Anika Therapeutics, Inc. (NASDAQ: ANIK), a global joint
preservation company in early intervention orthopedics, today
reported financial results for its third quarter ended September
30, 2023.
Third Quarter 2023 Financial Summary
- Revenue in the third quarter of 2023 was $41.5 million, up 3%
compared to $40.3 million in the third quarter of 2022.
- OA Pain Management1 revenue of $24.9 million, up 2%
- Joint Preservation and Restoration revenue of $13.5 million, up
14%
- Non-Orthopedic1 revenue of $3.1 million, down 22%
- Gross margin was 60%, including $1.6 million of non-cash
acquisition-related intangible asset amortization and $0.7 million
of product rationalization charges; Adjusted gross margin2 was
66%.
- Net loss was ($6.6) million, or ($0.45) per share, which
includes a $4.2 million, or $0.29 per share, net of tax charge for
the discontinuation of a software development project, compared to
net loss of ($4.2) million, or ($0.29) per share, in the prior year
period. Adjusted net income2 was breakeven, or $0.00 per diluted
share, compared to adjusted net loss2 of ($0.7) million, or ($0.05)
per share, in the third quarter of 2022.
- Adjusted EBITDA2 was $4.7 million, compared to $4.1 million in
the third quarter of 2022.
- Cash from operations was $6.5 million; ending cash balance was
$70.7 million.
1 Revenue from veterinary products historically reported in OA
Pain Management is now reported in the Non-Orthopedic product
family to provide investors a more accurate representation of the
performance of Anika’s business.2 See description of non-GAAP
financial information contained in this release.
“We are very pleased with our strong third quarter results,
which underscore the strength of our strategy and the power of the
growth engine we have created,” said Cheryl R. Blanchard, Ph.D.,
Anika’s President and CEO. “We delivered 14% growth in Joint
Preservation and Restoration and higher-than-expected growth in OA
Pain Management, which has grown 11% year-to-date. In the third
quarter, we also continued to advance our product pipeline across
Joint Preservation and Restoration, successfully completed the full
market launch of our RevoMotion Reverse Shoulder System, received
FDA clearance for both our new HA-based regenerative rotator cuff
patch, the Integrity Implant System, and the biocomposite version
of our X-Twist Fixation System, with launches on track for the
first quarter of 2024. Each of these milestones position Anika to
accelerate Joint Preservation and Restoration growth in 2024, as we
continue to focus on commercial execution and actively managing our
costs to drive improved profitability.”
Recent Business Highlights
- Building a Best-in-Class Portfolio of Joint
Preservation and Restoration Solutions
- Successful full market release of RevoMotion™ Reverse Shoulder
Arthroplasty System at 2023 Orthopeadic Summit: Evolving
Technologies (OSET) Annual meeting, expanding Anika’s shoulder
arthroplasty portfolio into the more than $1 billion U.S. reverse
shoulder market.
- Integrity Implant System, Anika’s HA-based regenerative rotator
cuff patch system, and biocomposite version of X-Twist Fixation
System both received final FDA clearance and are on-track for
launch in the first quarter of 2024.
- Expanding medical education nationally with more than 500 U.S.
surgeons trained in 2023 on the safe and effective use of Anika’s
full Joint Preservation and Restoration product portfolio.
- Increasing Leadership in OA Pain Management
- Increasing #1 U.S. market share position in OA Pain Management
with single-injection Monovisc® and multi-injection
Orthovisc®.
- Cingal®, Anika’s next generation non-opioid single-injection
HA-based osteoarthritis pain product, maintains consistent
double-digit growth outside the U.S.
- Anika is awaiting FDA feedback on proposed non-clinical next
steps regarding Cingal U.S. regulatory approval following a type-C
meeting with the FDA in early 2023 and its success in meeting its
latest Phase III Pivotal primary endpoint in the fall of 2022.
- Continuing to explore commercial partnerships for Cingal in the
U.S. and select Asian markets.
Fiscal 2023 Revenue OutlookThe Company has
raised its overall revenue outlook for fiscal year 2023 to between
$164 million and $166 million, representing growth of 5% to 6%
compared to 2022, up from its previous range of $159.5 million to
$163 million.
