Anika Srl

Anika Therapeutics, Inc.
Cannacord Genuity
Musculoskeletal Conference
February 7, 2012
Safe Harbor Statement
The statements made in this presentation 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 “potential,”
“develop,” “promising,” “believe,” “will,” “would,” “expect,” “anticipate,” “intend,” “estimate,”
“plan, “likely,” and other expressions which are predictions of or indicate future events and
trends and which do not constitute historical matters identify forward-looking statements,
including without limitation management’s discussion of the company’s growth and
strategic plans. 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 including the results of its research and development
efforts and timing of regulatory approvals. 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 “Management's
Discussion and Analysis of Financial Condition and Results of Operations” in the
Company's Annual Report on Form 10-K for the year ended December 31, 2010 and the
Company’s Quarterly Reports on Form 10-Q, as well as those described in the Company's
other press releases and SEC filings.
The Anika Story
Four near-term investment catalysts
1.
Growing demand for currently
marketed products
2.
Monovisc pending approval in
U.S.
3.
Manufacturing facilities
consolidation
Product
Revenue
Growth
Earnings
Growth
4.
Breakeven for Anika S.r.l.
Anika at a Glance
Products for tissue protection, healing, repair and regeneration
• Domain expertise in
hyaluronic acid technology
• Orthobiologics franchise
driving growth
• Eight consecutive years of
profitability
• Healthy operating cash flow
and strong cash position
Market Leader
Leader
Up 26% 9Mo
EPS up 86% 9Mo
$29M at 9/30/11
Current Business Highlights
• Strong top-line growth and successful Anika S.r.l. integration
• Strong and expanding demand for Orthovisc® in U.S. and
international markets (up 19%)
• Monovisc® performing well in Europe; optimistic for U.S. approval;
DePuy Mitek selected as distribution partner
• Anika S.r.l. positioned to be breakeven in Q4 2011; S.r.l. products
gaining traction in U.S., Europe and Asia (up 22%)
• Expect to complete Bedford manufacturing consolidation in 2012
achieve significant cost reduction
Anika Business by Segment (2011)
Anika’s business is broadly diversified,
dominated by the Orthobiologics portfolio
Ophthalmic, 17%
Wound Care, 5%
Orthobiologics,
65%
Animal Health,
4%
ENT, 4%
Surgical, 4%
Aesthetic, 1%
Product Portfolio
S.r.l. products significantly expand Anika’s portfolio and pipeline
Anika, Inc.
Anika S.r.l.
Orthobiologics
Orthovisc
Orthovisc Mini
Monovisc
Hyalograft C Autograft
Hyalofast
Hyalonect
Hyaloss
Hyaloglide
Dermal
Hydrelle
Elevess
Hyalograft 3D Laserskin
Hyalomatrix
Hyalogran
Hyalofill
Jaloskin
Ophthalmic
Anikavisc, Anikavisc Plus
Amvisc, Amvisc Plus
Staarvisc-II
Shellgel
Surgical
Incert-S
Veterinary
Hyvisc
Hyalobarrier
Hyalobarrier Endo
Merogel & other ENT products
Orthovisc® – Flagship Orthobiologics Product
Market Share
Sales Growth
Distribution
20%
 Grew to 12% of US
 20% sales growth
market in 2010
 Tracking higher in
2011
past four years
 Strong demand in
U.S. and globally
 Distributed by
DePuy Mitek to
most physician
specialties
New Opportunity: Single-Injection Monovisc®
Performing well in Europe
Distributed in 18 countries
Ongoing dialogue with FDA on
PMA application
DePuy Mitek recently selected as partner
for U.S.
$783M U.S. Viscosupplementation market in 2012;
$915M in Japan, Europe & ROW
Single injection represents 40% of
U.S. market
Orthobiologics Sales Driving Strong Growth
9 Month 2011 Results
Product Revenue Growth
Orthobiologics Growth
Orthobiologics
Sales
up
up
million
15
%
%
26
$
28.2
Delivering on Our Vision
Palliative
Restorative
Oil & Gas
Production
Services
Relieving Pain
Regenerative
Protecting
Industrial
Damaged
Services
Tissue
Regenerating
Damaged
Tissue
Hyalonect/Hyaloglide/Hyalobarrier
Orthovisc/Monovisc
HyaloGraft C/Hyalofast
Product Development
Anika HA Technologies
Gel
Hyaluronic
Acid
• Orthovisc
• Amvisc
• Hyvisc
Modified
Gels
•
•
•
•
Monovisc
Hyalobarrier
Hyaloglide
Elevess
• Granules
• Hyalogran
• Sponge
Solids
• Meropak
• Mesh/textiles
• Hyalofll
• Hyalonect
Hyalograft C: Cartilage Regeneration Product
First bioengineered cartilage regeneration product for minimally
invasive surgery – adding new EU and ROW distributors
Global Market over $100M
Day 0
Cartilage
biopsy
In vitro
chondrocyte
culture
Day 14
Seeding on
HA matrix
Day 28
Cartilage
formation
Day 30
Grafting on
patient
Advanced Wound Care Portfolio
Commercialized in Europe, Middle East, Korea, U.S.
