Anika Therapeutics, Inc. Q1 FY2025 earnings call

• The commercial channel showed strong performance with an 18% year-over-year growth, driven by continued gains in the international OA pain management business and accelerated growth of Integrity. • Cost saving measures led to operating expenses being down 12% year-over-year. • Integrity achieved sequential growth for the fourth consecutive quarter, with more than 300 surgeries performed and a 33% year-over-year growth in the regenerative solutions portfolio globally. • Advanced Hyalofast by filing the second PMA module in January and being on track for the third module filing in the second half of 2025. • Achieved a milestone for Cingal with formal written feedback on the bioequivalence bridging study design and access to the material required for the study. • Faced manufacturing challenges with lower yields in the production of Monovisc and Cingal, but implemented manufacturing enhancements that are showing positive results.

Overall revenue in the first quarter was $26.2 million. The commercial channel revenue was $11.3 million, up 18% year-over-year, accounting for approximately 43.1% of the total revenue. Within the commercial channel, international OA pain management sales were up 13% year-over-year, and regenerative solutions grew 33% year-over-year. The OEM channel revenue was $14.9 million, down 23% in the first quarter, mainly due to lower U.S. sales from J&J MedTech because of weaker end user pricing. Non-orthopedic revenue also declined during the quarter due to the timing of customer orders.

• For the full year 2025, the commercial channel is expected to generate between $47 million and $49.5 million in revenue, representing a 12% to 18% growth. • The OEM channel revenue guidance is revised to be in the range of $62 million to $65 million, which is a 16% to 20% decline compared to 2024. • The adjusted EBITDA guidance is revised to a range of negative 3% to positive 3%, which is affected by lower manufacturing yields, J&J pricing, tariff rates on imported raw materials, and the costs associated with the Cingal bioequivalence study.

• Ongoing pricing challenges in the domestic OA Pain Market. • Short-term supply production yield issues with Monovisc and Cingal. • Uncertainties in the regulatory and clinical trial progress for Hyalofast and Cingal. • Impact of competitive dynamics on pricing and market share.

Q: Could you elaborate on the timeline and investment needed for the Cingal bioequivalence study and when to expect the NDA filing?

A: Cheryl Blanchard said they expect to start the bioequivalence study by the end of the year and Steve Griffin mentioned about a half a point of expenses related to the study.

Q: On the OEM guidance, what drives the sequential growth?

A: Steve Griffin said sequential growth from the second quarter versus the first quarter is primarily driven by price, with early indications of pricing rebound in the second quarter but lower pricing for the full year.

Q: On the commercial revenue guidance, what drove the decision?

A: Cheryl Blanchard said the excitement about Integrity's overachievement and continued growth in the international pain business led to maintaining the guidance.

Q: Timing of the final Hyalofast module filing?

A: Cheryl Blanchard said they plan to file the third module by the end of 2025 and expect updates by the next earnings call.

Q: OA pain U.S. pricing deterioration and visibility on the pricing bottom?

A: Steve Griffin said they speak with J&J regularly and expect stabilization in pricing in 2026 with a lower price point exiting 2025.

Q: Integrity growth details and how to get surgeons to try the product?

A: Cheryl Blanchard said Integrity had over 300 surgeries in the quarter and is on track to double procedures in 2025, with an integrated sales approach including data, training, industry events, and distributor meetings.

Q: Distribution plans for Cingal?

A: Cheryl Blanchard said they have been exploring distribution opportunities for Cingal with more to come as it's a different therapy setting.

Q: Cash position and sufficiency for the regulatory process?

A: Steve Griffin said they have sufficient cash to get through the regulatory filings for Hyalofast and Cingal, with $53 million in cash at the end of the first quarter and expected improvements in the second half.