Revenue ranges by product family are:
- OA Pain Management* of $99.75-$101 million, up 8% to 10%
- Joint Preservation and Restoration of $54.75-$55.5 million, up
9% to 10%
- Non-Orthopedic* of approximately $9.5 million, down ~30%
* Effective January 1, 2023, the Company began to report revenue
from product sales to veterinary customers within the
Non-Orthopedic product family whereas such revenue had been
previously reported within the OA Pain Management product family.
The Company’s growth outlook reflects this reclassification for
both 2023 and 2022.
Conference Call InformationAnika’s management
will hold a conference call and webcast to discuss its financial
results and business highlights today, Thursday, November 2, 2023,
at 5:30 pm ET. The conference call can be accessed by dialing
1-844-826-3035 (toll-free domestic) or 1-412-317-5195
(international) and providing the conference ID number 10182980. A
live audio webcast will be available in the Investor Relations
section of Anika’s website, www.anika.com. A slide presentation
with highlights from the conference call will be available in the
Investor Relations section of 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 AnikaAnika Therapeutics, Inc. (NASDAQ:
ANIK), is a global joint preservation company that creates and
delivers meaningful advancements in early intervention orthopedic
care. Leveraging our core expertise in hyaluronic acid and implant
solutions, we partner with clinicians to provide minimally invasive
products that restore active living for people around the world.
Our focus is on high opportunity spaces within orthopedics,
including Osteoarthritis Pain Management, Regenerative Solutions,
Sports Medicine and Arthrosurface Joint Solutions, and our products
are efficiently delivered in key sites of care, including
ambulatory surgery centers. Anika’s global operations are
headquartered outside of Boston, Massachusetts. For more
information about Anika, please visit www.anika.com.
ANIKA, ANIKA THERAPEUTICS, CINGAL, INTEGRITY, MONOVISC,
ORTHOVISC, REVOMOTION, X-TWIST, and the Anika logo are trademarks
of Anika Therapeutics, Inc. or its subsidiaries or are licensed to
Anika Therapeutics, Inc. for its use.
Non-GAAP Financial InformationNon-GAAP
financial measures should be considered supplemental to, and not a
substitute for, the Company’s reported financial results prepared
in accordance with GAAP. Furthermore, the Company’s definition of
non-GAAP measures may differ from similarly titled measures used by
others. Because non-GAAP financial measures exclude the effect of
items that will increase or decrease the Company’s reported results
of operations, Anika strongly encourages investors to review the
Company’s consolidated financial statements and publicly filed
reports in their entirety. The Company presents these non-GAAP
financial measures because it uses them as supplemental measures in
internally assessing the Company’s operating performance, and, in
the case of Adjusted EBITDA, it is set as a key performance metric
to determine executive compensation. The Company also recognizes
that these non-GAAP measures are commonly used in determining
business performance more broadly and believes that they are
helpful to investors, securities analysts, and other interested
parties as a measure of comparative operating performance from
period to period.
Adjusted Gross MarginAdjusted gross margin is defined by the
Company as adjusted gross profit divided by total revenue. The
Company defines adjusted gross profit as GAAP gross profit
excluding amortization of certain acquired assets and non-cash
product rationalization charges.
Adjusted EBITDA Adjusted EBITDA is defined by the Company as
GAAP net income (loss) excluding depreciation and amortization,
interest and other income (expense), income taxes, stock-based
compensation expense, acquisition related expenses, non-cash
charges related to goodwill impairment, non-cash product
rationalization charges and charges related to discontinuation of a
software project.
Adjusted Net Income (Loss) and Adjusted EPS Adjusted net income
(loss) is defined by the Company as GAAP net income excluding
acquisition related expenses, inclusive of the impact of purchase
accounting, on a tax effected basis, non-cash product
rationalization charges and charges related to discontinuation of a
software project. Adjusted diluted EPS is defined by the Company as
GAAP diluted EPS excluding acquisition related expenses and the
impact of purchase accounting, each on a tax-adjusted per share
basis, non-cash product rationalization charges and charges related
to discontinuation of a software development project.
A reconciliation of adjusted gross profit to gross profit (and
the associated adjusted gross margin calculation), adjusted EBITDA
to net income (loss), adjusted net income (loss) to net income
(loss) and adjusted diluted EPS to diluted EPS, the most directly
comparable financial measures calculated and presented in
accordance with GAAP, is shown in the tables at the end of this
release.
