Anika Therapeutics Reports Third Quarter Results.

Business Editors

WOBURN, Mass.--(BUSINESS WIRE)--Nov. 1, 2001

Anika Therapeutics, Inc. (Nasdaq:ANIK) today reported that revenue for the third quarter ended September 30, 2001 rose 12 percent to $3,054,000 from $2,730,000 for the same period last year. The company recorded a net loss for the quarter of $1,332,000, or $0.13 per share, versus a loss of $1,383,000, or $0.14 per share, for the third quarter of 2000.

Revenue for the nine months ended September 30, 2001 was $8,151,000 compared with $9,219,000 for the first nine months of 2000. Anika recorded a net loss for the first nine months of 2001 of $6,301,000, or $0.63 per share, compared with a net loss of $2,165,000, or $0.22 per share, for the same period last year. Results for the 2001 year-to-date period includes charges recorded in the second quarter totaling $1,401,000, or $0.14 on a per share basis, for costs associated with the settlement of a shareholder class-action lawsuit and a management restructuring.

Chief Executive Officer Douglas R. Potter said sales of the company's ophthalmic products for the quarter were strong compared with the third quarter of 2000, as well as the second quarter of 2001. Gross profit for the quarter was $500,000, or 16 percent of revenue, versus a loss of $74,000 for the prior year period. Included in the most recent quarter was a charge of $486,000 for underutilization of plant capacity compared with $1.1 million during the third quarter of 2000. Since mid 2000, Anika has been working to lower its work-in-process inventory. Cash and investments at the end of the quarter totaled $13,959,000.

"Our primary objectives at this point are achieving better financial performance from our core ophthalmic and osteoarthritis viscoelastic business and meeting the needs of key customers," Potter said. "We are also pursuing a clinical trial for ORTHOVISC(R), our product for osteoarthritis of the knees, with the aim of obtaining U.S. market approval, and are working to identify and screen potential new therapies based on our hyaluronic acid (HA) technology."

During the quarter, Anika signed a Latin America distribution and marketing agreement for an ophthalmic viscoelastic product with Miami-based A.M.A. Pharmaceuticals. Territories covered under the agreement include Argentina, Brazil, Colombia and Mexico. Mexico is the first market in which the company plans to seek regulatory approval.

On the clinical front, Potter said enrollment of patients for a 360-patient clinical trial for ORTHOVISC has recently accelerated, reflecting intensive efforts by the company and clinical sites. Patient enrollment is expected to continue into mid-2002.

Headquartered in Woburn, Mass., 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. It also produces STAARVISC(TM)-II for distribution by STAAR Surgical Company and Shellgel(TM) for Cytosol Ophthalmics, Inc.

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 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 "working,," "objectives," "pursuing," "aim," "potential," "will," "would," "expected," "intends," 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 is a risk that the Company will not: (i) successfully complete clinical trials of ORTHOVISC(R); (ii) obtain clinical data to support a pre-market approval application and/or FDA approval; and/or (iii) receive FDA or other regulatory approvals of ORTHOVISC(R) or that such approvals will not be obtained in a timely manner or without the need for additional clinical trials. Any delay in receiving any such approvals may adversely affect the Company's competitive position. Even if regulatory approvals are obtained, there is a risk that meaningful sales of the products may not be achieved. There can be no assurances that the Company's efforts to improve the financial performance of its core business will be successful or that new distribution agreements will result in meaningful sales of products. Furthermore, the Company can make no assurances that research and product development efforts will result in successful new products. 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 each of the Company's Annual Report on Form 10-K/A for the year ended December 31, 2000, and Quarterly Report on Form10-Q for the quarter ended June 30, 2001, as well as those described in the Company's press releases and other SEC filings.

Anika Therapeutics, Inc.
STATEMENTS OF OPERATIONS (Unaudited)

                           Three months ended       Nine months ended
                                 September 30,           September 30,
                             2001        2000        2001        2000
                      ----------- ----------- ----------- -----------


Product revenue        $3,045,779  $2,629,807  $8,143,431  $8,919,405
Licensing revenue           8,000     100,000       8,000     300,000
----------------------------------------------------------------------
    Total revenue       3,053,779   2,729,807   8,151,431   9,219,405
Cost of product revenue 2,553,582   2,804,285   6,631,579   6,459,870
----------------------------------------------------------------------
    Gross profit (loss)   500,197     (74,478)  1,519,852   2,759,535
Operating expenses:
 Research and development 826,378     516,171   3,095,573   2,737,136
 Selling, general
  and administrative    1,100,180   1,093,841   4,347,544   3,080,454
 Litigation settlement costs               --     950,716          --
----------------------------------------------------------------------
    Total operating
     expenses           1,926,558   1,610,012   8,393,833   5,817,590
----------------------------------------------------------------------
    Loss
     from operations   (1,426,361) (1,684,490) (6,873,981) (3,058,055)

 Interest and other
  income, net              94,324     301,666     573,105     892,665
----------------------------------------------------------------------
    Net loss          $(1,332,037)$(1,382,824)$(6,300,876)$(2,165,390)
======================================================================

Basic and diluted net loss
 per common share          $(0.13)     $(0.14)     $(0.63)     $(0.22)
                      =========== =========== =========== ===========
Shares used for computing
 basic and diluted net loss
  per common share      9,934,280   9,934,280   9,934,280   9,870,323
                      =========== =========== =========== ===========


Anika Therapeutics, Inc.
Balance Sheets (unaudited) as of,
                                               Sept. 30,      Dec. 31,
                                                   2001          2000
                                            -----------   -----------
ASSETS

Current assets:
 Cash and cash equivalents                  $10,001,142    $8,265,936
 Short term investments                       3,957,994    10,039,849
 Accounts receivable, net                     2,003,398     1,692,457
 Inventories                                  3,934,214     4,737,645
 Prepaid expenses and other current assets      365,086       612,890
                                            -----------   -----------
    Total current assets                     20,261,834    25,348,777
                                            -----------   -----------

Property and equipment, at cost               9,486,635     8,621,579
Less accumulated depreciation                (6,295,912)   (5,498,455)
                                            -----------   -----------
    Net property and equipment                3,190,723     3,123,124
                                            -----------   -----------

 Notes receivable from officers                 253,000       382,000
 Long term deposits                             118,660       124,600
                                            -----------   -----------
    Total assets                            $23,824,217   $28,978,501
                                            ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                              $881,100      $870,502
 Accrued expenses                             1,986,444     1,395,677
 Deferred revenue                               401,475            --
                                            -----------   -----------
    Total current liabilities                 3,269,019     2,266,179
                                            -----------   -----------

Stockholders' equity:
 Redeemable convertible preferred stock,
 $.01 par value: Authorized 750,000 shares,
 no shares issued and outstanding                    --            --

 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                  31,640,232    31,735,660
 Deferred compensation                           (5,369)     (244,549)
 Treasury stock (at cost), 57,663 shares       (279,756)     (279,756)
 Accumulated deficit                        (10,899,829)   (4,598,952)
                                            -----------   -----------
    Total stockholders' equity               20,555,198    26,712,322
                                            -----------   -----------
    Total liabilities
     and stockholders' equity               $23,824,217   $28,978,501
                                            ===========   ===========