Anika Therapeutics Announces Third Quarter Results and Future Directions.Business Editors and Health/Medical Writers WOBURN, Mass.--(BW HealthWire)--Nov. 13, 2000 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 announced that revenue for the third quarter ending September 30, 2000 equaled $2,730,000 compared with $2,995,000 for the same period last year. The company recorded a net loss for the quarter of $1,383,000, or $.14 per share, versus a loss of $93,000, or $.01 per share, for the third quarter of 1999. Revenue for the nine-month period ending September 30, 2000 was $9,219,000 compared with $9,864,000 for the comparable period of 1999. Anika recorded a net loss for the first nine months of 2000 of $2,165,000, or $.22 per share, compared with a net loss of $2,864,000, or $.29 per basic share, for the same period last year. Results for the 1999 period included a charge in the first quarter of 1999 of $3,625,000 for a previously announced 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. Income before the cumulative effect of the accounting change for the first nine months of 1999 was $761,000, or $.08 per share. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. J. Melville Engle, chairman, president and chief executive officer, revenue for the quarter was adversely impacted by lower unit prices for AMVISC(R) and AMVISC(R) Plus, 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 that Anika supplies to Bausch & Lomb Surgical. As previously announced, in July 2000 Anika signed a new contract with Bausch & Lomb Surgical. The new contract contains lower unit prices for AMVISC(R) and AMVISC(R) Plus than in the prior agreement. Gross margin was also hurt by lower manufacturing cost absorption as bulk stage work-in-process inventory, which had been built up in prior periods in anticipation of U.S. launch of ORTHOVISC(R), (Anika's product 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), was used to partially meet delivery requirements The stipulation that requires that an item of materiel must be delivered in the total quantity required by the date required. for other products. Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold for the third quarter of 2000 included approximately $1.1 million attributable to this matter. Engle said the company expects its gross margin to be adversely impacted through at least mid 2001 while it continues to draw down its bulk stage work-in-process inventory. Anika's bulk stage work-in-process inventory can be used for all of the company's products and does not have a limited shelf life. Anika ended the most recent quarter with cash and cash investments totaling $18.0 million. "We made key decisions that will shape our product and clinical development programs going forward," Engle said. "First, we completed an in-depth analysis of our recent failed Phase III clinical trial Noun 1. phase III clinical trial - 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 results for ORTHOVISC(R). We carefully examined clinical study variables that may have contributed to the trial's unfavorable results, including trial inclusion and exclusion criteria exclusion criteria AIDS Donor exclusion criteria, see there such as patient physical condition, age, degree of osteoarthritis progression, etc. We believe from our analysis of the data that there is a viable subset A group of commands or functions that do not include all the capabilities of the original specification. Software or hardware components designed for the subset will also work with the original. of the patient population that benefited from the ORTHOVISC treatment. Accordingly, we have decided to conduct a new Phase III clinical trial for ORTHOVISC. Secondly, in 2001 we plan to commence a clinical trial in the U.S. for INCERT-S, a hyaluronic-acid based therapy under development designed to inhibit 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: following spinal surgery. Finally, we plan to increase our research and development efforts with the goal of expanding our hyaluronic-acid based technology platform," he said. 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 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 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), 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 surgery, for Bausch & Lomb Surgical. 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 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, there can be no assurance that the Company will:(i) begin or complete clinical trials of ORTHOVISC or INCERT-S;(ii) successfully complete clinical trials of ORTHOVISC or INCERT-S;(iii) obtain additional clinical data will support the efficacy of ORTHOVISC(R), (iv) complete the planned clinical trials of ORTHOVISC or INCERT-S 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; (v) submit a pre-market approval application in a timely manner or at all or (vi) receive FDA or other regulatory approvals of ORTHOVISC or that such approvals will be obtained 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 effect the Company's competitive position or, if completed, meaningful sales of the products will be achieved. Furthermore, under certain circumstances, (i) Bausch & Lomb Surgical may have the right to terminate the agreement and/or (ii) the agreement may revert re·vert v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. to a non-exclusive basis; in each case, the Company cannot make any assurances such circumstances will not occur. There can be no assurances that the Company's inventory management efforts will result in improved gross margins in future periods. There can be no assurances that the Company will achieve incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. sales of its ophthalmic products to Bausch & Lomb Surgical and/or other companies sufficient to offset the effects of the price reduction to Bausch & Lomb Surgical. 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 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 December 31, 1999, as well as those described in the Company's other SEC filings.
