BEDFORD, Mass.--(BUSINESS WIRE)--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 first quarter ended March 31, 2019, and provided an update on its business progress in the period.
“Anika is off to a strong start in 2019, with double-digit revenue growth year-over-year in all product franchises and solid earnings in the first quarter,” said Joseph Darling, President and Chief Executive Officer of Anika Therapeutics. “We have made continued progress transforming Anika into a global commercial company positioned to deliver a continuum of orthopedic and regenerative medicine therapies. We strengthened our executive leadership team with the appointment of a Vice President of Research and Development and a Vice President of U.S. Sales, expanded our international commercial team and remain on track to launch our first surgically-delivered therapy for bone repair procedures in the U.S. under our hybrid commercial model in the second half of 2019. Additionally, we are pleased to return capital to shareholders through our $50 million share repurchase program.”
First Quarter Financial Results
- Total revenue for the first quarter of 2019 increased 16% year-over-year to $24.7 million, compared to $21.3 million for the first quarter of 2018. The increase was due primarily to higher global revenue from the Company’s Viscosupplement franchise and HYAFF-based products.
- U.S. and international Viscosupplement revenue each increased by 11% in the quarter as compared to 2018. The increase in U.S. Viscosupplement revenue was due primarily to the timing and volume of orders placed in the quarter, while the increase in International Viscosupplement revenue was driven principally by an 18% year-over-year increase in international revenue from single injection products.
- Total operating expenses for the first quarter of 2019 were $19.2 million, compared to $29.1 million for the first quarter of 2018. The decrease in total operating expenses was due primarily to a one-time charge of $8.4 million in the first quarter of 2018, which consisted mainly of non-cash stock-based compensation expense associated with the retirement of Anika’s former Chief Executive Officer.
- Net income for the first quarter of 2019 was $4.5 million, or $0.31 per diluted share, compared to a net loss of $6.7 million, or ($0.46) per diluted share, for the first quarter of 2018. The increase in net income was due primarily to the increase in total revenue and decrease in operating expenses previously discussed.
- Adjusted EBITDA (see description below) for the first quarter of 2019 was $8.3 million, compared to $1.2 million for the first quarter of 2018. The improvement resulted from the same factors as previously set forth for the increase in net income.
- Cash, cash equivalents and investments were $166.7 million as of March 31, 2019, compared to $159.0 million as of December 31, 2018. Cash provided by operating activities was $8.5 million for the first quarter of 2019.
Recent Business Highlights
- Strengthened the executive leadership team with the appointments of Robert Richard, Ph.D., as Vice President of Research and Development, and Stephen Goldy, as Vice President of U.S. Sales.
- Executed commercial expansion plans, including the enhancement of international business development and marketing capabilities and the acceleration of planning activities associated with the launch of its first surgically-delivered regenerative therapy for bone repair procedures in the U.S. utilizing the Company’s hybrid commercial model in the second half of 2019.
- Announced a $50 million share repurchase program, which will include a $30 million accelerated share repurchase program and up to an additional $20 million of common stock purchased on the open market.
- Continued to evaluate the clinical and regulatory path forward for CINGAL U.S. Food and Drug Administration approval, and refreshing primary market research ahead of Anika’s final decision on go forward path. The Company will provide an update on its complete assessment by the time it reports financial results for the second quarter of 2019.
- On schedule to complete a 5-year strategic plan in the third quarter of 2019, which Anika intends to unveil at its 2019 Analyst and Investor Day this fall.
Non-GAAP Information
To supplement the financial measures
prepared in accordance with U.S. generally accepted accounting
principles (GAAP), the Company is reporting Adjusted EBITDA, which is a
non-GAAP financial measure and should not be considered an alternative
to net income or other measurements under GAAP. The Company believes
that Adjusted EBITDA provides additional useful information to investors
as it is a metric routinely used by the Company to evaluate its
operating performance and to establish goals for managing its business.
Adjusted EBITDA is not calculated identically by all companies, and
therefore the Company’s measurements of Adjusted EBITDA may not be
comparable to similarly titled measures reported by other companies.
Adjusted EBITDA is defined by the Company as GAAP net income excluding
depreciation and amortization, interest and other income (expense),
income taxes and stock-based compensation expense. A reconciliation of
Adjusted EBITDA to net income, the most directly comparable financial
measure calculated and presented in accordance with GAAP, is shown in
the table below for the three months ended March 31, 2019 and 2018 (in
thousands).
