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Business Wire 24-Oct-2018 4:05 PM
CINGAL Drives Strong International Viscosupplement Revenue Growth
Achieves Solid Bottom Line Performance with $0.53 Diluted EPS
Anika Therapeutics, Inc. (NASDAQ:ANIK), a global, integrated orthopedic and regenerative medicines company specializing in therapeutics based on its proprietary hyaluronic acid ("HA") technology, today reported financial results for the third quarter ended September 30, 2018, and provided an update on its business progress in the period.
"Anika delivered solid financial results in the third quarter, while continuing to take important steps to accelerate revenue growth in 2019 and beyond," said Joseph Darling, President and Chief Executive Officer of Anika Therapeutics. "We are encouraged by the continued advances we are making across our deep pipeline and diverse commercial portfolio. During the quarter, CINGAL end user demand in Canada and Europe remained strong, and we were pleased to add four new distribution partners to further expand our commercial reach in Europe, Asia and South America. Focused international expansion efforts enabled us to realize a 31% year-over-year increase in international Viscosupplement revenue while we continued to generate strong earnings and cash flow. As we prepare to discuss the pathway for U.S. regulatory approval for CINGAL with the U.S. Food and Drug Administration in the first quarter of 2019, we believe Anika is well-positioned to transform into a global commercial company increasingly capable of generating significant value for our patients and shareholders."
Third Quarter Financial Results
Recent Business Highlights
Full Year 2018 Revised Corporate OutlookBased on currently available information, the Company anticipates full year product revenue to be approximately 3% below prior year. The Company continues to expect that it will resume the shipment of products that were the subject of the previously-disclosed voluntary recall by the end of this year. Total operating expenses are now expected to be reduced to the high $80 million range for the full year of 2018 as a result of successful cost control initiatives.
Conference Call InformationAnika's management will hold a conference call and webcast to discuss its financial results and business highlights today, Wednesday, October 24 at 5:00 pm ET. The conference call can be accessed by dialing 1-855-468-0611 (toll-free domestic) or 1-484-756-4332 (international). A live audio webcast will be available in the "Investor Relations" section of Anika's website, www.anikatherapeutics.com. An accompanying slide presentation may also be accessed via the Anika website. A replay of the webcast will be available on Anika's website approximately two hours after the completion of the event.
About Anika Therapeutics, Inc.Anika Therapeutics, Inc. (NASDAQ:ANIK) is a global, integrated orthopedic and regenerative medicines company based in Bedford, Massachusetts. Anika is committed to improving the lives of patients with degenerative orthopedic diseases and traumatic conditions with clinically meaningful therapies along the continuum of care, from palliative pain management to regenerative tissue repair. The Company has over two decades of global expertise developing, manufacturing, and commercializing more than 20 products based on its proprietary hyaluronic acid (HA) technology. Anika's orthopedic medicine portfolio includes ORTHOVISC®, MONOVISC®, and CINGAL®, which alleviate pain and restore joint function by replenishing depleted HA, and HYALOFAST, a solid HA-based scaffold to aid cartilage repair and regeneration. For more information about Anika, please visit www.anikatherapeutics.com.
Forward-Looking StatementsThe statements made in the last sentence of the second paragraph of this press release and in the Section captioned "Full Year 2018 Corporate Outlook," which are not statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, those relating to the Company's expected meeting with the U.S. Food and Drug Administration during the first quarter of 2019, the Company's full-year 2018 product revenue and operating expense projections, and the Company's expectations related to shipment of products previously subject to the voluntary recall. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks, uncertainties, and other factors. The Company's actual results could differ materially from any anticipated future results, performance, or achievements described in the forward-looking statements as a result of a number of factors including, but not limited to, (i) the Company's ability to successfully commence and/or complete clinical trials of its products on a timely basis or at all; (ii) the Company's ability to obtain pre-clinical or clinical data to support domestic and international pre-market approval applications, 510(k) applications, or new drug applications, or to timely file and receive FDA or other regulatory approvals or clearances of its products; (iii) that such approvals will not be obtained in a timely manner or without the need for additional clinical trials, other testing or regulatory submissions, as applicable; (iv) the Company's research and product development efforts and their relative success, including whether we have any meaningful sales of any new products resulting from such efforts; (v) the cost effectiveness and efficiency of the Company's clinical studies, manufacturing operations, and production planning; (vi) the strength of the economies in which the Company operates or will be operating, as well as the political stability of any of those geographic areas; (vii) future determinations by the Company to allocate resources to products and in directions not presently contemplated; (viii) the Company's ability to successfully commercialize its products, in the U.S. and abroad; (ix) the Company's ability to provide an adequate and timely supply of its products to its customers; and (x) the Company's ability to achieve its growth targets. Additional factors and risks are described in the Company's periodic reports filed with the Securities and Exchange Commission, and they are available on the SEC's website at www.sec.gov. Forward-looking statements are made based on information available to the Company on the date of this press release, and the Company assumes no obligation to update the information contained in this press release.