Forward-Looking Statements This press release
may contain 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, concerning
the Company's expectations, anticipations, intentions, beliefs or
strategies regarding the future which are not statements of
historical fact, including statements in the sub-headings, Dr.
Blanchard’s quote, and Recent Business Highlights about the timing
of the launch of Integrity and X-Twist biocomposite, the statements
in Dr. Blanchard’s quote about the anticipated growth of Joint
Preservation and Restoration in 2024, and the statements made in
the section titled Fiscal 2023 Revenue Outlook. 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.
For Investor Inquiries:Anika Therapeutics,
Inc.Mark Namaroff, 781-457-9287Vice President, Investor Relations,
ESG and Corporate Communicationsinvestorrelations@anika.com
Anika Therapeutics, Inc. and Subsidiaries |
Consolidated Statements of Operations |
(in thousands, except per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, |
|
For the NIne Months Ended September 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
$ |
41,465 |
|
|
$ |
40,264 |
|
|
$ |
123,691 |
|
|
$ |
116,614 |
|
Cost of Revenue |
|
16,521 |
|
|
|
17,485 |
|
|
|
46,932 |
|
|
|
47,169 |
|
Gross Profit |
|
24,944 |
|
|
|
22,779 |
|
|
|
76,759 |
|
|
|
69,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
7,791 |
|
|
|
7,301 |
|
|
|
25,105 |
|
|
|
20,433 |
|
Selling, general and administrative |
|
24,827 |
|
|
|
21,276 |
|
|
|
75,512 |
|
|
|
61,745 |
|
Total operating expenses |
|
32,618 |
|
|
|
28,577 |
|
|
|
100,617 |
|
|
|
82,178 |
|
Loss from operations |
|
(7,674 |
) |
|
|
(5,798 |
) |
|
|
(23,858 |
) |
|
|
(12,733 |
) |
Interest and other income (expense), net |
|
635 |
|
|
|
436 |
|
|
|
1,735 |
|
|
|
378 |
|
Loss before income taxes |
|
(7,039 |
) |
|
|
(5,362 |
) |
|
|
(22,123 |
) |
|
|
(12,355 |
) |
Benefit from income taxes |
|
(463 |
) |
|
|
(1,187 |
) |
|
|
(2,456 |
) |
|
|
(2,404 |
) |
Net loss |
$ |
(6,576 |
) |
|
$ |
(4,175 |
) |
|
$ |
(19,667 |
) |
|
$ |
(9,951 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.45 |
) |
|
$ |
(0.29 |
) |
|
$ |
(1.34 |
) |
|
$ |
(0.68 |
) |
Diluted |
$ |
(0.45 |
) |
|
$ |
(0.29 |
) |
|
$ |
(1.34 |
) |
|
$ |
(0.68 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
14,635 |
|
|
|
14,603 |
|
|
|
14,659 |
|
|
|
14,542 |
|
Diluted |
|
14,635 |
|
|
|
14,603 |
|
|
|
14,659 |
|
|
|
14,542 |
|
Anika
Therapeutics, Inc. and Subsidiaries |
Consolidated
Balance Sheets |
(in
thousands, except per share data) |
|
|
|
|
|
|
September
30, |
|
December
31, |
ASSETS |
2023 |
|
2022 |
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
70,651 |
|
|
$ |
86,327 |
|
Accounts receivable, net |
|
34,682 |
|
|
|
34,627 |
|
Inventories, net |
|
43,724 |
|
|
|
39,765 |
|
Prepaid expenses and other current assets |
|
7,721 |
|
|
|
8,828 |
|
Total current assets |
|
156,778 |
|
|
|
169,547 |
|
Property and equipment, net |
|
45,937 |
|
|
|
48,279 |
|
Right-of-use assets |
|
29,053 |
|
|
|
30,696 |
|
Other long-term assets |
|
18,951 |
|
|
|
17,219 |
|
Deferred tax assets |
|
1,424 |
|
|
|
1,449 |
|
Intangible assets, net |
|
68,762 |
|
|
|
74,599 |
|
Goodwill |
|
7,253 |
|
