Anika Therapeutics Announces Early Termination of ORTHOVISC Distribution Agreement; Company to Recognize $4.3 Million of Previously Deferred Revenue in the Fourth Quarter.

Business/Technology Editors

WOBURN, Mass.--(BUSINESS WIRE)--Nov. 13, 2000

Anika Therapeutics, Inc. (NASDAQ:ANIK) today announced it has reached an agreement with Zimmer, Inc. for an early termination of its marketing and distribution agreement for ORTHOVISC(R), Anika's hyaluronic acid-based treatment for osteoarthritis of the knee. Zimmer, a subsidiary of Bristol-Myers Squibb, has been the exclusive distributor for Anika's product in Canada, parts of Europe and certain other territories.

Under the terms of the termination agreement, Zimmer has the right to distribute ORTHOVISC from its existing inventory through the end of the year in the countries where it is currently sold. The early termination agreement also eliminates, among other things, all obligations with respect to future milestone payments, minimum purchases, unit pricing adjustments and provides for the disposal of Zimmer units held on Anika premises.

As a result of the early termination of the distribution agreement, Anika expects to recognize approximately $4.3 million of revenue in the fourth quarter of 2000 for amounts previously received from Zimmer, which had been deferred under the company's revenue recognition policies.

"We are fully committed to the international marketing of ORTHOVISC,(R)"said J. Melville Engle, chairman, president and chief executive officer, "Further, we intend to quickly seek to establish relationships with new distribution partners in regions where the product was previously sold by Zimmer so physicians and their patients will be able to obtain the product once Zimmer ceases to distribute ORTHOVISC. Keeping the sales momentum of the product is a key goal for us."

About Anika Therapeutics

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 and soft tissue. These products are based on hyaluronic acid (HA), a naturally occurring, biocompatible 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 osteoarthritis through Boehringer Ingelheim Vetmedica, Inc. and manufactures AMVISC(R) and AMVISC(R) Plus, HA viscoelastic products for ophthalmic surgery, for Bausch & Lomb Surgical. Therapies currently under development include INCERT(R), a family of HA products designed to prevent post-surgical adhesions. Anika is also collaborating with Orquest, Inc. to manufacture OSSIGEL(R), an injectable formulation of basic fibroblast growth factor combined with HA designed to accelerate the healing of bone fractures, which is also under development.

The statements made in this press release which are not statements of historical fact are forward-looking statements within the meaning of Section 27A of the Securities Exchange 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," "seek" and other expressions which are predictions of or indicate future events and trends and which 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, the Company may not be able to identify or engage appropriate distribution partners for ORTHOVISC(R) or such partners may not be able to effectively market or distribute ORTHOVISC(R). Moreover, there can be no assurances that the Company's investments in the clinical research and product development in OSSIGEL(R) and INCERT(R) 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 of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 1999, as well as those described in the Company's other SEC filings.