Anika Therapeutics Announces 2000 Fourth Quarter and Year End Results; Begins ORTHOVISC Phase III Clinical Trial.Business Editors WOBURN, Mass.--(BUSINESS WIRE)--March 2, 2001 Anika Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. Inc. (Nasdaq:ANIK ANIK Canadian COMSAT ) today reported revenue of $7,116,000 for the fourth quarter ending Dec. 31, 2000 compared with $3,618,000 for the fourth quarter of 1999. The company recorded net income for the quarter of $2,339,000, or $.24 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, versus net income of $368,000, or $.04 per diluted share, for the same period last year. Included in fourth quarter revenue was $4,249,000, which Anika recognized in connection with the previously announced early termination of a marketing and distribution agreement with Zimmer Inc. Recognition of this revenue had been deferred in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the company's revenue recognition policies. Excluding the impact of this one-time event, fourth quarter results would show revenue of $2,867,000 and a loss of $1,361,000, or $.14 per share. Revenue for the year ending Dec. 31, 2000 was $16,335,000 compared with $13,483,000 for 1999. Anika recorded net income for 2000 of $174,000, or $.02 per diluted share, compared with a net loss of $2,496,000, or $.24 per diluted share, for 1999. As noted above, results for 2000 include revenue of $4,249,000 recognized in connection with the previously announced early termination of a marketing and distribution agreement with Zimmer Inc. Excluding the impact of this one-time event, year 2000 results would show revenue of $12,086,000 and a loss of $3,526,000, or $.35 per share. In addition, results for 1999 included a first quarter charge of $3,625,000 for a change in accounting principle relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc revenue recognition for non-refundable fees, the remaining unamortized portion of which is included in the one-time fourth quarter 2000 revenue adjustment referred to above. Income for 1999 before the cumulative effect of this accounting change was $1,129,000, or $.11 per diluted share. The company also announced today that it has commenced a new Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA human clinical trial for ORTHOVISC(R), its treatment for osteoarthritis osteoarthritis or osteoarthrosis or degenerative joint disease Most common joint disorder, afflicting over 80% of those who reach age 70. It does not involve excessive inflammation and may have no symptoms, especially at first. of the knee. This new trial is designed to include 360 patients at up to 20 centers in the U.S. and Canada with monitoring for six months after initial treatment. J. Melville Engle, chairman, president and chief executive officer, said, "Our plans currently call for increased investment in research and development, particularly relating to processes that may produce different physical characteristics and uses for hyaluronic acid hyaluronic acid: see mucopolysaccharide. Hyaluronic acid A polysaccharide which is an integral part of the gel-like substance of animal connective tissue; it supposedly serves as a lubricant and shock absorbent in the joints. (HA)." Engle said he was pleased with the commencement of the ORTHOVISC trial, consistent with plans the company announced in November 2000. He added that total research and development costs for 2001, including clinical trials, are currently expected to be approximately twice 2000 levels. During the quarter, Anika established logistics arrangements with third-party firms to ensure continuing distribution of ORTHOVISC by Anika to patients and physicians in Canada and certain European nations previously served by Zimmer. Engle further noted that Anika plans to begin a clinical trial for INCERT(R)-S, a cross-linked HA formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation designed to inhibit inhibit /in·hib·it/ (in-hib´it) to retard, arrest, or restrain. in·hib·it v. 1. To hold back; restrain. 2. scarring scar 1 n. 1. A mark left on the skin after a surface injury or wound has healed. 