|
|
7,339 |
|
Total assets |
$ |
328,158 |
|
|
$ |
349,128 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
8,251 |
|
|
$ |
9,074 |
|
Accrued expenses and other current liabilities |
|
19,813 |
|
|
|
18,840 |
|
Total current liabilities |
|
28,064 |
|
|
|
27,914 |
|
Other long-term liabilities |
|
400 |
|
|
|
398 |
|
Deferred tax liability |
|
1,955 |
|
|
|
6,436 |
|
Lease liabilities |
|
27,253 |
|
|
|
28,817 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
Common stock, $0.01 par value |
|
146 |
|
|
|
146 |
|
Additional paid-in-capital |
|
85,852 |
|
|
|
81,141 |
|
Accumulated other comprehensive loss |
|
(6,564 |
) |
|
|
(6,443 |
) |
Retained earnings |
|
191,052 |
|
|
|
210,719 |
|
Total stockholders' equity |
|
270,486 |
|
|
|
285,563 |
|
Total liabilities and stockholders' equity |
$ |
328,158 |
|
|
$ |
349,128 |
|
Anika
Therapeutics, Inc. and Subsidiaries |
Reconciliation of GAAP Gross Profit to Adjusted Gross
Profit |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended Sep 30, |
|
For the Nine
Months Ended Sep 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Gross Profit |
$ |
24,944 |
|
|
$ |
22,779 |
|
|
$ |
76,759 |
|
|
$ |
69,445 |
|
Product rationalization related charges |
|
748 |
|
|
|
2,636 |
|
|
|
748 |
|
|
|
2,636 |
|
Acquisition related intangible asset amortization |
|
1,561 |
|
|
|
1,562 |
|
|
|
4,684 |
|
|
|
4,686 |
|
Adjusted Gross Profit |
$ |
27,253 |
|
|
$ |
26,977 |
|
|
$ |
82,191 |
|
|
$ |
76,767 |
|
|
|
|
|
|
|
|
|
Unadjusted Gross Margin |
|
60 |
% |
|
|
57 |
% |
|
|
62 |
% |
|
|
60 |
% |
Adjusted Gross Margin |
|
66 |
% |
|
|
67 |
% |
|
|
66 |
% |
|
|
66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Reconciliation of GAAP Net Income to Adjusted
EBITDA |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
For the
Three Months Ended Sep 30, |
|
For the Nine
Months Ended Sep 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net loss |
$ |
(6,576 |
) |
|
$ |
(4,175 |
) |
|
$ |
(19,667 |
) |
|
$ |
(9,951 |
) |
Interest and other (income) expense, net |
|
(635 |
) |
|
|
(436 |
) |
|
|
(1,735 |
) |
|
|
(378 |
) |
Benefit from income taxes |
|
(463 |
) |
|
|
(1,187 |
) |
|
|
(2,456 |
) |
|
|
(2,404 |
) |
Depreciation and amortization |
|
1,755 |
|
|
|
1,549 |
|
|
|
5,282 |
|
|
|
4,980 |
|
Stock-based compensation |
|
3,561 |
|
|
|
3,876 |
|
|
|
11,428 |
|
|
|
10,502 |
|
Product rationalization |
|
748 |
|
|
|
2,636 |
|
|
|
748 |
|
|
|
2,636 |
|
Arbitration settlement |
|
- |
|
|
|
- |
|
|
|
3,250 |
|
|
|
- |
|
Acquisition related intangible asset amortization |
|
1,787 |
|
|
|
1,787 |
|
|
|
5,361 |
|
|
|
5,361 |
|
Discontinuation of software development project |
|
4,473 |
|
|
|
- |
|
|
|
4,473 |
|
|
|
- |
|
Costs of shareholder activism |
|
- |
|
|
|
- |
|
|
|
3,033 |
|
|
|
- |
|
Adjusted EBITDA |
$ |
4,650 |
|
|
$ |
4,050 |
|
|
$ |
9,717 |
|
|
$ |
10,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Reconciliation of GAAP Net Income to Adjusted Net
Income |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
For the
Three Months Ended Sep 30, |
|
For the Nine
Months Ended Sep 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net loss |
$ |
(6,576 |
) |
|
$ |
(4,175 |
) |
|
$ |