Anika Therapeutics, Inc. and SubsidiariesConsolidated Statements of Operations(in thousands, except per share data)(unaudited) | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Product revenue | $ | 26,781 | $ | 27,178 | $ | 78,581 | $ | 78,899 | ||||||||
Licensing, milestone and contract revenue | 6 | 6 | 18 | 5,133 | ||||||||||||
Total revenue | 26,787 | 27,184 | 78,599 | 84,032 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of product revenue | 8,282 | 6,250 | 24,279 | 18,648 | ||||||||||||
Research and development | 4,232 | 5,842 | 14,126 | 14,521 | ||||||||||||
Selling, general and administrative | 5,700 | 4,823 | 28,207 | 14,862 | ||||||||||||
Total operating expenses | 18,214 | 16,915 | 66,612 | 48,031 | ||||||||||||
Income from operations | 8,573 | 10,269 | 11,987 | 36,001 | ||||||||||||
Interest and other income, net | 522 | 261 | 907 | 335 | ||||||||||||
Income before income taxes | 9,095 | 10,530 | 12,894 | 36,336 | ||||||||||||
Provision for income taxes | 1,496 | 3,643 | 1,890 | 12,587 | ||||||||||||
Net income | $ | 7,599 | $ | 6,887 | $ | 11,004 | $ | 23,749 | ||||||||
Basic net income per share: | ||||||||||||||||
Net income | $ | 0.53 | $ | 0.47 | $ | 0.76 | $ | 1.63 | ||||||||
Basic weighted average common shares outstanding | 14,237 | 14,579 | 14,524 | 14,572 | ||||||||||||
Diluted net income per share: | ||||||||||||||||
Net income | $ | 0.53 | $ | 0.46 | $ | 0.74 | $ | 1.58 | ||||||||
Diluted weighted average common shares outstanding | 14,377 | 15,115 | 14,820 | 15,065 | ||||||||||||
Anika Therapeutics, Inc. and SubsidiariesConsolidated Balance Sheets(in thousands, except per share data)(unaudited) | ||||||||||
ASSETS | September 30,2018 | December 31,2017 | ||||||||
Current assets: | ||||||||||
Cash, cash equivalents and investments | $ | 149,011 | $ | 157,256 | ||||||
Accounts receivable, net | 20,771 | 23,825 | ||||||||
Inventories, net | 23,828 | 22,035 | ||||||||
Prepaid expenses and other current assets | 1,981 | 3,211 | ||||||||
Total current assets | 195,591 | 206,327 | ||||||||
Property and equipment, net | 55,041 | 56,183 | ||||||||
Other long-term assets |
1,109 | 1,254 | ||||||||
Intangible assets, net | 9,564 | 10,635 | ||||||||
Goodwill | 7,959 | 8,218 | ||||||||
Total assets | $ | 269,264 | $ | 282,617 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 2,462 | $ | 6,747 | ||||||
Accrued expenses and other current liabilities | 6,843 | 6,326 | ||||||||
Total current liabilities | 9,305 | 13,073 | ||||||||
Other long-term liabilities | 574 | 660 | ||||||||
Deferred tax liability | 4,120 | 5,393 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity: | ||||||||||
Preferred stock, $0.01 par value | - | - | ||||||||
Common stock, $0.01 par value | 142 | 147 | ||||||||
Additional paid-in-capital | 49,836 | 68,617 | ||||||||
Accumulated other comprehensive loss | (5,228 | ) | (4,784 | ) | ||||||
Retained earnings | 210,515 | 199,511 | ||||||||
Total stockholders' equity | 255,265 | 263,491 | ||||||||
Total liabilities and stockholders' equity | $ | 269,264 | $ | 282,617 | ||||||
Anika Therapeutics, Inc. and SubsidiariesSupplemental Financial Data | ||||||||||||||||||||||||||||||||||||
Revenue by Product Line and Product Gross Margin(in thousands, except percentages)(unaudited) |
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For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Product Line: | 2018 | % | 2017 | % | 2018 | % | 2017 | % | ||||||||||||||||||||||||||||
Orthobiologics | $ | 24,097 | 90 | % | $ | 23,990 | 88 | % | $ | 69,778 | 88 | % | $ | 68,686 | 87 | % | ||||||||||||||||||||
Surgical | 1,191 | 4 | % | 1,765 | 7 | % | 3,700 | 5 | % | 4,395 | 6 | % | ||||||||||||||||||||||||
Dermal | 80 | 1 | % | 358 | 1 | % | 163 | 1 | % | 1,235 | 2 | % | ||||||||||||||||||||||||
Other | 1,413 | 5 | % | 1,065 | 4 | % | 4,940 | 6 | % | 4,583 | 5 | % | ||||||||||||||||||||||||
Product Revenue | $ | 26,781 | 100 | % | $ | 27,178 | 100 | % | $ | 78,581 | 100 | % | $ | 78,899 | 100 | % | ||||||||||||||||||||
Product Gross Profit | $ | 18,499 | $ | 20,928 | $ | 54,302 | $ | 60,251 | ||||||||||||||||||||||||||||
Product Gross Margin | 69% | 77% | 69% | 76% | ||||||||||||||||||||||||||||||||
Product Revenue by Geographic Region(in thousands, except percentages)(unaudited) |
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For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2018 | % | 2017 | % | 2018 | % | 2017 | % | |||||||||||||||||||||||||||||
Geographic Region: | ||||||||||||||||||||||||||||||||||||
United States | $ | 21,695 | 81 | % | $ | 22,227 | 82 | % | $ | 63,377 | 81 | % | $ | 63,507 | 81 | % | ||||||||||||||||||||
Europe | 3,132 | 12 | % | 2,832 | 10 | % | 9,021 | 11 | % | 9,743 | 12 | % | ||||||||||||||||||||||||
Other | 1,954 | 7 | % | 2,119 | 8 | % | 6,183 | 8 | % | 5,649 | 7 | % | ||||||||||||||||||||||||
Product Revenue | $ | 26,781 | 100 | % | $ | 27,178 | 100 | % | $ | 78,581 | 100 | % | $ | 78,899 | 100 | % | ||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181024005631/en/