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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
Monovisc pending approval in
U.S.
Product
Revenue
Growth
1.
3.
2.
Breakeven for Anika S.r.l.
Earnings
Growth
Manufacturing facilities
consolidation
Growing demand for currently
marketed products
4.
Anika at a Glance
Products for tissue protection, healing, repair and regeneration
Leader
• Domain expertise in
hyaluronic acid technology
Market Leader
• Orthobiologics franchise driving growth
Up 26% 9Mo
• Eight consecutive years of profitability EPS up 86% 9Mo
• Healthy operating cash flow and strong cash position $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)
Ophthalmic, 17%
Surgical, 4%
Aesthetic, 1%
Orthobiologics,
65%ENT, 4%
Animal Health,
4%
Wound Care, 5%
Anika’s business is broadly diversified,
dominated by the Orthobiologics portfolio
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 Hyalobarrier
Hyalobarrier Endo
Merogel & other ENT products
Veterinary Hyvisc
Market Share Distribution Sales Growth
Grew to 12% of US market in 2010
Tracking higher in 2011
20% sales growth past four years
Strong demand in U.S. and globally
Distributed by DePuy Mitek to most physician specialties
Orthovisc® – Flagship Orthobiologics Product
20%
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
15 % up
Product Revenue Growth
Orthobiologics
Sales Orthobiologics Growth
28.2 $ 26
up
Orthobiologics Sales Driving Strong Growth
%
9 Month 2011 Results
million
Industrial Services
Oil & Gas Production Services
Regenerating Damaged Tissue
Protecting Damaged Tissue
Relieving Pain
Palliative Regenerative
HyaloGraft C/Hyalofast Orthovisc/Monovisc
Delivering on Our Vision
Restorative
Hyalonect/Hyaloglide/Hyalobarrier
Product Development Anika HA Technologies
Gel • Orthovisc
• Amvisc
• Hyvisc
Modified
Gels
• Monovisc
• Hyalobarrier
• Hyaloglide
• Elevess
Solids
• Granules • Hyalogran
• Sponge • Meropak
• Mesh/textiles • Hyalofll
• Hyalonect
Hyaluronic
Acid
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. W
ound c
om
ple
xity
# patients
Moist wound dressings
Antimicrobial dressings
Advanced therapies
Skin
substitute
• Hyalograft3D autograft
• Laserskin autograft
• Hyalomatrix
• Hyalofill
• Cronofill
Debridment agents • Jaloskin
• Hyalogran
Film dressings
Skin substitutes
Advanced therapies
Traditional Dressings
(Films,fleece,hydrogels)
Basic wound care
Tissue regeneration
Product Development Programs
• Monovisc-Knee
• Orthovisc-Shoulder
• Cingal-(HA plus drug)
• Hyalofast scaffold-Cartilage repair
Orthopedic
• Modified Elevess
• Aesthetic follow on products
• Wound care dressings (HA plus additives)
• Antioxidant,
Dermal
• Chondroitin based viscoelastic Ophthalmic
Financial Overview and
Operating Leverage Initiatives
Income Statement Highlights
• Revenues up due to
Orthobiologics and Surgical
franchise growth
• GM post 2009 reflects
addition of Anika S.r.l. products
and climbing back
• Operating expenses remain tightly
controlled
• 2011 estimated tax rate 38.0%
versus 41.2% in 2010
2009 2010 9 Mo.
2010
9 Mo.
2011
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
Net Income $3.7 $4.3 $3.0 $5.6
EPS (diluted) $0.32 $0.32 $0.22 $0.41
Top- and bottom-line trends remain favorable
(Dollars in millions, except per-share amounts) * Excluding cost of product revenue
Key Dynamics
Balance Sheet Highlights
• Total assets of $129.8 million
• Healthy cash flow from
operations -- $2.9 million in 9M
(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
Continued strong cash and working capital position
Key Dynamics
Key Business Targets
Focused on solid strategic execution over the long term
2009 2010 9 Mo.
2011
Target
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 FDA-inspected
• 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
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