Full Press Release Details
Therapeutics Reports 29% Total Revenue Growth in Third Quarter 2010
Integration and Manufacturing Consolidation Continue on Schedule;
Company Files with FDA for 510(k) Approval of Three FAB Orthopedic
BEDFORD, Mass.--(BUSINESS WIRE)--November 8, 2010--Anika
Therapeutics, Inc. (Nasdaq: ANIK), a leader in products for tissue
protection, healing, and repair, based on hyaluronic acid ("HA")
technology, today reported financial results for the quarter ended
Third-Quarter Highlights
Total revenue and product revenue up 29% and 31%, respectively
Orthobiologics revenue rises 25%, driven by strong U.S. sales of
510(k) submissions completed for three FAB joint health products
Continued progress on PMA application for MONOVISC
Key milestones achieved in FAB information systems integration
Anika's consolidated product revenue increased 31% to $13.2 million for
the third quarter of 2010, from $10.1 million in the third quarter of
2009. Excluding revenue from Fidia Advanced Biopolymers, s.r.l. ("FAB"),
which was acquired by Anika late in the fourth quarter of 2009, product
revenue grew 14% from the third quarter last year. This growth was
primarily due to continued strong U.S. sales of the Company's ORTHOVISC
product line as well as increased contribution from international sales
Total revenue for the third quarter of 2010 increased 29% to $13.9
million, from $10.8 million in the year-earlier quarter.
Product Gross Margin
Product gross margin for the third quarter of 2010 was 54%, compared
with 65% in the third quarter last year. The decrease in product gross
margin largely reflected the addition of FAB products into Anika's
overall product mix, and duplicate manufacturing expenditures during the
transition from Woburn to our Bedford, MA facility.
Research and development expenses for the third quarter of 2010
decreased to $1.8 million, from $2.4 million in the third quarter of
2009. Spending declined subsequent to the completion of Anika's U.S.
MONOVISC clinical trial in the third quarter of 2009. This decline was
partially offset by the inclusion of FAB's R&D expenses.
Selling, general and administrative expenses for the third quarter of
2010 increased to $3.9 million from $2.8 million in the same quarter of
2009, primarily as a result of the addition of FAB's SG&A costs
including integration costs.
Operating and Net Income
Operating income for the third quarter grew 3% to $2.1 million, compared
with $2.0 million in the same period last year. However, this operating
income increase was more than offset by higher taxes as the Company
increased its estimated tax rate for 2010 to 39.6% from 38% estimated in
the second quarter. The reasons for the tax rate increase in 2010 are
lower investment tax credits and R&D credits in 2010 versus 2009, and
the impact of FAB's losses on our blended tax rate. As a result, net
income for the third quarter of 2010 decreased to $1.2 million, or $0.09
per diluted share, compared with $1.5 million, or $0.13 per diluted
share, for the same period last year. The comparison with the third
quarter of 2009 was also negatively impacted by the dilutive effect of
the FAB acquisition.
Cash and Cash Equivalents
Anika's cash and cash equivalents at September 30, 2010 were $25.8
million, compared with $24.4 million at December 31, 2009.
Management Commentary
"Anika continued to perform well in the third quarter," said Charles H.
Sherwood, Ph.D., president and chief executive officer. "Driven by
strong domestic sales of ORTHOVISC, it was our 13th
consecutive quarter of year-over-year product revenue growth, and we
advanced in significant ways on our key goals. The first of these goals
is to continue growing sales of ORTHOVISC. All the key indicators for
ORTHOVISC are moving in the right direction, including growth in sales
"With FAB, our pipeline is broader and stronger than ever, and our
second goal is to receive FDA approval and launch FAB orthobiologics
products in the United States," said Sherwood. "We submitted 510(k)
applications for three FAB products in the third quarter, and expect to
receive our first approval by year-end 2010 with two others to follow in
the first quarter of 2011."
"Our third key goal focuses on the U.S. launch of MONOVISC - our
single-injection osteoarthritis product," Sherwood said. "We continued
to make progress on our PMA application in the third quarter, submitting
our responses to questions stemming from our meeting with the FDA in May
2010. At the same time, we are continuing efforts to expand distribution
of FAB's tissue technology products outside of Italy, which is our
"Our fifth goal is to reduce FAB's operating loss," Sherwood said. "A
key focus in our efforts to improve FAB's bottom line is to drive FAB
product revenue growth, and launching the first FAB joint health and
advanced wound care products into the U.S. market will be an important
step in this direction. At the same time, our FAB integration process is
moving forward on schedule and is beginning to deliver the anticipated
"This was also another quarter of progress toward our sixth goal -
consolidating Anika's U.S. manufacturing operations in Bedford,
Massachusetts," said Sherwood. "We hit critical building system and
validation milestones on schedule. As a result, we are now fully
operational in Bedford for Anika's entire cross-linked product line."
"In summary, Anika again delivered solid top-line growth in the third
quarter, while we continued to execute successfully on our strategic
goals," Sherwood said.
Conference Call Information
Anika will hold a conference call to discuss its financial results,
business highlights and outlook tomorrow, Tuesday, November 9, 2010 at
9:00 a.m. ET. In addition, the Company will answer questions concerning
business and financial developments and trends, and other business and
financial matters affecting the Company, some of the responses to which
may contain information that has not been previously disclosed.
To listen to the conference call, dial 800-291-5365 (International
callers dial 617-614-3922) and use the passcode 62761665. Please call
approximately 10 minutes before the starting time and reference Anika
Therapeutics. In addition, the conference call will be available through
a live audio webcast in the "Investor Relations"
section of the Anika Therapeutics website, www.anikatherapeutics.com.