2. A lingering sign of damage or injury, either mental or physical: and reduce pain following spinal surgery, during the second quarter of 2001. The trial, which is anticipated to initially involve 100 patients, will monitor scar tissue scar tissue n. Dense, fibrous connective tissue that forms over a healed wound or cut. formation and pain levels following spinal surgery and will be conducted at up to 20 clinical centers in the U.S. About Anika Therapeutics With headquarters in Woburn, Mass., Anika Therapeutics Inc. (www.anikatherapeutics.com) develops, manufactures and commercializes therapeutic products and devices intended to promote the repair, protection and healing of bone, cartilage cartilage (kär`təlĭj), flexible semiopaque connective tissue without blood vessels or nerve cells. It forms part of the skeletal system in humans and in other vertebrates, and is also known as gristle. and soft tissue. These products are based on hyaluronic acid (HA), a naturally occurring, biocompatible biocompatible /bio·com·pat·i·ble/ (-kom-pat´i-b'l) being harmonious with life; not having toxic or injurious effects on biological function. polymer found throughout the body. In addition to ORTHOVISC(R), a treatment for osteoarthritis of the knee (not approved for sale in the U.S.), Anika markets HYVISC(R) in the U.S. for the treatment of equine equine Any member of the ungulate family Equidae, which includes the modern horses, zebras, and asses, all in the genus Equus, as well as more than 60 species known only from fossils. Equines descended from the dawn horse (see Eohippus). osteoarthritis through Boehringer Ingelheim Vetmedica Inc. and manufactures AMVISC(R) and AMVISC(R) Plus, HA viscoelastic Adj. 1. viscoelastic - having viscous as well as elastic properties natural philosophy, physics - the science of matter and energy and their interactions; "his favorite subject was physics" products for ophthalmic ophthalmic /oph·thal·mic/ (of-thal´mik) ocular (1). oph·thal·mic adj. Of or relating to the eye; ocular. Ophthalmic Pertaining to the eye. surgery, for Bausch & Lomb. Therapies currently under development include INCERT(R), a family of HA products designed to prevent post-surgical adhesions Adhesions Definition Adhesions are fibrous bands of scar tissue that form between internal organs and tissues, joining them together abnormally. . Anika is also collaborating with Orquest Inc. to manufacture OSSIGEL(R), an injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. formulation of basic fibroblast growth factor Basic fibroblast growth factor, also known as bFGF or FGF2, is a member of the fibroblast growth factor family. In normal tissue, basic fibroblast growth factor is present in basement membranes and in the subendothelial extracellular matrix of blood combined with HA, designed to accelerate the healing of bone fractures Fractures Definition A fracture is a complete or incomplete break in a bone resulting from the application of excessive force. Description , which is also under development. The statements made in this press release which are not statements of historical fact are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve known and unknown risks, uncertainties and other factors. The words "believe," "will," "would," "expect," "anticipate," "intend," "estimate," "plan," and other expressions that are predictions or indicate future events and trends and that do not constitute historical matters, identify forward-looking statements. 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. In particular, there can be no assurance that the company will: (i) begin clinical trials of INCERT-S or successfully complete clinical trials of ORTHOVISC or INCERT-S; (ii) obtain clinical data which will support a PMA PMA (papillary-marginal-attached), n a system of epidemiologic scoring of periodontal disease devised by Schour and Massler in which the symbols denote the areas involved in gingival inflammation. PMA Progressive muscular atrophy application and/or FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. approval of either ORTHOVISC or INCERT-S; (iii) submit a pre-market approval application in a timely manner or at all or receive FDA or other regulatory approvals of ORTHOVISC or INCERT-S; or (iv) obtain such approvals in a timely manner or without the need for additional clinical trials. In addition, there can be no assurance that any delay in receiving any such approvals will not adversely affect the company's competitive position or, if completed, meaningful sales of the products will be achieved. The company cannot make any assurances that the termination of the distribution agreement with Zimmer will not have a material adverse impact on sales of ORTHOVISC or that the company will be able to obtain adequate or appropriate distributors for sales of ORTHOVISC or INCERT-S. Moreover, there can be no assurances that the company's investments in research and product development will lead to viable products or revenue growth. Certain other factors that might cause the company's actual results to differ materially from those in the forward-looking statements include those set forth under the headings "Business," "Risk Factors and Certain Factors Affecting Future Operating Results" and "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 1999, and Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, 2000, June 30, 2000 and Sept. 30, 2000, as well as those described in the company's other SEC filings.
