Anika Therapeutics Reports Second Quarter Results.

WOBURN, Mass.--(BUSINESS WIRE)--July 22, 1999--

Anika Therapeutics, Inc. (Nasdaq: ANIK) today reported net income for the second quarter ended June 30, 1999 of $407,000, or $.04 per diluted share, compared with $2,201,000, or $.20 per diluted share, for the same period last year. Revenues for the second quarter were $3,750,000 versus $4,596,000 for the corresponding quarter in 1998. Included in revenues for the second quarter of 1998 was a $1,500,000 licensing payment from Zimmer, Inc. for expanded marketing and distribution rights to ORTHOVISC(R), Anika's treatment for osteoarthritis of the knee. Product revenue for the second quarter rose 21 percent to $3,750,000 from $3,096,000 for the second quarter of 1998.

For the six-months ended June 30, 1999 net income was $752,000, or $.07 per diluted share, compared with $2,838,000, or $.26 per diluted share, for the same period in 1998. Year-to-date revenues were $6,975,000 versus $7,350,000 for the first half of last year. Product revenue for the first six months of 1999 rose 19 percent to $6,975,000 from the prior year level of $5,850,000.

J. Melville Engle, chairman, president and chief executive officer, said the 21 percent increase in product revenue for the quarter was due to higher international sales of ORTHOVISC, which rose 76 percent from the previous year's quarter. "We saw a strong increase in ORTHOVISC sales for the quarter and are continuing to work closely with Zimmer on the rollout of ORTHOVISC in Europe," he said. Last month Anika announced it had further expanded its distribution agreement with Zimmer to encompass much of Eastern Europe, the Middle East and Africa.

"Our primary focus for the quarter has been on expediting enrollment of patients into the ORTHOVISC clinical trial, which commenced in late April," Engle said, noting that the company expects to complete enrollment of its target 350 patients at 23 clinical sites by the end of August. The company incurred approximately $500,000 in ORTHOVISC clinical trial expenses during the second quarter of 1999.

In other news concerning the company's product pipeline, Anika noted it has elected to suspend further development of HA oligosaccharides for the treatment of cancer. "Our senior team and scientific advisory board did a thorough evaluation of the program and we came to the conclusion that the projected development costs and time to market were too great to make strategic sense for Anika," Engle said.

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 (not for sale in U.S.), Anika currently markets HYVISC(R) in the U.S. for the treatment of equine osteoarthritis and manufactures AMVISC(R) and AMVISC(R) Along with, highly viscous HA products used as viscoelastic supplements 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(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, there can be no assurance that the expanded agreement with Zimmer will progress as planned, that the clinical trial can be completed in a timely manner or at all, or if completed, that the results of the trial will produce data supporting the efficacy of ORTHOVISC. Even if the Company is able to successfully complete the clinical trial and the results thereof support the efficacy 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 any delay in receiving any such approval will not adversely effect the Company's competitive position. 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-K filed with the Securities and Exchange Commission on March 31, 1999 as well as those listed in the Company's other SEC filings.

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Anika Therapeutics, Inc.
INCOME STATEMENTS  (Unaudited)


                         Three months ended        Six months ended
                                June 30,                June 30,
                           1999        1998         1999       1998


Product revenue        $ 3,750,275 $ 3,095,966 $ 6,974,853 $ 5,850,385
Licensing payments               -   1,500,000        --     1,500,000
         Total revenue   3,750,275   4,595,966   6,974,853   7,350,385
Cost of sales            1,896,633   1,564,569   3,604,804   2,908,041
         Gross profit    1,853,642   3,031,397   3,370,049   4,442,344

Operating expenses:
    Research and
     development           924,819     388,531   1,632,676     891,510
    Selling, general
     and administrative    807,220     704,228   1,562,171   1,240,214
       Total operating
         expenses        1,732,039   1,092,759   3,194,847   2,131,724
           Income from
            operations     121,603   1,938,638     175,202   2,310,620

Interest income, net       297,879     318,468     600,029     610,568

         Income before
          income taxes     419,482   2,257,106     775,231   2,921,188

Income taxes                12,584      55,651      23,584      82,727
         Net income    $   406,898 $ 2,201,455 $   751,647 $ 2,838,461


Basic earnings
 per share             $      0.04 $      0.22 $      0.08 $      0.29

Shares used for
 computing basic EPS     9,558,024   9,948,095   9,395,390   9,895,082


Diluted earnings
 per share             $      0.04 $      0.20 $      0.07 $      0.26

Shares used for
 computing diluted EPS  10,075,826  11,197,949  10,081,235  11,039,747


Anika Therapeutics, Inc.


Balance Sheets as of                        June 30,     December 31,
                                              1999            1998
                                           (Unaudited)
ASSETS

Current assets:
  Cash and cash equivalents              $  5,218,037    $ 10,712,520
  Short-term investments                   10,158,240      12,007,503
  Accounts receivable                       2,840,423       3,032,737
  Inventories                               4,018,018       3,522,019
  Prepaid expenses                            610,502         250,023

          Total current assets             22,845,220      29,524,802

Property and equipment                      7,157,431       6,376,405
Less accumulated depreciation               4,160,340       3,809,723
          Net property and equipment        2,997,091       2,566,682

  Long-term investments                     5,632,881            --
  Notes receivable from officers              252,000         193,000


  Long term deposits                          108,500         108,500
          Total Assets                   $ 31,835,692    $ 32,392,984


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                       $    815,914    $    891,493
  Accrued expenses                          1,418,954       1,356,586
  Deferred revenue                            200,000         200,000
          Total current liabilities         2,434,868       2,448,079

Advance rent payment                           22,707          50,215

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,
   respectively                                99,919          99,919
  Additional paid-in capital               31,986,825      34,439,676
  Deferred compensation                      (801,614)     (1,074,699)
  Treasury stock, (at cost) 204,707
   and 344,500 shares,
   respectively                              (978,247)     (1,889,794)
  Accumulated deficit                        (928,766)     (1,680,412)
          Total stockholders' equity       29,378,117      29,894,690
          Total Liabilities and
           Stockholders' Equity          $ 31,835,692    $ 32,392,984