Anika Therapeutics reports results for four-month transition period.

WOBURN, Mass.--(BUSINESS WIRE)--Feb. 4, 1997--Anika Therapeutics Inc. (NASDAQ Small Cap: ANIK) today reported results for the four-month transition period ended Dec. 31, 1996 reflecting the recent change in the company's fiscal year end from Aug. 31 to Dec. 31.

For the four months ended Dec. 31, 1996, Anika reported net sales of $1,212,000 vs. $1,191,000 in the comparable period for the prior year. The company posted a net loss of $2,658,000, or $.54 per share, on 49 percent more shares outstanding, compared with a net loss of $907,000, or $.28 per share, for the same period last year.

J. Melville Engle, president and chief executive officer, said the loss for the four months ended Dec. 31, 1996 was expected and reflected certain one-time writeoffs, continued investment in the clinical development of ORTHOVISC and increased selling, general and administrative expenses.

"Our Phase III clinical trial for ORTHOVISC is going extremely well, with 200 patients participating at 10 centers throughout the U.S.," Engle said. "We are also pleased with the sales from our renewed AMVISC supply contract with Chiron Vision, a division of Chiron Corporation, and expect these sales to make a strong contribution to our financial results for the first quarter of 1997. The new five-year contract with Chiron Vision that commenced on January 1, 1997 calls for significantly higher unit prices than the old contract."

According to Engle, the increase in operating expenses for the transition period was primarily due to the following factors: $600,000 in expenses from the ORTHOVISC clinical trial, $375,000 from the writeoff of unearned compensation, $544,000 from the writeoff of leasehold improvements and lease expenses resulting from closing one of the company's facilities, and $200,000 in severance costs associated with the departure of a company president.

Anika is a leading developer and manufacturer of technologically advanced hyaluronic acid products for surgical and therapeutic medical applications. The company's commercial products include: ORTHOVISC for the treatment of osteoarthritis, AMVISC to maintain eye shape and protect delicate tissues during ophthalmic surgery, and HYVISC for the treatment of equine osteoarthritis. Products under development include: INCERT for the prevention of surgical adhesions and HA oligosaccharides for the treatment of cancer.

ANIKA RESEARCH INC.

Balance sheets as of,             DEC. 31, 1996       Aug. 31, 1996
                                   (Unaudited)

ASSETS

Current assets:
 Cash and cash equivalents          $2,704,665          $3,651,023
 Accounts receivable                   539,004             631,916
 Inventories                         2,481,646           2,514,280
 Prepaid expenses                      375,302             502,207
   Total current assets              6,100,617           7,299,426

 Property and equipment              3,865,330           4,745,923
 Less accumulated depreciation       3,046,286           3,465,175
   Net property and equipment          819,044           1,280,748

   Total Assets                     $6,919,661          $8,580,174

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                    $550,314            $645,484
  Accrued expenses                   1,055,234             595,832
  Deferred revenue                     200,000             200,000
     Total current liabilities       1,805,548           1,441,316

Other long-term liabilities            142,775             200,000

Redeemable convertible preferred
 stock; $.01 par value: authorized
 750,000 shares; issued and outstanding
 126,259 shares, respectively;
 liquidation and redemption value
 of $20.00 per share plus accrued
 dividends                           2,602,527           2,523,483

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 4,930,719
  shares and 4,840,726 shares,
  respectively                          49,307              48,407
 Additional paid-in capital         11,693,070          11,551,685
 Unearned stock option compensation          -            (468,750)
 Accumulated deficit                (9,373,566)         (6,715,967)
   Total stockholders' equity        2,368,811           4,415,375

   Total liabilities and
    stockholders' equity            $6,919,661          $8,580,174

    -0-

ANIKA RESEARCH INC.
STATEMENTS OF OPERATIONS (UNAUDITED)

                                             Four months ended
                                                  Dec. 31,
                                          1996                1995

Net sales                           $1,212,041          $1,191,215
Cost of sales                        1,308,625           1,263,249
     Gross loss                        (96,584)            (72,034)

Operating expenses:
  Research and development           1,310,330             456,315
  Selling, general and
   administrative                    1,308,583             384,215
  Interest income                      (57,898)             (5,303)
     Total operating expenses        2,561,015             835,227

     Loss before income taxes       (2,657,599)           (907,261)

Income taxes                                 -                   -
     Net loss                      ($2,657,599)          ($907,261)

Loss per share                          ($0.54)             ($0.28)

Primary and fully diluted shares
 outstanding                         4,905,382           3,294,312

CONTACTS: Anika Therapeutics Inc.

Sean Moran, 617-932-6616

or

Pondel Parsons & Wilkinson

Susan Klein, 508-358-4315

Robert Whetstone, 310-207-9300