Financial Data and Key Metrics Changes - Overall revenue in Q4 was $30.6 million, up 1% compared to the same period in 2023. For the full year, revenue was $119.9 million, a slight decrease of 1% compared to 2023 [8][27] - Gross margin for the fourth quarter was 56%, down 13 points from last year. Adjusted gross margin was 58%, down 11 points versus last year [22] - Adjusted EBITDA from continuing operations was $3.6 million, down 44% compared to 2023 [23][29] - Total adjusted EBITDA for the company was in line with previously provided guidance, totaling $15.5 million for the full year [29] Business Line Data and Key Metrics Changes - Commercial channel revenue was up 25% in Q4 and 17% for the full year, while OEM channel revenue decreased by 8% for both the quarter and the full year [8][27] - Integrity sales grew by more than 40% sequentially for the third straight quarter, with over 1,000 surgeries performed globally since its launch [9][20] - Regenerative solutions in the commercial channel grew 32% year over year, contributing to future growth [20] Market Data and Key Metrics Changes - International OA pain management growth was 22% in Q4 and 16% for the full year, driven by geographic expansion and market share gains [8][27] - MONOVISC and ORTHOVISC remain market leaders in the U.S., despite competitive pricing pressures [21] Company Strategy and Development Direction - The company divested ArthroSURFACE and Parkus Medical to focus on core products with the best value-building opportunities [7] - The strategic focus is on expanding the Integrity implant system and advancing the HYALOFAST and CINGAL products [7][36] - The company aims to grow international OA pain products and Integrity domestically while seeking regulatory approvals for new products [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's improved growth profile and solid financial structure, indicating no need for additional capital raising [37] - The company anticipates a challenging year for the OEM channel in 2025 but expects stability in pricing and market share in the following years [31][32] Other Important Information - The company generated $1.6 million in operating cash flow in Q4, down from $3.6 million last year, but improved cash flow management in the second half of 2024 led to $6.6 million in operating cash flow [25][30] - The company completed a $15 million share repurchase plan earlier than expected and ended Q4 with $56 million in cash and no debt [26] Q&A Session Summary Question: What were the one-time legacy program expenses referred to? - Management indicated that these were related to legacy product lines that will not continue, amounting to between $1 million and $2 million [40][41] Question: Is the SG&A of around $11 million to $12 million a good proxy for 2025? - Management confirmed that this is a good approximation for future SG&A expenses, reflecting the company's focus on hyaluronic acid [42] Question: What was the magnitude of the R&D charges for Hyalofast? - The one-time filing fee for Hyalofast was about $600,000, which is not expected to recur [43] Question: Will there be major R&D expenses for CINGAL in 2025? - Management stated that the bulk of the expenses for CINGAL are already accounted for, with ongoing work related to FDA feedback [46][48] Question: What is the expected growth driver for the commercial channel in the coming years? - The primary growth driver is expected to be the Integrity product, along with continued growth in international OA pain management [55][56]

