Anika Therapeutics Corrects and Replaces Previous News Release.

WOBURN, Mass.--(BW HealthWire)--Oct. 19, 1998--

Anika Therapeutics Says FDA Requires

Additional Clinical Data for Approval Of ORTHOVISC

Anika Therapeutics, Inc. (NASDAQ:ANIK) today said it has received a letter from the U.S. Food and Drug Administration's (FDA) Center for Devices and Radiological Health stating that the company's pre-market approval (PMA) application for ORTHOVISC(R) sodium hyaluronate, a treatment for osteoarthritis of the knee, is not approvable and that additional clinical data will be required to demonstrate the effectiveness of ORTHOVISC. The FDA letter recommended that Anika consult with the agency on the design of a new study and stated that clinical and other data from the initial PMA submission may be incorporated to support a future PMA submission.

"We are obviously disappointed that the FDA has indicated that more clinical data is necessary for ORTHOVISC to be approved," said J. Melville Engle, president and chief executive officer. "We have confidence in ORTHOVISC's effectiveness and plan to obtain the additional clinical data required as quickly as possible." Anika expects that its marketing partner, Zimmer, Inc., a wholly owned subsidiary of Bristol-Myers Squibb Co., will commence supplemental clinical studies shortly in Canada and other countries to support its marketing efforts. Data from these studies may also be used to support the new PMA application.

Engle noted that while expenditures related to a new clinical trial will impact Anika's financial results, the Company believes the combination of the revenues from its international ORTHOVISC business and the AMVISC(R) product line should be sufficient to fund its operations including expenses related to the clinical trial.

J. Raymond Elliott, president of Zimmer, said, "We continue to believe in the effectiveness of ORTHOVISC and plan to work very closely with Anika in gathering the data necessary to comply with the FDA's request."

The clinical study submitted as part of the December 31, 1997 PMA application was designed to demonstrate that ORTHOVISC is safe, alleviates pain and improves mobility in patients suffering from osteoarthritis of the knee. Although the FDA letter acknowledged that the Company's analysis of data demonstrated statistical significance at some endpoints in a retrospectively defined subgroup, the letter stated that the data failed to demonstrate effectiveness according to the study's pre-determined success criteria. The Company also noted that The Therapeutic Goods Administration of Australia has issued an initial decision to deny the ORTHOVISC application. An appeal will be filed as allowed under their system of approval.

In the prospective, randomized double-blind clinical trial, a total of 226 patients with osteoarthritis of the knee were enrolled at ten U.S. medical centers. The study was designed to assess the safety and effectiveness of ORTHOVISC in comparison to a saline placebo and entailed three intra-articular injections over a two-week period. The study assessed the patients after the third injection at weeks 7, 11, 15, 21 and 27. After accounting for dropouts, 181 patients were evaluated (93 in the ORTHOVISC group and 88 in the saline group). The primary endpoints were: Patient Global Assessment, Investigator Global Assessment, Pain on Standing and Pain on Walking Fifty Feet. Secondary endpoints used to evaluate effectiveness were the WOMAC (a commonly utilized composite score) Pain Score, the WOMAC Function Score, the WOMAC Stiffness Score and Time to Walk 50 feet.

Addressing safety, there were no serious device-related adverse events in the ORTHOVISC treatment group and there was no statistical difference in adverse events between the ORTHOVISC group and the saline placebo group.

The study showed statistical significance in the WOMAC Pain Score measure, a secondary endpoint (p<.05) at the 27 week assessment period in the per protocol population. Analysis for effectiveness showed statistical significance in a 135 patient subset (66 ORTHOVISC and 69 saline) after the retrospective exclusion of 46 patients who had a WOMAC Pain Score >12 in the untreated knee. The Company believes that pain in the untreated knee may have had the effect of confounding the study results. This observation was supported by several retrospective analyses of the data.

In the 135 patient subset, statistical significance was seen in: Patient Global Assessment (p<.006 at week 11 and p<.04 at week 21), Investigator Global Assessment (p<.02 at week 11 and p<.05 at week 21), Pain on Standing (p<.03 at weeks 11 and 27), WOMAC Pain Score (p<.04 at week 7, p<.009 at week 11, p<.05 at week 15 and p<.03 at week 27), WOMAC function score (p<.04 at week 11), Time to Walk 50 feet (p<.04 at week 11, p<.05 at week 21). In addition, statistical significance was seen in the repeated measures ANOVA statistical analysis over the period of 7 to 27 weeks for the following endpoints: Patient Global Assessment (p<.03), Investigator Global Assessment (p< .04), Pain on Standing (p< .04) and the Composite Endpoint (p<.03).

ORTHOVISC is currently being sold in Canada, Spain and Turkey and has received the CE Mark facilitating sale throughout the European Union. In November 1997, Anika signed a marketing and distribution agreement with Zimmer to distribute ORTHOVISC in the U.S., Canada and select Asia-Pacific markets. The agreement was amended earlier this year to include Latin America and most of Europe. ORTHOVISC is distributed in Spain and Portugal through Grupo Ferrer Internacional, S.A.

An ultra-pure, high-molecular weight, naturally derived form of hyaluronic acid (HA), ORTHOVISC is designed to emulate the viscoelastic and cushioning properties of natural HA found in the synovial fluid of healthy joints. HA coats, lubricates and provides shock absorption protection to joint tissues. ORTHOVISC is injected into the joint space three times over a two-week period.

Anika develops, manufactures and commercializes therapeutic products and devices intended to promote the protection and healing of bone, cartilage and soft tissue. These products are based on hyaluronic acid (HA), a naturally occurring, bio-compatible polymer found throughout the body. Anika's currently marketed products consist of ORTHOVISC for the treatment of osteoarthritis in humans and HYVISC(R) for the treatment of equine osteoarthritis. Anika also manufactures AMVISC and AMVISC Plus, HA products used as viscoelastic supplements in ophthalmic surgery, for Bausch & Lomb Surgical. Therapies currently under development include INCERT(R), an HA product designed to prevent post-surgical adhesions and HA oligosaccharides for the treatment of cancer. Anika is also collaborating with Orquest, Inc. to manufacture OSSIGEL(TM), an injectable formulation of basic fibroblast growth factor combined with HA designed to accelerate the healing of bone fractures.

The statements made in this press release which are not historical facts 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. The Company's actual results could differ materially from those set forth in the forward-looking statements as a result of a number of factors. In particular, the Company will need to successfully design and complete an additional clinical trial or trials to demonstrate the effectiveness of ORTHOVISC. There can be no assurance that such a trial or trials can be completed in a timely manner or at all or, if completed, that the results of such a trial will produce data supporting the effectiveness of ORTHOVISC. Even if the Company is able to successfully design and complete additional clinical trials and the results thereof support the effectiveness of ORTHOVISC, there can be no assurance that the Company will receive FDA or other regulatory approval of ORTHOVISC, or that such approval will be obtained in a timely manner or without the need for additional clinical trials. In addition, there can be no assurance that the Company will generate sufficient earnings to fund additional clinical studies, thereby, requiring the Company to utilize its cash reserves. Certain other factors that might cause the Company's actual results to differ materially from those set forth in the forward-looking statements include those factors set forth under the heading "Risk Factors" in the Company's 10-KSB filed with the Securities and Exchange Commission on March 31, 1998 as well as those listed in the Company's other SEC filings.