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Anika Soars on Strong Q2 Results

Zacks Equity Research

The share price of Anika Therapeutics, Inc. (ANIK) shot up 12.2% on Aug 2, 2013 to close the trading session at $27.28. The stock was buoyed by strong second quarter 2013 results, which included a positive earnings surprise of 21.21%.

This Zacks Rank #1 (Strong Buy) company has now delivered positive earnings surprises for three consecutive quarters. Anika also reached a 52-week high of $27.80 on Aug 2.

Anika reported earnings of 40 cents per share in the second quarter of 2013, ahead of the Zacks Consensus Estimate of 33 cents and the year-ago earnings of 26 cents per share. Earnings benefitted from higher revenues, which were up 6.1% to $20.8 million. Revenues also surpassed the Zacks Consensus Estimate of $16 million.

Anika’s second quarter total revenues primarily consisted of product revenues apart from licensing, milestone and contract revenues. The company’s net product revenues were up 6% to $20.1 million.

Product revenues in the reported quarter primarily benefitted from encouraging performance of the company’s Orthobiologics segment (up 51% to $16.5 million). The impressive performance was due to the strong sales of Anika’s viscosupplementation product, Orthovisc (up 49%). Orthovisc demand was high particularly in the U.S.

Growth was also witnessed in the Dermal (up 258% to $0.6 million) and Surgical (up 25% to $1.8 million) segments. Sales of Opthalmic (down 91% to $0.5 million) and Veterinary products (down 33% to $0.7 million) were, however, disappointing in the second quarter of 2013.

Management stated at the second quarter conference call that the company’s primary focus will now be on its viscosupplementation candidate, Cingal. The company initiated a phase III clinical study on Cingal during the second quarter of 2013.

The study will assess the candidate’s efficacy for symptomatic relief of joint pain in patients suffering from osteoarthritis of the knee and have not responded to conservative treatment. Anika expects operating expenses to increase during the second half of the year as the phase III study progresses.

Management nevertheless expects second half revenues to surpass the first half figure. We are encouraged by the second quarter results at Anika and expect it to continue performing well.

Apart from Anika, stocks such as Actelion Ltd. (ALIOF), Biogen Idec Inc. (BIIB) and Gilead Sciences Inc. (GILD) also carry a Zacks Rank #1.

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