Revenue Performance - Anika reported fourth quarter revenue from continuing operations of $30.6 million, a 1% increase compared to the same period in 2023[2]. - Full year 2024 total revenue from continuing operations was $119.9 million, a decrease of 1% relative to full-year 2023[3]. - Commercial Channel revenue increased by 17% year-over-year, while OEM Channel revenue decreased by 8% for the full year 2024[3]. - Revenue for Q4 2024 was $30,602 million, a 1.4% increase from $30,175 million in Q4 2023[29]. - For the three months ended December 31, 2024, total revenue was $30,602 million, a slight increase from $30,175 million in the same period of 2023[43]. - For the year ended December 31, 2024, total revenue was $119,907 million, slightly decreasing from $120,792 million in 2023[43]. Profitability and Margins - Adjusted EBITDA for the full year 2024 was $15.5 million, with an adjusted gross margin of 64%[10]. - Gross profit decreased to $17,125 million in Q4 2024, down 17.5% from $20,672 million in Q4 2023[29]. - Adjusted EBITDA for Q4 2024 was $3,586 million, down from $6,369 million in Q4 2023[36]. - The company reported an unadjusted gross margin of 56% for Q4 2024, down from 69% in Q4 2023[34]. - Gross profit for the year ended December 31, 2024, was $75,998 million, down from $82,532 million in 2023[43]. - Gross margin for the year ended December 31, 2024, was 63%, compared to 68% in 2023[43]. Expenses and Losses - Total operating expenses for Q4 2024 were $17,831 million, a decrease of 6.5% compared to $19,074 million in Q4 2023[29]. - Net loss for Q4 2024 was $21,865 million, significantly improved from a net loss of $63,000 million in Q4 2023[29]. - Adjusted net loss from continuing operations for Q4 2024 was $(332) million, compared to an adjusted net income of $980 million in Q4 2023[38]. Cash and Assets - Anika maintained a strong financial position with $55.6 million in cash and no debt at the end of the fourth quarter[10]. - Cash and cash equivalents decreased to $55,629 million in 2024 from $68,740 million in 2023[31]. - Total assets decreased to $202,740 million in 2024 from $270,632 million in 2023[32]. - Retained earnings dropped to $71,667 million in 2024 from $128,052 million in 2023[32]. Channel Performance - OEM Channel revenue for the three months ended December 31, 2024, was $19,669 million, accounting for 64% of total revenue, compared to 71% in the same period of 2023[43]. - Commercial Channel revenue increased to $10,933 million for the three months ended December 31, 2024, representing 36% of total revenue, up from 29% in the same period of 2023[43]. - The OEM Channel contributed $77,770 million for the year ended December 31, 2024, representing 65% of total revenue, down from 70% in 2023[43]. - The Commercial Channel generated $42,137 million for the year ended December 31, 2024, which is 35% of total revenue, an increase from 30% in 2023[43]. Growth and Strategic Initiatives - The Integrity Implant System achieved greater than 40% sequential growth for the third consecutive quarter, with over 1,000 surgeries performed globally since its launch[5]. - International OA Pain Management grew by 22% in the fourth quarter and 16% for the full year 2024, driven by geographic expansion and market share gains[5]. - Anika achieved significant regulatory milestones for Hyalofast, with a US launch anticipated by 2026[6]. - The company completed the strategic sale of Parcus Medical to focus on core HA products, enhancing resource allocation for growth opportunities[14]. - The company expects 2025 revenue guidance for the Commercial Channel to be between $47 million and $49.5 million, representing a 12% to 18% increase[13]. - The company is focusing on improving gross margins and exploring new market opportunities to enhance overall performance[43].

Core Insights - Anika Therapeutics reported financial results for the fourth quarter and full year 2024, achieving revenue in line with guidance, with a notable 17% increase in Commercial Channel revenue compared to 2023 [1][3][4]. Financial Performance - Fourth quarter revenue from continuing operations was $30.6 million, a 1% increase from the same period in 2023, with Commercial Channel revenue up 25% driven by the Integrity Implant System and International OA Pain Management [2][3]. - For the full year 2024, total revenue from continuing operations was $119.9 million, a decrease of 1% compared to 2023, while Commercial Channel revenue increased by 17% [3][4]. - OEM Channel revenue decreased by 8% for both the fourth quarter and the full year, consistent with company guidance [2][3]. Product and Market Developments - The Integrity Implant System achieved over 40% sequential growth for three consecutive quarters, with more than 300 surgeries performed in the fourth quarter, totaling over 1,000 globally since its launch [5][6]. - International OA Pain Management grew by 22% in the fourth quarter and 16% for the full year, attributed to geographic expansion and market share gains [5]. - Anika's Monovisc and Orthovisc products continue to lead the US viscosupplement market, with efforts to maintain pricing and market leadership [2]. Strategic Initiatives - The company completed the strategic sale of Parcus Medical to refocus resources on higher return programs [1][14]. - Significant regulatory and clinical milestones were achieved for key pipeline programs, including Hyalofast and Cingal, with plans for further clinical studies and regulatory filings [6][7][8]. Financial Position - By the end of the fourth quarter, Anika had a cash balance of $56 million and no debt, indicating a strong financial position [10]. - The company repurchased $5.6 million in common stock under its stock repurchase plan, completing an initial $15 million plan ahead of schedule [9][10].

