Anika Therapeutics Reports Third Quarter Financial Results and Stock Repurchase Plan.WOBURN, Mass.--(BUSINESS WIRE)--Oct. 22, 1998--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 net income for the third quarter ended September 30, 1998 of $741,000, or $.07 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 a loss of $267,000, or $0.05 per diluted share, for the same period last year. Revenues for the third quarter of 1998 rose to $3,180,000 from $1,584,000 for the comparable period in 1997. Results for last year's third quarter reflected a temporary delay in product shipments caused by defective syringes supplied by a third-party vendor. The delay resulted in a backlog of approximately $1,000,000 which had the impact of reducing earnings for that quarter by $.08 on a diluted basis. For the first nine months of 1998, net income was $3,580,000, or $.32 per diluted share, versus $286,000, or $.02 per diluted share, for the corresponding period in 1997. Revenues for the year-to-date period increased 77 percent to $10,530,000 from $5,962,000 for the same period last year. Results for the current nine-month period include a licensing payment of $1.5 million from Zimmer, Inc., a subsidiary of Bristol-Myers Squibb Bristol-Myers Squibb (NYSE: BMY), colloquially referred to as BMS, is a pharmaceutical corporation, formed by a 1989 merger between pharmaceutical companies Bristol-Myers Company, founded in 1887 by William McLaren Bristol and John Ripley Myers in Clinton, NY (both were , Inc. during the second quarter. "We are pleased with our strong financial results for the quarter," said J. Melville Engle, president and chief executive officer. "Sales of AMVISC(R) products to Bausch & Lomb Surgical remain strong and international ORTHOVISC sales continue to grow. We look forward to further commercialization of ORTHOVISC internationally and Zimmer's upcoming launch in Europe." Additionally, the company announced that its board of directors has approved a stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. under which the company is authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: to purchase up to $4,000,000 of Anika stock, with the total number of shares purchased not to exceed 9.9 percent of the total issued and outstanding shares. Under the plan, shares may be repurchased from time to time and in such amounts as market conditions warrant and subject to regulatory considerations. "We believe that the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of Anika shares is an excellent use of the company's cash given Anika's current stock valuation," Engle said. ORTHOVISC is currently being sold in Canada, Spain and Turkey and has received the CE Mark facilitating sale throughout the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community . Anika has a marketing and distribution agreement with Zimmer, potentially worth up to $26.5 million in licensing payments in addition to revenues from product sales. Anika has granted Zimmer ORTHOVISC distribution rights in the U.S., Canada, most of Europe, select Asia-Pacific markets and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . To date, the company has received $4.5 million in licensing payments from Zimmer. ORTHOVISC is distributed in Spain and Portugal through Grupo Ferrer Internacional, S.A. Anika develops, manufactures and commercializes therapeutic products and devices intended to promote the 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, bio-compatible polymer found throughout the body. Anika's currently marketed products consist of ORTHOVISC for the treatment of 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. in humans and HYVISC(R) 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. Anika also manufactures AMVISC and AMVISC Plus, HA products used as 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" supplements in 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 Surgical. Therapies currently under development include INCERT(R), an HA product 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. and HA oligosaccharides oligosaccharides (ol´igōsak´  rīdz),n. for the treatment of cancer. Anika is also collaborating with Orquest, Inc. to manufacture OSSIGEL(tm), 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. The statements made in this press release which are not historical facts 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 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 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. 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 Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. . 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. -0-
ANIKA THERAPEUTICS, INC.
Balance Sheets as of, Sept. 31, 1998 Dec. 31, 1997
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $12,675,504 $22,679,820
Short term investments 11,519,904 -
Accounts receivable 2,278,835 1,918,293
Inventories 3,275,274 2,541,552
Prepaid expenses 349,198 610,364
Total current assets 30,098,715 27,750,029
Property and equipment 6,104,053 4,138,365
Less accumulated depreciation 3,684,062 3,325,321
Net property and equipment 2,419,991 813,044
Loan receivable due from officer 134,000 75,000
Long term deposits 178,400 111,265
Total Assets $32,831,106 $28,749,338
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 724,571 $ 967,986
Accrued expenses 1,029,770 1,253,154
Deferred revenue 200,000 200,000
Total current liabilities 1,954,341 2,421,140
Advance rent payment 63,704 103,912
Deferred revenue
Stockholders' equity:
Undesignated preferred stock,
$.01 par value: authorized
1,250,000 shares; no shares issued
and outstanding - -
Common stock, $.01 par value:
authorized 15,000,000
shares; issued and outstanding
9,964,256 shares and
9,691,091 shares, respectively 99,642 96,911
Additional paid-in capital 34,490,237 32,156,504
Unearned stock option compensation (1,327,203) -
Accumulated deficit (2,449,615) (6,029,129)
Total stockholders' equity 30,813,061 26,224,286
Total Liabilities and
Stockholders' Equity $32,831,106 $28,749,338
ANIKA THERAPEUTICS, INC.
STATEMENTS OF OPERATIONS (Unaudited)
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
Product revenue $3,179,901 $1,534,301 $9,030,286 $5,811,723
Licensing payments 0 50,000 1,500,000 150,000
Total revenue 3,179,901 1,584,301 10,530,286 5,961,723
Cost of sales 1,425,270 808,741 4,333,311 3,015,952
Gross profit 1,754,631 775,560 6,196,975 2,945,771
Operating expenses:
Research and
development 492,935 644,836 1,384,445 1,477,093
Selling, general and
administrative 869,228 441,313 2,109,442 1,271,733
Total operating
expenses 1,362,163 1,086,149 3,493,887 2,748,826
Income (loss)
from operations 392,468 (310,589) 2,703,088 196,945
Interest income, net 367,586 45,428 978,154 105,230
Income (loss)
before income taxes 760,054 (265,161) 3,681,242 302,175
Income taxes 19,001 2,335 101,728 16,259
Net income (loss) $741,053 ($267,496) $3,579,514 $285,916
Basic earnings (loss)
per share $0.07 ($0.05) $0.36 $0.04
Shares used for
computing
basic EPS 9,960,502 5,079,464 9,931,313 5,058,337
Diluted earnings
(loss) per share $0.07 ($0.05)(a) $0.32 $0.02
Shares used for
computing
diluted EPS 11,316,539 7,579,765 11,153,554 7,376,029
(a) Calculation results in antidiluted earnings per share, as
such, presentation on statement of operations reverts back to
basic.
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