Anika Therapeutics, Inc.
STATEMENTS OF OPERATIONS (Unaudited)
Three months ended Nine Months ended
September 30, September 30,
2000 1999 2000 1999
(As restated) (As restated)
Product revenue $ 2,629,807 $ 2,895,350 $ 8,919,405 $ 9,564,346
Licensing payments 100,000 100,000 300,000 300,000
Total revenue 2,729,807 2,995,350 9,219,405 9,864,346
Cost of Sales 2,804,285 1,429,587 6,459,870 4,826,472
Gross Profit (74,478) 1,565,763 2,759,535 5,037,874
Operating expenses:
Research and
development 516,171 1,193,240 2,737,136 2,825,916
Selling, general
and
administrative 1,093,841 714,173 3,070,513 2,265,365
Total operating
expenses 1,610,012 1,907,413 5,807,649 5,091,281
loss from
opertations (1,684,490) (341,650) (3,048,114) (53,407)
Interest income,
net 301,666 237,897 892,655 837,926
Income (loss)
before income
taxes (1,382,824) (103,753) (2,155,459) 784,519
Income taxes -- (10,872) 9,941 23,691
Income (loss)
before
cumulative
effect of
change in
accounting
principle (1,382,824) (92,881) (2,165,400) 760,828
Cummulative
effect of
change in
accounting
principle -- -- -- (3,625,000)
Net loss $(1,382,824) $ (92,881) $(2,165,400) $(2,864,172)
Basic earnings
(loss) per share:
Income (loss)
before
cumulative
effect of
change in
accounting
principle $ (0.14) $ (0.01) $ (0.22) $ 0.08
Cumulative
effect of
change in
accounting
principle $ -- -- $ -- (0.37)
Net loss $ (0.14) $ (0.01) $ (0.22) $ (0.29)
Shares used
for computing
basic EPS 9,934,280 9,940,228 9,870,323 9,900,317
Diluted earnings
(loss) per share:
Income (loss)
before
cumulative
effect of
change in
accounting
principle $ (0.14) $ (0.01) $ (0.22) $ 0.08
Cumulative
effect of
change in
accounting
principle $ -- -- $ -- (0.36)
Net loss $ (0.14) $ (0.01) $ (0.22) $ (0.28)
Shares used
for computing
diluted EPS 9,934,280 9,940,228 9,870,323 10,191,300
Anika Therapeutics, Inc.
Balance Sheets as of, September 30, December 31,
2000 1999
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 5,474,379 $ 6,440,705
Short term investments 12,495,934 8,184,870
Accounts receivable 1,849,674 2,106,452
Inventories 6,566,161 5,493,701
Prepaid expenses 459,911 721,206
Total current assets 26,846,059 22,946,934
Property and equipment 8,530,217 8,116,233
Less accumulated depreciation 5,263,943 4,587,692
Net property and equipment 3,266,274 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 $ 30,618,933 $ 32,511,104
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable $ 478,217 $ 629,080
Accrued expenses 1,522,648 1,552,661
Deferred revenue 4,315,173 1,792,505
Total current liabilities 6,316,038 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 (315,022) (615,001)
Treasury stock (at cost),
57,663 and 200,863 shares,
respectively (279,756) (959,870)
Accumulated deficit (6,937,906) (4,772,506)
Total stockholders equity 24,302,895 25,711,858
Total Liabilities and Stockholders
Equity $ 30,618,933 $ 32,511,104
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