| For the Three Months Ended March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Net income | $ | 4,507 | $ | (6,686 | ) | |||||
| Interest and other income, net | (498 | ) | (95 | ) | ||||||
| Provision for income taxes | 1,473 | (1,051 | ) | |||||||
| Depreciation and amortization | 1,477 | 1,473 | ||||||||
| Stock-based compensation | 1,386 | 7,565 | ||||||||
| Adjusted EBITDA | $ | 8,345 | $ | 1,206 | ||||||
Conference Call Information
Anika’s management will hold a
conference call and webcast to discuss its financial results and
business highlights today, Thursday, May 2 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 Statements
The statements made in the
third and fourth sentences of the second paragraph and the second,
third, fourth, and fifth bullet points in the section captioned “Recent
Business Highlights” of this press release, 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 plans
for the launch of its surgically-delivered therapy for bone repair, the
timing and mechanism of the Company’s share repurchase program, the
status and plans related to the Company’s assessment of the regulatory
pathway and market analysis for CINGAL, and the status and completion of
the Company’s 5-year strategic plan. 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) quarterly sales volume variation
experienced by the Company, which can make future results difficult to
predict and period-to-period comparisons potentially less meaningful;
(x) the Company’s ability to provide an adequate and timely supply of
its products to its customers; and (xi) 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 Subsidiaries Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
|||||||||
| For the Three Months Ended March 31, | |||||||||
| 2019 | 2018 | ||||||||
| Product revenue | $ | 24,717 | $ | 21,258 | |||||
| Licensing, milestone and contract revenue | 6 | 6 | |||||||
| Total revenue | 24,723 | 21,264 | |||||||
| Operating expenses: | |||||||||
| Cost of product revenue | 7,311 | 7,845 | |||||||
| Research and development | 4,258 | 5,161 | |||||||
| Selling, general and administrative | 7,672 | 16,090 | |||||||
| Total operating expenses | 19,241 | 29,096 | |||||||
| Income (loss) from operations | 5,482 | (7,832 | ) | ||||||
| Interest and other income, net | 498 | 95 | |||||||
| Income (loss) before income taxes | 5,980 | (7,737 | ) | ||||||
| Provision for (benefit from) income taxes | 1,473 | (1,051 | ) | ||||||
| Net income (loss) | $ | 4,507 | $ | (6,686 | ) | ||||
| Basic net income (loss) per share: | |||||||||
| Net income (loss) | $ | 0.32 | $ | (0.46 | ) | ||||
| Basic weighted average common shares outstanding | 14,185 | 14,679 | |||||||
| Diluted net income (loss) per share: | |||||||||
| Net income (loss) | $ | 0.31 | $ | (0.46 | ) | ||||
| Diluted weighted average common shares outstanding | 14,314 | 14,679 | |||||||
|
Anika Therapeutics, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except per share data) (unaudited) |
||||||||||
| ASSETS |
March 31, |
December 31, |
||||||||
| Current assets: | ||||||||||
| Cash, cash equivalents and investments | $ | 166,736 | $ | 159,014 | ||||||
| Accounts receivable, net | 18,265 | 20,775 | ||||||||
| Inventories, net | 22,617 | 21,300 | ||||||||
| Prepaid expenses and other current assets | 2,077 | 1,854 | ||||||||
| Total current assets | 209,695 | 202,943 | ||||||||
| Property and equipment, net | 53,051 | 54,111 | ||||||||
| Right-of-use assets | 23,748 | - | ||||||||
| Other long-term assets | 4,003 | 4,897 | ||||||||
| Intangible assets, net | 8,467 | 9,191 | ||||||||
| Goodwill | 7,695 | 7,851 | ||||||||
| Total assets | $ | 306,659 | $ | 278,993 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 3,571 | $ | 3,143 | ||||||
| Accrued expenses and other current liabilities | 8,031 | 8,146 | ||||||||
| Total current liabilities | 11,602 | 11,289 | ||||||||
| Other long-term liabilities | 366 | 550 | ||||||||
| Deferred tax liability | 3,388 | 3,542 | ||||||||
| Lease liabilities | 22,232 | - | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders’ equity: | ||||||||||
| Preferred stock, $0.01 par value | - | - | ||||||||
| Common stock, $0.01 par value | 142 | 142 | ||||||||
| Additional paid-in-capital | 52,030 | 50,763 | ||||||||
| Accumulated other comprehensive loss | (5,841 | ) | (5,526 | ) | ||||||
| Retained earnings | 222,740 | 218,233 | ||||||||
| Total stockholders’ equity | 269,071 | 263,612 | ||||||||
| Total liabilities and stockholders’ equity | $ | 306,659 | $ | 278,993 | ||||||
|
Anika Therapeutics, Inc. and Subsidiaries Supplemental Financial Data |
||||||||||||||
|
Revenue by Product Line and Product Gross Margin (in thousands, except percentages) (unaudited) |
||||||||||||||
| For the Three Months Ended March 31, | ||||||||||||||
| Product Line: |
2019 |
% |
2018 |
% |
||||||||||
| Orthobiologics | $ | 21,748 | 88% | $ | 19,489 | 92% | ||||||||
| Surgical | 1,392 | 5% | 1,245 | 6% | ||||||||||
| Dermal | 129 | 1% | (539) | -3% | ||||||||||
| Other | 1,448 | 6% | 1,063 | 5% | ||||||||||
| Product Revenue | $ | 24,717 | 100% | $ | 21,258 | 100% | ||||||||
| Product Gross Profit | $ | 17,406 | $ | 13,413 | ||||||||||
| Product Gross Margin | 70% | 63% | ||||||||||||
|
Product Revenue by Geographic Region (in thousands, except percentages) (unaudited) |
||||||||||||||
| For the Three Months Ended March 31, | ||||||||||||||
| Geographic Region: |
2019 |
% |
2018 |
% |
||||||||||
| United States | $ | 20,089 | 81% | $ | 16,910 | 79% | ||||||||
| Europe | 2,526 | 10% | 2,391 | 11% | ||||||||||
| Other | 2,102 | 9% | 1,957 | 10% | ||||||||||
| Product Revenue | $ | 24,717 | 100% | $ | 21,258 | 100% | ||||||||