Wound complexity
Tissue
regeneration
• Hyalograft3D autograft
Skin substitutes
Skin
substitute
Advanced therapies
• Laserskin autograft
• Hyalomatrix
• Hyalofill
• Cronofill
Advanced therapies
Antimicrobial dressings
Basic
wound
care
Debridment agents
Traditional Dressings
Moist wound dressings
(Films,fleece,hydrogels)
Film dressings
# patients
• Jaloskin
• Hyalogran
Product Development Programs
Orthopedic
Dermal
Ophthalmic
•
•
•
•
Monovisc-Knee
Orthovisc-Shoulder
Cingal-(HA plus drug)
Hyalofast scaffold-Cartilage repair
• Modified Elevess
• Aesthetic follow on products
• Wound care dressings (HA plus additives)
• Antioxidant,
• Chondroitin based viscoelastic
Financial Overview and
Operating Leverage Initiatives
Income Statement Highlights
Top- and bottom-line trends remain favorable
2009
2010
9 Mo.
2010
9 Mo.
2011
Key Dynamics
Total Revenue
$40.1
$55.6
$40.8
$46.3
Product Gross
Margin
63%
55%
56%
56%
Operating
Expenses*
$20.9
$24.2
$18.7
$17.6
Operating
Income
$5.6
$7.5
$5.1
$9.1
• Operating expenses remain tightly
controlled
Net Income
$3.7
$4.3
$3.0
$5.6
• 2011 estimated tax rate 38.0%
versus 41.2% in 2010
EPS (diluted)
$0.32
$0.32
$0.22
$0.41
• Revenues up due to
Orthobiologics and Surgical
franchise growth
• GM post 2009 reflects
addition of Anika S.r.l. products
and climbing back
(Dollars in millions, except per-share amounts) * Excluding cost of product revenue
Balance Sheet Highlights
Continued strong cash and working capital position
(In millions)
12/31/09
12/31/10
9/30/11
Cash & Cash
Equivalents
$24.4
$28.2
$29.0
Net Working
Capital
$33.3
$37.0
$43.5
Net Property
& Equipment
$35.7
$37.0
$36.7
Long-Term
Debt
$12.8
$11.2
$10.0
Stockholders’
Equity
$82.1
$85.2
$92.8
Key Dynamics
• Total assets of $129.8 million
• Healthy cash flow from
operations -- $2.9 million in 9M
Key Business Targets
Focused on solid strategic execution over the long term
2009 2010
9 Mo. Target
2011 3-5 Years
Product
Revenue –
Organic
Growth
13%
18%
15%
>20%
Product Gross
Margin
63%
55%
56%
>60%
SG&A
26%
31%
28%
20–30%
R&D
20%
12%
10%
10–15%
Operating
Margin
14%
14%
19%
>20%
Successful Integration of Anika S.r.l.
Reduced Anika S.r.l. operating loss and positioned the business to
be breakeven in Q4 2011
Revenue growth
(+19%)
• Hyalobarrier surgical
products shipping in
Korea and Taiwan
• Advanced wound care:
international distribution
& U.S. launch
• Tissue engineered
orthopedic products:
seek increased EU/ROW
penetration
Cost reduction
synergies
• SG&A
• R&D
• Manufacturing
Manufacturing Efficiency Initiatives
Consolidating and improving quality across all of Anika’s operation
Consolidating GMP
Manufacturing in
Bedford, MA USA
• CE-Mark approval
received for all
products
• FDA-validated for
cross-linked
product line
• Aseptic products
validated and FDAinspected
• Awaiting FDA
approval in Q1
2012
Totally Revamped
Anika’s Quality
Organization
• Enhanced
manufacturing
quality
• Achieved
exemplary level of
FDA compliance
S.r.l. Product
Manufacturing in
Bedford
• Products made by
S.r.l.’s former
parent
• Targeting
significant cost
savings
Anika Outlook
Strongly positioned for profitable growth
• Growing demand for currently commercialized
products
• Potential FDA approval of Monovisc
• Anika S.r.l – approaching breakeven; products
gaining traction in U.S., Europe and Korea
• Expect to complete Bedford manufacturing
consolidation in Q1 2012
• Capitalizing on technology assets with new product
introductions
Thank You