Full Press Release Details
Therapeutics Reports Fourth-Quarter and Full-Year 2014 Financial Results
Receives Unique J-Code Assignment from CMS Effective January 1, 2015
Revenue for 2014 Increases 41% to a Record $106 Million with Net Income
BEDFORD, Mass.--(BUSINESS WIRE)--February 25, 2015--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 and full year ended December 31, 2014.
Management Commentary
"Anika delivered strong financial results for the year, marked by a
record $105.6 million in total revenue and $38.3 million in net income,"
said Charles H. Sherwood, Ph.D., President and Chief Executive Officer.
"We achieved several key business milestones that position the Company
well for continued success into the future. The exceptional clinical,
regulatory and commercial milestones we accomplished in 2014 have set
the stage for solid financial results in 2015 and accelerated profitable
growth in future years."
"With its unique J-Code taking effect in January, Monovisc has the
potential to deliver significant increases in product revenue in the
quarters ahead. At the same time, Orthovisc continues
to successfully maintain its market leadership in the U.S.
multi-injection segment and remains the number-two U.S. brand in
viscosupplementation overall. Looking farther ahead, we have two new
products - Cingal and Hyalofast
- advancing toward commercialization, and we have submitted both our CE
Mark application and a PMA for Cingal. Beyond these two products, our
development pipeline is the strongest it has been in many years, with an
increasing focus on regenerative medicine and products that have the
potential to dramatically expand Anika's market opportunities."
"Anika is strongly positioned financially and operationally as we begin
2015. We have an established manufacturing business and a history of
consistent, commercially driven product revenue growth. We have a record
of reliably achieving product development milestones, as well as key
product approvals in the U.S., Europe and the rest of the world, and we
possess an expanding development pipeline. In addition, the Company has
successfully acquired and integrated a business that has expanded our
markets, and we have the balance sheet strength to be active in the M&A
arena. In simple terms, we have a proven track record of running an
established company and a profitable one," concluded Sherwood.
Anika's total revenue for the fourth quarter of 2014 was $23.3 million,
compared with $21.3 million in the fourth quarter of 2013. For the full
year 2014, total revenue grew 41% to $105.6 million from $75.1 million a
year earlier. Product revenue increased to $75.5 million in 2014 from
$71.8 million in 2013. The increases in total revenue and product
revenue versus the prior year periods were largely driven by higher
domestic viscosupplementation revenue. Included in the record 2014 total
revenue was milestone and contract revenue of $30.1 million, primarily
resulting from the achievement of Monovisc U.S. product approval,
resolution of the related patent litigation, the first commercial sale
of the product in the market and the assignment of a unique J-Code to
the product. Milestone and contract revenue in 2013 included the ratable
recognition of the final $2.7 million in up-front and milestone payments
previously received under the U.S. Orthovisc licensing agreement.
Product Gross Margin
Product gross margin for the fourth quarter of 2014 remained consistent
with the corresponding quarter of 2013 at 69%, with both quarters'
results reflecting a increased level of Ophthalmic franchise revenue in
the Company's sales mix. For the full year 2014, product gross margin
improved to 72% from 68% in 2013. This full-year improvement was driven
by a more favorable product mix, as well as efficiency gains and cost
Total operating expenses for the fourth quarter of 2014 were $11.2
million, compared with $10.8 million for the same period a year earlier.
For the full year 2014, total operating expenses were $44.1 million,
compared with $42.5 million in 2013. Fourth-quarter research and
development expenses were flat with the year-earlier quarter at $2.0
million. For full year 2014, research and development expenses increased
to $8.1 million from $7.1 million in 2013 due to higher Cingal clinical
trial expenses. Selling, general and administrative expenses for the
fourth quarter increased 53% from the year-earlier quarter, primarily
reflecting a one-time favorable legal settlement in the fourth quarter
of 2013. The prior-year's favorable legal settlement receipt, together
with increases in external professional fees and headcount related costs
contributed to a 17% increase in selling, general and administrative
expenses for 2014 as compared to 2013.
Operating and Net Income
Operating income for the fourth quarter of 2014 increased to $12.1
million from $10.4 million in the fourth quarter last year. For full
year 2014, operating income rose to $61.4 million, up from $32.6 million
in 2013. Net income for the fourth quarter was up 17% to $7.8 million,
or $0.51 per diluted share, from $6.7 million, or $0.44 per diluted
share, in the year-earlier quarter. For full year 2014, net income
increased 86% to $38.3 million, or $2.51 per diluted share, from $20.6
million, or $1.39 per diluted share, in 2013. Operating income, net
income and earnings per share were higher versus the prior year periods
primarily due to increased milestone revenue.
Cash, Cash Equivalents and Investments
Anika's cash and investments at December 31, 2014 increased to $106.9
million from $63.3 million at December 31, 2013. This $43.6 million
increase was driven primarily by milestone revenue associated with
Monovisc approval in the U.S. and increased operating income.
Conference Call Information
Anika will hold a conference call to discuss its financial results,
business highlights and financial outlook tomorrow, Thursday, February
26 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
To listen to the conference call, dial 855-468-0611 (international
callers dial 484-756-4332). In addition, the call will be available
through a live audio webcast in the "Investor Relations" section of
Anika's website, www.anikatherapeutics.com. An accompanying