Full Press Release Details
Anika Therapeutics Reports Second-Quarter Fiscal 2007 Financial Results
ORTHOVISC Domestic Revenue Increases 66%;
Product Revenue Increases 18% Sequentially
WOBURN, Mass.--(BUSINESS WIRE)--July 24, 2007--Anika Therapeutics,
Inc. (Nasdaq: ANIK) today reported financial results for the second
quarter ended June 30, 2007.
Anika reported product revenue of $6,332,000 for the second
quarter of 2007 compared with $7,115,000 in the year ago period.
Product revenue for the first six months of 2007 was $11,706,000
compared with $13,381,000 in the first six months of 2006. The decline
in product revenue was due to the change in the Turkish government's
reimbursement policy previously announced in October 2006. This
resulted in a loss of ORTHOVISC(R) sales during the second half of
2006, and through May of 2007. ORTHOVISC sales in Turkey were $2.4
million and $3.8 million for the second quarter and first half of
U.S. ORTHOVISC revenue increased 66% in the quarter, compared with
last year's second quarter, fueled primarily by the unique
reimbursement code assigned to ORTHOVISC in January and an increased
number of Mitek sales specialists. Three- and six-month international
sales of ORTHOVISC were lower in 2007 versus the same periods in 2006
primarily due to the impact of Turkish sales.
Revenue in the ophthalmic business increased 14% in the second
quarter of 2007 compared with the second quarter of 2006. Anika also
reported strong HYVISC(R) revenue, which increased 215% year over year
to $701,000 in the second quarter.
During the three and six months ending June 30, 2007, licensing,
milestone and contract revenue was $768,000 and $1,532,000,
respectively, compared with $683,000 and $1,370,000 in the prior year
Total revenue for the second quarter of 2007 was $7,100,000
compared with $7,798,000 in the second quarter of 2006. Total revenue
for the first six months of 2007 was $13,238,000 compared with
$14,751,000 in the first six months of 2006.
Product Gross Margin
Product gross margin for the second quarter of 2007 was 52%
compared with 59% in the second quarter of 2006. For the first six
months of 2007, product gross margin was 53% compared with 56% for the
six month period in 2006. The decline in product gross margin for both
periods is due primarily to product mix and timing of orders in both
years. The company currently expects product gross margin to be higher
in the second half of 2007, and for the full year 2007 gross margin to
be comparable to full year 2006.
Total operating expenses, excluding cost of product revenue, were
$2,712,000 for the second quarter of 2007 compared with $3,106,000 for
the second quarter of 2006. Total operating expenses, excluding cost
of product revenue, for the first six months of 2007 were $5,135,000
compared with $5,972,000 for the first six months of 2006. Operating
expenses for both 2007 periods were lower than their respective 2006
periods due to higher clinical trial costs incurred in 2006 related to
an ELEVESS European study, as well as legal costs incurred to complete
the distribution agreement signed with Galderma in mid-2006.
Net income for the second quarter of 2007 was $1,365,000, or $0.12
per diluted share, compared with $1,352,000, or $0.12 per diluted
share, for the same period last year. Net income for the six month
period of 2007 was $2,566,000, or $0.23 per share, compared with
$2,233,000, or $0.20 per diluted share, for the first six months of
2006. The modest improvement in net income resulted despite lower
revenue and gross margins in both the second quarter and six month
periods due to lower operating expenses, higher interest income, and a
lower effective tax rate. The lower tax rate reflects higher state
investment tax credits as a result of the Anika's ongoing investment
Anika's cash, cash equivalents and short-term investments at June
30, 2007 were $48,267,000 compared with $47,167,000 at December 31,
Second-Quarter Highlights and Outlook
"The U.S. and European approval of our new cosmetic dermatology
product, ELEVESS(TM), a 66% second quarter increase in U.S. ORTHOVISC
revenues, rebound in ophthalmic revenue, and strong veterinary sales
punctuated a successful second quarter," said Charles H. Sherwood,
Ph.D., Anika's president and chief executive officer. "This
contributed to second-quarter 2007 product revenue increasing 18% over
the sequential first quarter."
"ORTHOVISC unit sales in the U.S. more than doubled during the
second quarter and first half of 2007, continuing the positive trend
we saw last quarter and all of last year," added Sherwood. "We are
encouraged by the response physicians are having to ORTHOVISC after
the receipt of the product's new reimbursement code in January and the
addition of Mitek sales specialists. Internationally, the resumption
of modest shipments to Turkey should make future quarterly comparisons
of ORTHOVISC sales favorable as we work to rebuild our sales outside
"Our plans for the ORTHOVISC franchise in the second half of 2007
include targeting increased sales, both domestically and
internationally, by expanding our product portfolio and seeking new
international distribution partners," said Sherwood. "We also are
focused on receiving approval to market our first single-injection
osteoarthritis product in Europe by the end of the year."
"Receiving FDA approval of ELEVESS is truly a milestone
achievement in our commercialization efforts with Galderma Pharma,"
added Sherwood. "We are now positioned to benefit from the rapid
growth in the global market for cosmetic fillers and we expect
Galderma to launch ELEVESS worldwide in the second half of this year."
Conference Call Information
The company will hold a conference call to review its financial
results and business highlights on Wednesday, July 25, 2007, at 9:00
a.m. ET. In addition, the company may address during the conference
call its business and financial developments and trends, including
those involving product lines and business partners, and other
business and financial matters affecting the company, which may
contain information that has not been previously disclosed. To listen
to the conference call, dial 800-901-5259 (International callers use
617-786-4514) and use the passcode 56481863. Please call approximately
10 minutes before the starting time and reference Anika Therapeutics.