000 for the third
quarter of 2008, compared with $7,283,000 in the same period last year.
Product revenue for the nine-month period of 2008 grew 30% to
$24,770,000 from $18,989,000 in the nine-month period of 2007. The
increase in product revenue for the quarter was primarily attributable
to strong domestic and international revenue from the Company's
ORTHOVISC product line, as well as gains from its equine osteoarthritis
product, HYVISC, and MONOVISC sales within the European Union.
Total revenue for the third quarter of 2008 increased 16% to $9,205,000,
compared with $7,965,000 in the third quarter of 2007. Total revenue for
the nine-month period of 2008 increased 26% to $26,814,000 compared with
$21,203,000 for the same period in 2007.
Product Gross Margin
Product gross margin for the third quarter of 2008 increased to 59% from
57% in last year's third quarter. For the nine-month period of 2008,
product gross margin increased to 58% compared with 54% for the same
period in 2007. The improvement in gross margin for both periods was
due primarily to unit growth and strong domestic and international
ORTHOVISC revenue as well as the impact of sales from our new products.
Other Operating Expenses
In accordance with the Company's plans, research and development expense
increased 60% to $1,801,000, compared with $1,256,000 for the same
period last year, primarily due to clinical trials in the U.S. and
Europe for MONOVISC, manufacturing scale-up activities for ELEVESS and
MONOVISC, and development activities in joint health.
As planned, selling, general and administrative expense increased 41% to
$2,567,000, compared with $1,821,000 for the same period last year, due
to facility costs at Anika's Bedford facility which commenced in May 1,
2007, increased personnel costs and marketing expenses in connection
with new products in the joint health and aesthetic franchises, and
higher professional costs related to strategic and corporate projects.
Total operating expenses, excluding cost of product revenue, were
$4,369,000 for the third quarter of 2008 compared with $2,947,000 for
the third quarter of 2007. Total operating expenses, excluding cost of
product revenue, for the nine-month period of 2008 were $13,470,000
compared with $8,081,000 for the same period in 2007.
Net income for the third quarter of 2008 was $1,104,000, or $0.10 per
diluted share, compared with $1,796,000, or $0.16 per diluted share, for
the same period last year. Net income for the nine months of 2008 was
$2,535,000, or $0.22 per diluted share, compared with $4,362,000, or
$0.38 per diluted share, for the same period in 2007. The decrease in
net income in the third quarter and nine-month periods of 2008 over last
year was due to higher operating expenses, consistent with the company's
plans to invest in its new facility, product development and market
Anika's cash, cash equivalents and short-term investments at September
30, 2008 were $35,368,000, compared with $39,406,000 at December 31,
2007. The decrease reflects the Company's investment in its new facility
to increase capacity and upgrade its new product development
capabilities. As of September 30, 2008, the Company has expended
$27,000,000 of its $30,000,000 project capital budget, of which it has
borrowed $8,000,000 under its facility related line-of-credit, and
expects to borrow up to an additional $8,000,000 by the end of the year
for a total debt outstanding of $16 million.
Management Commentary
"Our joint health franchise continues to be a key driver of Anika's
growth, with revenue from our flagship joint health product, ORTHOVISC,
up 25 percent compared with the third quarter of 2007," said Charles H.
Sherwood, Ph.D., Anika's president and chief executive officer. "During
the quarter, we broadened our geographic reach for this product line
with the establishment of a new Latin America distributor agreement with
our long-time partner DePuy Mitek. Our recently launched MONOVISC
single-injection osteoarthritis product is being well received in
Europe. We recently completed a six-month clinical study in the EU with
very positive preliminary data and are looking forward to introducing
MONOVISC to additional European markets that are predisposed to a
single-injection osteoarthritis treatment option. We also are making
good progress on our U.S. pivotal trial for MONOVISC and expect to
complete enrollment in the fourth quarter of this year."
"Another highlight of the quarter was the fast launch of our ELEVESS
cosmetic dermal filler in the U.S. with our partner Artes Medical,"
continued Sherwood. "In less than two months, we achieved strong sales
and are on track to reach our target of between $1.0 and $1.5 million in
revenue for Anika by the end of the year. The product has been well
received by both doctors and patients alike and we are very pleased with
the capabilities of the Artes team in introducing this product to the
marketplace. ELEVESS has generated great interest in other areas around