(19,667 |
) |
|
$ |
(9,951 |
) |
Product rationalization, tax effected |
|
699 |
|
|
|
2,056 |
|
|
|
665 |
|
|
|
1,947 |
|
Arbitration settlement, tax effected |
|
- |
|
|
|
- |
|
|
|
2,889 |
|
|
|
- |
|
Acquisition related intangible asset amortization, tax
effected |
|
1,669 |
|
|
|
1,394 |
|
|
|
4,766 |
|
|
|
3,960 |
|
Discontinuation of software development project, tax effected |
|
4,179 |
|
|
|
- |
|
|
|
3,976 |
|
|
|
- |
|
Costs of shareholder activism, tax effected |
|
- |
|
|
|
- |
|
|
|
2,696 |
|
|
|
- |
|
Adjusted net income (loss) |
$ |
(29 |
) |
|
$ |
(725 |
) |
|
$ |
(4,674 |
) |
|
$ |
(4,044 |
) |
|
|
|
|
|
|
|
|
Anika
Therapeutics, Inc. and Subsidiaries |
Reconciliation of GAAP Diluted Earnings Per Share to
Adjusted Diluted Earnings Per Share |
(per share
data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
For the
Three Months Ended Sep 30, |
|
For the Nine
Months Ended Sep 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Diluted net loss per share |
$ |
(0.45 |
) |
|
$ |
(0.29 |
) |
|
$ |
(1.34 |
) |
|
$ |
(0.68 |
) |
Product rationalization, tax effected |
|
0.05 |
|
|
|
0.14 |
|
|
|
0.05 |
|
|
|
0.13 |
|
Arbitration settlement, tax effected |
|
- |
|
|
|
- |
|
|
|
0.20 |
|
|
|
- |
|
Acquisition related intangible asset amortization, tax
effected |
|
0.11 |
|
|
|
0.10 |
|
|
|
0.33 |
|
|
|
0.27 |
|
Discontinuation of software development project, tax effected |
|
0.29 |
|
|
|
- |
|
|
|
0.27 |
|
|
|
- |
|
Costs of shareholder activism, tax effected |
|
- |
|
|
|
- |
|
|
|
0.19 |
|
|
|
- |
|
Adjusted diluted net income (loss) per share |
$ |
0.00 |
|
|
$ |
(0.05 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.28 |
) |
Anika
Therapeutics, Inc. and Subsidiaries |
Revenue by
Product Family |
(in
thousands, except percentages) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended Sep 30, |
|
For the Nine
Months Ended Sep 30, |
|
2023 |
|
2022 |
|
$ change |
|
% change |
|
2023 |
|
2022 |
|
$ change |
|
% change |
OA Pain Management |
$ |
24,888 |
|
|
$ |
24,476 |
|
|
$ |
412 |
|
|
2 |
% |
|
$ |
76,855 |
|
|
$ |
69,533 |
|
|
$ |
7,322 |
|
|
11 |
% |
Joint Preservation and Restoration |
|
13,470 |
|
|
|
11,821 |
|
|
|
1,649 |
|
|
14 |
% |
|
|
39,583 |
|
|
|
36,055 |
|
|
|
3,528 |
|
|
10 |
% |
Non-Orthopedic |
|
3,107 |
|
|
|
3,967 |
|
|
|
(860 |
) |
|
-22 |
% |
|
|
7,253 |
|
|
|
11,026 |
|
|
|
(3,773 |
) |
|
-34 |
% |
Revenue |
$ |
41,465 |
|
|
$ |
40,264 |
|
|
$ |
1,201 |
|
|
3 |
% |
|
$ |
123,691 |
|
|
$ |
116,614 |
|
|
$ |
7,077 |
|
|
6 |
% |
Note: Effective January 1, 2023, the Company began to report
revenue from product sales to veterinary customers within the
Non-Orthopedic product family whereas such revenue had been
previously reported within the OA Pain Management product family.
Revenue from product sales to veterinary customers amounted to $1.6
million and $1.2 million for the three months ended September 30,
2023 and 2022, respectively, and $3.1 million and $4.6 million for
the nine months ended September 30, 2023 and 2022 respectively, and
are included within the Non-Orthopedic product family for all
periods presented.
Anika Therapeutics (NASDAQ:ANIK)
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