Full Press Release Details
Therapeutics Reports 28% Increase in Revenue for Second Quarter 2008
Health Revenues Increase by 79% on Strong Domestic and European Sales
BEDFORD, Mass.--(BUSINESS WIRE)--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 quarter ending June 30, 2008. Anika continued to
strengthen its global position in joint health therapies with the
European launch of its single-injection osteoarthritis product, MONOVISC ,
for the relief of knee pain as well as the further domestic and
international penetration of its flagship joint health product, ORTHOVISC .
The Company also recently partnered with Artes Medical to market and
distribute its cosmetic dermal filler, ELEVESS , in the
Anika's product revenue increased by 32% to $8,379,000 for the second
quarter of 2008, compared with $6,332,000 in the same period last year.
Product revenue for the first six months of 2008 grew 39% to $16,246,000
from $11,706,000 in the first six months of 2007. The increase in
product revenue for the quarter was primarily attributable to strong
domestic and international sales of the Company's ORTHOVISC product
line, as well as gains from its equine osteoarthritis product, HYVISC,
and initial MONOVISC sales.
Total revenue for the second quarter of 2008 increased 28% to
$9,060,000, compared with $7,100,000 in the second quarter of 2007.
Total revenue for the first six months of 2008 increased 33% to
$17,609,000 compared with $13,238,000 for the same period in 2007.
Product Gross Margin
Product gross margin for the second quarter of 2008 increased to 57%
from 52% in last year's second quarter. For the first six months of
2008, product gross margin was 58% compared with 53% for the same period
in 2007. The improvement in gross margin was due primarily to overall
unit growth as well as growth in domestic and international ORTHOVISC
Other Operating Expenses
Research and development expense increased 65% in the second quarter to
$1,645,000 compared with $996,000 for the same period last year.
Research and development expense for the first six months of 2008 were
$3,153,000 compared with $1,843,000 for the same period last year. The
increases in both the second quarter and year-to-date periods were
primarily due to clinical trials in the U.S. and Europe for MONOVISC,
scale-up activities for MONOVISC in connection with the European launch,
and development activities in joint health.
Selling, general and administrative expense increased 68% in the second
quarter to $2,880,000 compared with $1,716,000 for the same period last
year. Selling, general and administrative expense for the first six
months of 2008 were $5,949,000 compared with $3,291,000 for the same
period in 2007. The increases in both the second quarter and
year-to-date periods were primarily the result of marketing expenses
associated with the launch of our new products, increased personnel
costs, expenses related to the Company's new headquarters facility, and
higher legal and consulting costs related to strategic projects.
Net income for the second quarter of 2008 was $813,000, or $0.07 per
diluted share, compared with $1,365,000, or $0.12 per diluted share, for
the same period last year. Net income for the first six months of 2008
was $1,430,000, or $0.12 per diluted share, compared with $2,566,000, or
$0.23 per diluted share, for the first six months of 2007. The decrease
in net income in the second quarter and first six months of 2008 over
last year was due to the Company's planned investment in clinical
trials, product development and higher operating expenses as outlined
Anika's cash and cash equivalents at June 30, 2008 were $37,297,000
compared with $39,406,000 at December 31, 2007. The decrease reflects
the Company's investment in its Bedford facility to increase capacity
and upgrade its new product development capabilities. As of June 30,
2008, the Company has borrowed $8,000,000 under its $16,000,000
line-of-credit in connection with its Bedford facility build-out.
Anika Therapeutics recently received a Warning Letter from the FDA in
response to an earlier FDA Form 483 Notice of Observations issued to the
Company following an inspection at the Company's Woburn facility. Anika
has fully cooperated with the FDA to address the issues in the Form 483
filing and has issued a response to the FDA's Warning Letter. The
Company has developed a corrective action plan, will provide the FDA
with progress reports as promised, and looks forward to our next
inspection. Product quality is the highest concern to Anika Therapeutics
and the Company is committed to the continual improvement of its quality
systems and investing to make those systems best-in-class.
Management Commentary
"We performed well in the second quarter from both a financial and
operational standpoint," said Charles H. Sherwood, Ph.D., Anika's
president and chief executive officer. "Our joint health franchise
continues to gain traction in domestic and international markets, with
sales from our flagship joint health product line, ORTHOVISC, up 70
percent compared with the second quarter of 2007. Our HYVISC product for
equine arthritis also posted nice growth with a 46 percent increase in
"The quarter was punctuated with the achievement of two major
milestones," continued Sherwood. "First, we executed on our strategy to
broaden our joint health franchise with new indications and
differentiated features with the European launch of MONOVISC, our
single-injection osteoarthritis product for the relief of knee pain.
MONOVISC is based on Anika's proprietary cross-linking technology and
feedback from patients and physicians has been very positive. We're
making good progress on our U.S. pivotal trial for MONOVISC and expect
to complete enrollment in the fourth quarter of this year."
"Another recent major milestone was our agreement with Artes Medical to
be Anika's marketing and distribution partner for ELEVESS, our cosmetic
dermal filler," added Sherwood. "With an existing, highly complementary
dermal filler product, and a seasoned, 42-person sales force experienced
in this space and very well trained, Artes Medical is an ideal partner
to bring ELEVESS to market. With the pending launch of ELEVESS in the
U.S., we are now aggressively seeking international marketing and
distribution partners to commercialize ELEVESS around the globe. We have
had a significant number of companies approach us and we are evaluating
partners with characteristics and capabilities similar to Artes Medical."
"During the second half of the year, we will continue to focus on