Full Press Release Details
Charles H. Sherwood, Ph.D., CEO
Kevin W. Quinlan, CFO
Anika Therapeutics, Inc.
ANIKA THERAPEUTICS REPORTS FOURTH-QUARTER AND FULL-YEAR 2006
PRODUCT REVENUE INCREASES 17% FOR THE YEAR
WOBURN, Mass., February 28, 2007 -- Anika Therapeutics, Inc. (Nasdaq: ANIK)
today reported financial results for the fourth quarter and year ended December
Anika reported product revenue of $5,078,000 for the fourth quarter of 2006,
compared with $4,774,000 in the same period last year. For the year ended
December 31, 2006, product revenue increased 17% to $23,953,000, compared with
$20,534,000 in 2005.
Product revenue for the fourth quarter of 2006 increased 6.4% compared with the
fourth quarter of 2005 due primarily to increased contributions from domestic
ORTHOVISC(R) sales. The increase in domestic sales of ORTHOVISC was partially
offset by reduced international sales due to a change in the Turkish
government's reimbursement policy for more than 100 drugs, including ORTHOVISC
and its competing products.
During the fourth quarter and year ended December 31, 2006, the company reported
licensing, milestone and contract revenue of $811,000 and $2,887,000,
respectively. For the fourth quarter and year ended December 31, 2005,
licensing, milestone and contract revenue was $692,000 and $9,301,000,
respectively. The 2005 amount includes $6,537,000 of contract payments received
in connection with a former development and commercialization contract for the
company's hyaluronic acid-based cosmetic tissue augmentation (CTA) product.
Total revenue for the fourth quarter of 2006 was $5,889,000, compared with
$5,466,000 in the fourth quarter of 2005. For the year ended December 31, 2006,
total revenue was $26,841,000, compared with $29,835,000 in 2005.
PRODUCT GROSS MARGINS
Product gross margin for the fourth quarter of 2006 decreased to 40% from 53% in
last year's fourth quarter. Product gross margin for full year 2006 was 54%
versus 46% for 2005. The improvement on a full-year basis was due to increased
ORTHOVISC royalties and favorable material prices.
Net income for the fourth quarter of 2006 was $1,047,000, or $0.09 per diluted
share, compared with $822,000, or $0.07 per diluted share, for the same period
last year. Net income for the year ended December 31, 2006 was $4,604,000, or
$0.41 per diluted share, compared with $5,893,000, or $0.52 per diluted share,
in 2005. The impact from the adoption of SFAS 123R in 2006 reduced 12-month
earnings per share by $0.07. Please refer to the schedule at the end of this
news release for a reconciliation of Non-GAAP diluted net income per share.
RESEARCH & DEVELOPMENT AND SELLING, GENERAL & ADMINISTRATIVE EXPENSES
R&D and S,G&A operating expenses were $1,964,000 for the fourth quarter of 2006,
compared with $2,342,000 for the fourth quarter of 2005. For 2006, R&D and S,G&A
operating expenses were $10,295,000 compared with $10,140,000 in 2005. The
increase in R&D and S,G&A operating expenses for 2006 was primarily due to the
impact of stock-based compensation expense, which totaled $1,267,000 for the
year, partially offset by lower clinical trial expenses.
Anika's cash and cash equivalents increased to $47,167,000 at December 31, 2006
from $44,747,000 at December 31, 2005 as a result of positive cash flow from
operations including a 69% increase in interest income. The company has no
short- or long-term debt.
MANAGEMENT COMMENTARY AND OUTLOOK
"Our 2006 financial performance was highlighted by a 103% increase in end-user
unit sales of ORTHOVISC," said Charles H. Sherwood, Ph.D., Anika's president and
chief executive officer. "This was offset by a slight decline in full-year
international sales due to a change in the reimbursement policy in Turkey in the
third quarter. As a result, worldwide ORTHOVISC sales increased 43% over 2005.
During the fourth quarter, we received a unique reimbursement code for ORTHOVISC
that will simplify the Medicare/Medicaid reimbursement process in the physician
office setting. A new clinical study to evaluate the safety and efficacy of
ORTHOVISC to treat pain caused by osteoarthritis of the shoulder was also
initiated in December."
"Our fourth-quarter achievements also included significant progress in the
advancement of our CTA product," added Sherwood. "We received FDA approval for
the initial CTA product and we have filed the necessary amendments with U.S. and
European regulators on an enhanced version, which will be named 'ELEVESS(TM).'"
"Looking forward, we have several key milestones for both our osteoarthritis
franchise and our ELEVESS product family," stated Sherwood. "During the year, we
plan to seek CE Mark approval and then launch a new, single injection, non
animal osteoarthritis product in the European Union. We also expect to begin a
pivotal clinical trial for the product in order to gather data working toward a
U.S. approval. With a unique reimbursement code for ORTHOVISC, we anticipate
U.S. product sales of ORTHOVISC to grow significantly in 2007."
"With our marketing and distribution partner, Galderma Pharma, we expect to
receive FDA and CE Mark approval for ELEVESS and launch ELEVESS products
worldwide in 2007. Our accomplishments in 2006, and the achievement of our
milestones in 2007 set the stage for a stronger company with a broader product
portfolio and increased opportunities for growth," concluded Sherwood.
CONFERENCE CALL INFORMATION
The company will hold a conference call to review its financial results and
business highlights on Thursday, March 1, 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 866-770-7120 (International callers use 617-213-8065) and
use the passcode 13618636. Please call approximately 10 minutes before the
starting time and reference Anika Therapeutics. In addition, the conference call
will be available to interested parties through a live audio Internet broadcast
at www.anikatherapeutics.com. The call will be archived and accessible on the
same website shortly after the conclusion of the call.
ABOUT ANIKA THERAPEUTICS, INC.
Headquartered in Woburn, Mass., Anika Therapeutics, Inc.
(www.anikatherapeutics.com) develops, manufactures and commercializes
therapeutic products for tissue protection, healing and repair. These products
are based on hyaluronic acid (HA), a naturally occurring, biocompatible polymer
found throughout the body. Anika products include ORTHOVISC(R), a treatment for
osteoarthritis of the knee available internationally and marketed in the U.S. by
DePuy Mitek and Hyvisc(R), a treatment for equine osteoarthritis marketed in the
U.S. by Boehringer Ingelheim Vetmedica, Inc. Anika develops and manufactures
Amvisc(R)and Amvisc Plus(R), HA viscoelastic products for ophthalmic surgery. It