Core Insights - Anika Therapeutics has completed the divestiture of its Parcus Medical business to Medacta Group SA, marking a significant step in its strategic review process [1][3] - The company aims to concentrate on its core hyaluronic acid technology and expand its Regenerative Solutions portfolio following the sale [2][3] Company Overview - Anika Therapeutics, Inc. is a leader in Osteoarthritis Pain Management and Regenerative Solutions, focusing on early intervention orthopedics [5] - The company specializes in minimally invasive products that leverage hyaluronic acid and implant solutions to enhance active living for patients globally [5] Transaction Details - The sale of Parcus Medical was finalized on March 7, 2025, for an undisclosed amount, with cash consideration received at closing [3] - Anika and Medacta have agreed to collaborate for a smooth transition post-sale for all stakeholders involved [3][4]

Core Viewpoint - Anika Therapeutics, Inc. will release its fourth quarter and year-end 2024 financial results on March 12, 2025, followed by an investor conference call to discuss these results and business highlights [1]. Company Overview - Anika Therapeutics, Inc. is a global joint preservation company focused on early intervention orthopedic care, utilizing expertise in hyaluronic acid and implant solutions [3]. - The company aims to provide minimally invasive products that enhance active living, particularly in high opportunity areas such as Osteoarthritis Pain Management and Regenerative Solutions [3]. - Anika's operations are headquartered outside of Boston, Massachusetts, and its products are delivered efficiently in key care sites, including ambulatory surgery centers [3]. Conference Call Details - The investor conference call can be accessed via a toll-free domestic number or an international number, with a specific conference ID provided for participants [2]. - A live audio webcast and presentation materials will be available on Anika's Investor Relations website, and the call will be archived for later access [2].

Company Overview - Anika Therapeutics, Inc. is a global joint preservation company focused on early intervention orthopedic care [3] - The company specializes in hyaluronic acid and implant solutions, aiming to provide minimally invasive products for active living [3] - Anika's operations are headquartered outside of Boston, Massachusetts, and it targets high opportunity areas within orthopedics, such as Osteoarthritis Pain Management and Regenerative Solutions [3] Upcoming Event - Dr. Cheryl Blanchard, President and CEO of Anika, will present at the Canaccord Genuity 2025 Musculoskeletal Conference on March 10, 2025 [1] - The presentation will be available via live webcast and archived for 30 days on Anika's website [2] - Management will also engage in one-on-one investor meetings during the conference [1]

Company Overview - Anika Therapeutics, Inc. is a global joint preservation company focused on early intervention orthopedics, specializing in advancements in orthopedic care [3] - The company leverages expertise in hyaluronic acid and implant solutions to provide minimally invasive products aimed at restoring active living [3] - Anika's operations are headquartered outside of Boston, Massachusetts, and the company targets high opportunity areas within orthopedics, including Osteoarthritis Pain Management and Regenerative Solutions [3] Upcoming Event - Dr. Cheryl Blanchard, President and CEO of Anika, will present at the 43rd Annual J.P. Morgan Healthcare Conference on January 16, 2025, at 9:45am PT / 12:45pm ET [1] - Management will also engage in one-on-one investor meetings during the event [1] - The presentation will be available via live webcast and archived for 30 days on Anika's website [2]

Core Viewpoint - Anika Therapeutics, Inc. is actively engaging with investors through participation in multiple upcoming conferences, showcasing its commitment to transparency and investor relations [1][2][3][4]. Group 1: Upcoming Conferences - Anika Therapeutics will present at the 36th Annual Piper Sandler Healthcare Conference in New York on December 3rd, with Dr. Cheryl Blanchard and Steve Griffin scheduled to present at 10:30am ET [2]. - The company will also participate in the Sidoti Small-Cap Virtual Conference on December 5th, where Steve Griffin is set to present at 10:45am ET [3]. - On December 11th, Anika will take part in The Benchmark Company 13th Annual Discovery One-on-One Investor Conference in New York, with both Dr. Cheryl Blanchard and Steve Griffin involved in one-on-one investor meetings [4]. Group 2: Company Overview - Anika Therapeutics is a global joint preservation company focused on early intervention orthopedic care, leveraging expertise in hyaluronic acid and implant solutions [5]. - The company aims to provide minimally invasive products for Osteoarthritis Pain Management and Regenerative Solutions, targeting high opportunity spaces within orthopedics [5]. - Anika's global operations are headquartered outside of Boston, Massachusetts, emphasizing its strategic location for healthcare innovation [5].

