Anika reports fiscal year-end and fourth quarter financial results.

WOBURN, Mass.--(BUSINESS WIRE)--Oct. 30, 1996--Anika Research Inc. (Nasdaq Small Cap:ANIK) today reported financial results for its fiscal year and fourth quarter ended Aug. 31, 1996.

For the fiscal year, Anika reported net sales of $4,613,000, a 37 percent increase from net sales of $3,356,000 in fiscal 1995. The company posted a net loss of $2,849,000, or $.70 per share, on 26 percent more shares outstanding, compared with a net loss of $1,955,000, or $.61 per share, last year.

For the fourth quarter ended Aug. 31, 1996, net sales were $1,270,000, a 55 percent increase from net sales of $820,000 in the comparable period last year. The net loss amounted to $914,000, or $.19 per share, up from $868,000, or $.27 per share, for the fourth quarter of 1995. In the fourth quarter, Anika had 48 percent more shares outstanding than in the comparable period in 1995.

J. Melville Engle, president and chief executive officer, said the loss for fiscal year 1996 was planned and in line with expectations. He stated that the higher operating expenses reflected the company's continued investment in research and development and increased selling, general and administration expenses.

"We made progress this year on several fronts setting a strong foundation for Anika's move from a research organization to one that is more market driven," Engle said. "In 1996, we applied for and received Commumautee European (CE) mark registration approval to market our ORTHOVISC product throughout most of the European Community nations as well as countries that recognize EC device registration.

"Combined with previously received marketing approvals in Canada, Holland and Turkey, we are now forging ahead with the introduction of ORTHOVISC in these markets. In the U.S., we continued to enroll patients for our pivotal Phase III clinical trials for ORTHOVISC and expect to have completed these studies and submitted a PMA for market clearance within the next year," Engle added.

"For our AMVISC products, we will continue our longstanding supply contract with Chiron Vision and implement ways in the year ahead to maximize the value of this product," Engle said. "Finally, we strengthened our balance sheet with the completion of a $4.0 million private placement in early 1996."

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 and temporomandibular joint (TMJ) dysfunction; 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.

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ANIKA RESEARCH INC.

Balance Sheets as of,             Aug. 31, 1996       Aug. 31, 1995

ASSETS

Current assets:
 Cash and cash equivalents          $3,651,023          $2,824,663
 Accounts receivable                   631,916             190,976
 Inventories                         2,514,280           3,292,416
 Prepaid expenses                      502,207             318,960
   Total current assets              7,299,426           6,627,015

 Property and equipment              4,745,923           4,332,171
 Less accumulated depreciation       3,465,175           2,912,966
   Net property and equipment        1,280,748           1,419,205

   Total Assets                     $8,580,174          $8,046,220


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                    $645,484            $353,444
  Accrued expenses                     995,832             301,507
  Current portion of long-term debt         --           1,000,000
     Total current liabilities       1,641,316           1,654,951

Other long-term liabilities                 --             520,757
Long-term debt                              --                  --

Redeemable convertible preferred
 stock; $.01 par value: authorized
 750,000 shares; issued and
 outstanding 126,259 and 120,970
 shares, respectively; liquidation and
 redemption value of $20.00 per share
 plus accrued dividends              2,523,483           2,326,171

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 4,840,726
  shares and 3,291,475 shares,
  respectively                          48,407              32,915
 Additional paid-in capital         11,551,685           7,378,514
 Unearned stock option compensation   (468,750)                 --
 Accumulated deficit                (6,715,967)         (3,867,088)
   Total stockholders' equity        4,415,375           3,544,341

   Total liabilities and
    stockholders' equity            $8,580,174          $8,046,220

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ANIKA RESEARCH INC.
STATEMENTS OF OPERATIONS

                        Three months ended        Twelve months ended
                             Aug. 31,                   Aug. 31,
                        1996         1995          1996        1995
                     (Unaudited)  (Unaudited)

Net sales            $1,270,246    $819,855    $4,612,917   $3,355,797
Cost of sales         1,167,412   1,087,283     4,472,214    3,118,163
   Gross profit (loss)  102,834    (267,428)      140,703      237,634

Operating expenses:
 Research and
  development           477,211     372,753     1,634,641    1,317,666
 Selling, general and
  administrative        590,976     245,337     1,469,256      904,223
 Interest expense
  (income), net         (51,035)    (17,983)     (114,313)     (29,749)
   Total operating
    expenses          1,017,152     600,107     2,989,584    2,192,140

   Loss before
    income tax
    benefit            (914,318)   (867,535)   (2,848,881)  (1,954,506)

Income taxes                 --          --            --           --
   Net loss           ($914,318)  ($867,535)  ($2,848,881) ($1,954,506)

Loss per share, primary
 and fully diluted       ($0.19)      ($.27)       ($0.70)       ($.61)

Primary and fully
 diluted shares
 outstanding          4,830,482   3,267,449     4,052,596    3,225,205

CONTACT: Anika Research Inc.

Mel Engle or Sean Moran, 617/932-6616

or

Pondel Parsons & Wilkinson

Susan Klein, 508/358-4315

Robert Whetstone, 310/207-9300