Anika Therapeutics Inc.
STATEMENTS OF OPERATIONS
Three months ended Year ended
Dec. 31, Dec. 31,
2000 1999 2000 1999
Product revenue $ 4,015,817 $ 3,518,316 $12,935,222 $13,082,662
Licensing payments 3,100,000 100,000 3,400,000 400,000
Total revenue 7,115,817 3,618,316 16,335,222 13,482,662
Cost of Sales 3,410,689 1,613,694 9,870,559 6,440,166
Gross Profit 3,705,128 2,004,622 6,464,663 7,042,496
Operating expenses:
Research and development 522,848 1,328,563 3,259,984 4,154,479
Selling, general and
administrative 1,117,531 764,029 4,188,044 3,029,394
Total operating
expenses 1,640,379 2,092,592 7,448,028 7,183,873
Income (loss) from
operations 2,064,749 (87,970) (983,365) (141,377)
Interest income, net (280,204) (230,504) (1,172,859) (1,068,430)
Gain on sale of securities -- (233,633) -- (233,633)
Income before income
taxes 2,344,953 376,167 189,494 1,160,686
Income taxes 5,999 7,721 15,940 31,412
Income (loss) before
cumulative effect of
change in accounting
principle 2,338,954 368,446 173,554 1,129,274
Cumulative effect of
change in accounting
principle -- -- -- (3,625,000)
Net income (loss) $ 2,338,954 $ 368,446 $ 173,554 $(2,495,726)
Basic earnings (loss) per share:
Income before cumulative
effect of change in
accounting principle $ 0.24 $ 0.04 $ 0.02 $ 0.12
Cumulative effect of change
in accounting
principle $ -- $ -- $ -- $ (0.37)
Net income (loss) $ 0.24 $ 0.04 $ 0.02 $ (0.26)
Shares used for computing
basic EPS 9,934,280 9,941,901 9,870,323 9,740,560
Diluted earnings (loss) per share:
Income before cumulative
effect of change in
accounting principle $ 0.24 $ 0.04 $ 0.02 $ 0.11
Cumulative effect of change
in accounting principle $ -- $ -- $ -- $ (0.35)
Net income (loss) $ 0.24 $ 0.04 $ 0.02 $ (0.24)
Shares used for computing
diluted EPS 9,934,280 10,305,481 10,016,453 10,220,584
Anika Therapeutics Inc.
Balance Sheets as of:
Dec. 31
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $8,265,936 $6,440,705
Short term investments 10,039,849 8,184,870
Accounts receivable, net 1,692,457 2,106,452
Inventories 4,737,645 5,493,701
Prepaid expenses 612,890 721,206
Total current assets 25,348,777 22,946,934
Property and equipment 8,621,579 8,116,233
Less accumulated depreciation (5,498,455) (4,587,692)
Net property and equipment 3,123,124 3,528,541
Long term investments -- 5,558,029
Notes receivable from officers 382,000 353,000
Long term deposits 124,600 124,600
Total Assets $28,978,501 $32,511,104
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $870,502 $629,080
Accrued expenses 1,395,677 1,552,661
Deferred revenue -- 1,792,505
Total current liabilities 2,266,179 3,974,246
Long term deferred revenue -- 2,825,000
Stockholders' equity:
Undesignated preferred stock,
$.01 par value: authorized
1,250,000 shares; no shares issued
and outstanding -- --
Common stock, $.01 par value:
authorized 30,000,000
shares; issued 9,991,943 shares 99,919 99,919
Additional paid in capital 31,735,660 31,959,316
Deferred compensation (244,549) (615,001)
Treasury stock (at cost),
57,663 and 200,863 shares,
respectively (279,756) (959,870)
Accumulated deficit (4,598,952) (4,772,506)
Total stockholders' equity 26,712,322 25,711,858
Total Liabilities and
Stockholders' Equity $28,978,501 $32,511,104
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