Revenue Performance - Revenue for Q3 2024 was $38.75 million, a decrease of 7% compared to $41.47 million in Q3 2023[82] - Revenue for the first nine months of 2024 was $121.20 million, down 2% from $123.69 million in the same period of 2023[82] - Revenue from the OA Pain Management product family decreased by 2% for both Q3 and the first nine months of 2024 compared to the same periods in 2023[84] - Revenue from the Joint Preservation and Restoration product family decreased by 11% in Q3 2024 and by 1% in the first nine months of 2024 compared to the same periods in 2023[85] - Revenue from the Non-Orthopedic product family decreased by 24% and 11% for the three- and nine-month periods ended September 30, 2024, compared to the same periods in 2023[86] Profitability and Loss - Gross profit for Q3 2024 was $1.44 million, a significant decline of 94% from $24.94 million in Q3 2023, resulting in a gross margin of only 4%[82] - Gross profit for the three-month period ended September 30, 2024 decreased by $23.5 million to $1.4 million, and for the nine-month period, it decreased by $23.3 million to $53.4 million[87] - Gross margin for the three- and nine-month periods ended September 30, 2024 was 4% and 44%, respectively, down from 60% and 62% in the same periods of 2023[88] - Net loss for Q3 2024 was $29.92 million, a 355% increase from a net loss of $6.58 million in Q3 2023[82] - Net loss for the three- and nine-month periods ended September 30, 2024 was $29.9 million and $34.5 million, respectively, compared to a net loss of $6.6 million and $19.7 million in the same periods of 2023[94] - Adjusted net loss for the three months ended September 30, 2024, was $3.8 million, a decrease of $7.1 million compared to the same period in 2023[110] Expenses - Operating expenses for Q3 2024 totaled $29.46 million, a decrease of 10% compared to $32.62 million in Q3 2023[82] - Research and development expenses for the three- and nine-month periods ended September 30, 2024 were $7.2 million and $22.8 million, respectively, down from $7.8 million and $25.1 million in the same periods of 2023[89] - Selling, general and administrative expenses for the three- and nine-month periods ended September 30, 2024 were $19.1 million and $60.4 million, respectively, compared to $24.8 million and $75.5 million in the same periods of 2023[91] - A non-cash impairment charge of $3.1 million was recorded in the three-month period ended September 30, 2024, due to the decline in fair value of the Arthrosurface reporting unit[92] Cash Flow and Financial Position - Cash and cash equivalents were $62.4 million as of September 30, 2024, down from $72.9 million at December 31, 2023[113] - Cash provided by operating activities was $3.8 million for the nine-month period ended September 30, 2024, compared to cash used of $5.4 million in the same period in 2023[116] - Cash used in investing activities increased to $7.0 million for the nine months ended September 30, 2024, from $3.6 million in the same period in 2023[117] - Cash used in financing activities was $7.4 million for the nine months ended September 30, 2024, compared to $6.7 million in the same period in 2023[118] - The company has a credit facility of up to $150.0 million, with no outstanding borrowings as of September 30, 2024[114] Strategic Initiatives - The company completed the sale of Arthrosurface for a non-interest bearing promissory note of $7.0 million and potential future revenue payments based on sales performance[77] - The company plans to divest the Parcus Medical business to focus on core HA technology and regenerative solutions[78] - The company is actively engaging with the FDA for regulatory approval of Cingal, a next-generation OA pain management product[79] Adjusted Metrics - Adjusted gross profit for the three- and nine-month periods ended September 30, 2024 decreased to $25.0 million and $77.8 million, respectively, with adjusted gross margins of 65% and 64%[102] - Adjusted EBITDA for the three-month period ended September 30, 2024 increased by $0.7 million compared to the same period in 2023, while for the nine-month period, it increased by $4.5 million[105] - Adjusted diluted EPS for the nine months ended September 30, 2024, decreased by $0.38 to $(0.01) compared to $0.37 in the same period in 2023[112] Accounting Policies - There have been no significant changes to critical accounting policies or estimates since the last annual report[119] - The decrease in adjusted net income was primarily due to lower revenues from strategic ordering patterns with higher margin customers[111] Future Outlook - The company expects cash requirements to increase as operations expand, but believes current cash flows and resources are sufficient for ongoing investments[113]

