Anika Therapeutics, Inc. (Anika Therapeutics), a US-based therapeutic products company, has reported total revenues of $35.7 million for the year 2008, compared with the total revenues of $30.8 million in the previous year end. It has also reported a net income of $3.6 million, or $0.32 per diluted share, for the year 2008, compared with the net income of $6 million, or $0.53 per diluted share, in the previous year end.
Anika reported product revenue of $8,285,000 for the fourth quarter of 2008, compared with $7,916,000 in the previous year end. For the year ended December 31, 2008, product revenue increased to $33,055,000, compared with $26,905,000 for full year 2007. The increase in product revenue for the quarter and the year was due to sales of ORTHOVISC in the US as well as sales of MONOVISC in Europe.
The company’s total revenue for the fourth quarter of 2008 was $8,966,000, compared with $9,627,000 in the fourth quarter of 2007. Revenue for the fourth quarter of 2007 included $1.2 million in revenue related to the company’s termination settlement with Galderma.
Product Gross Margin
Product gross margin for the fourth quarter of 2008 increased to 66% from 59% in last year’s fourth quarter. Product gross margin for the year ended December 31, 2008 was 60% versus 56% for full year 2007. The quarter and full year improvements in gross margins were due primarily to unit growth and strong worldwide ORTHOVISC revenue, as well as the impact of sales from new products.
Other Operating Expenses
Research and development expense for the fourth quarter of 2008 increased to $2,445,000 compared with $1,395,000 for the same period last year. Research and development expense for the year ended December 31, 2008 increased to $7,399,000 compared with $4,365,000 for full year 2007. The quarter and full-year increases were due to clinical trials in the US and Europe for MONOVISC, manufacturing scale-up activities for ELEVESS and MONOVISC, and development activities in joint health products.
Selling, general and administrative expense for the fourth quarter of 2008 declined to $2,450,000 from $2,885,000 for the same period last year, due to high legal, recruiting and consulting expenses in the fourth quarter of 2007. Selling, general and administrative expense for the year ended December 31, 2008 increased to $10,965,000 from $7,997,000 for full year 2007. The increase was due to the following three factors: 1) increased personnel costs and marketing expenses in connection with the Company’s joint health franchise; 2) higher costs at Anika’s Bedford facility due to a full year of occupancy and lease payments in 2008 versus only a partial year of payments and occupancy for 2007; and 3) higher year-over-year professional costs related to strategic and other corporate projects.
Anika’s net income for the fourth quarter of 2008 was $1,095,000, or $0.10 per diluted share, compared with $1,673,000, or $0.15 per diluted share, for the year ago period. Net income for the year ended December 31, 2008 was $3,629,000, or $0.32 per diluted share, compared with $6,035,000, or $0.53 per diluted share, in 2007. The decrease in net income in both the fourth quarter and full year periods was due to higher operating expenses, as well as lower interest income.
Anika’s cash, cash equivalents and short-term investments at December 31, 2008 were $43,194,000 compared with $39,405,000 at December 31, 2007. The increase was a result of the final drawdown in the fourth quarter of 2008 under the Company’s line-of-credit, partly offset by lower accounts payable.
“Anika made excellent financial and operational progress in 2008,” said Charles H. Sherwood, Anika’s president and chief executive officer. “We completed our sixth-consecutive profitable year, grew product revenue by 23%, and delivered record ORTHOVISC product revenue. During the year, we introduced two new products to the European market, including MONOVISC, our single-injection osteoarthritis product, and ORTHOVISC mini, our hyaluronic acid-based osteoarthritis treatment specifically targeted to treat smaller joints. We also completed enrollment of our U.S. pivotal clinical trial for MONOVISC and received positive six-month data from our ongoing trial in Europe. One of the key achievements of the year was the progress we made on our new manufacturing facility, which will provide us with much-needed capacity as we capitalize on expected demand for our new products.”
“We concluded a successful 2008 with another quarter of strong operating performance,” said Sherwood. “We achieved record US sales in the fourth quarter for our ORTHOVISC product line and achieved our highest-ever annual product gross margin at 60% for the year. We also expanded the geographic reach of our joint-health franchise with distributors in Europe, the Middle East and Southeast Asia.”
“We are excited about our prospects in 2009 and beyond,” said Sherwood. “We are continuing to gain market share for our joint health products and expect this trend to continue both domestically and abroad. In addition to continuing to grow sales of ORTHOVISC, we also plan to increase the market penetration of MONOVISC and ORTHOVISC mini in Europe, and file for marketing approval for MONOVISC in the US. Another pipeline milestone we expect to achieve this year is submitting a CE Mark application for CINGAL, our new single injection joint health product with an active therapeutic molecule for pain relief. We also are optimistic about the long-term prospects for ELEVESS, our HA-based soft-tissue filler for facial wrinkles and scar remediation, and plan to expand distribution for this product over the balance of this year. Finally, by the end of 2009 we expect to begin manufacturing at our new state-of-the-art facility. We look forward to 2009 with confidence in our product portfolio and expect good revenue growth and improved profitability.”