Financial Data and Key Metrics Changes - Anika generated total revenue of $38.8 million in Q3 2024, a decrease of $2.7 million from the same period in 2023, primarily due to lower revenue from JNJ Medtech and softness in the Arthrosurface and Sports Medicine businesses [42][43] - Gross margin for the quarter was 4%, down from 60% last year, mainly due to a $23 million impairment from the Arthrosurface transaction [46] - Adjusted net loss was $3.8 million in the quarter, down from an adjusted net income of $3.3 million, primarily due to lower revenue and certain tax items [49] - The company ended Q3 2024 with $62.4 million in cash and no debt [51] Business Line Data and Key Metrics Changes - Revenue in the OA Pain Management segment decreased 2% to $24.4 million, primarily due to lower U.S. sales from JNJ [43] - Revenue from Joint Preservation and Restoration, including Arthrosurface and Parcus Medical, decreased 11% to $12 million, while Regenerative Solutions, including Integrity, grew 17% year-over-year [45] - Non-orthopedic revenue declined 24% to $2.4 million, aligning with prior guidance due to lower sales of mature products [46] Market Data and Key Metrics Changes - International OA Pain sales grew by 7%, with year-to-date international sales up 14%, indicating market share gains through geographic expansion [44] - The U.S. tendon augmentation market, where Integrity competes, is estimated to be over $220 million annually and grew about 13% in Q2 2024 [21] Company Strategy and Development Direction - Anika announced a renewed focus on differentiated HA-based products targeting the $4 billion market for OA pain management and Regenerative Solutions [8] - The company plans to reclassify revenue to provide clearer visibility into value drivers, separating revenue into commercial and OEM channels starting Q4 2024 [15][40] - A workforce reduction from approximately 325 to about 225 is expected to align with the updated strategic focus [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the competitive and price-sensitive market but emphasized that their products still hold a market-leading position in the U.S. [37] - The company expects to deliver 16% growth at the midpoint of their guidance for 2024, driven by investments in HA-focused products [17] - Future guidance includes double-digit revenue growth in the commercial channel, with expectations of 12% to 18% growth in 2025 and 20% to 30% in 2026 and 2027 [55][60] Other Important Information - Anika signed and closed the sale of Arthrosurface for an estimated $10 million, with a planned divestiture of Parcus Medical [38] - The company recorded a one-time noncash impairment of Arthrosurface assets for approximately $27 million [39] - Adjusted EBITDA for Q3 was $5.4 million, up $700,000 from the prior year, as cost savings from restructuring efforts offset lower revenue [49] Q&A Session Summary Question: Will non-orthopedic revenue now be part of the commercial channel going forward? - No, it will be part of the OEM channel, similar to the JNJ relationship [67] Question: Can you provide guidance on gross margins in 2025? - It is too early to provide specific guidance as the company is still working on separating out the Arthrosurface and Parcus [68] Question: Will investments in the sales force for the commercial channel start right away? - Investments have already been made, focusing on direct sales reps, and will continue as new products are launched [69] Question: What will be the primary products in the commercial channel? - The primary products will include Monovisc, Orthovisc, Cingal, Hyalofast, and Integrity [72] Question: What is the expected revenue associated with the divested Arthrosurface business? - The revenue is around $25 million annually [74] Question: What is the global headcount reduction? - The reduction is from 325 to 225, including the impacts of Arthrosurface and Parcus [80]