- Voluntary recall of three Hyalo products negatively impacted results by approximately $2 million. These products accounted for only 3% of FY:17 revenues and ANIK expects to resume shipments during 2018.
- YOY revenue decline of 9% primarily due to soft Orthovisc sales and pricing, as the market continues to transition from multi-injection to single-injection solutions.
- Monovisc revenues improved 29% YOY and ANIK began shipments to Australia and India during the quarter.
- Cingal (Monovisc + steroid) delivered 280% YOY growth as the product continues to gain traction in Europe and Canada.
- ANIK completed six-month follow-ups of patients in the Phase III Cingal clinical trial and is enrolling patients for a three-month extension study. A nine-month efficacy claim could be a potential game-changer for Cingal in the OA market.
- In anticipation of Cingal’s US launch, ANIK is ramping up investments in SG&A this year.
- Flat FY:18 revenues and higher expenses are likely to result in YOY EPS declines. However, we think EPS will rebound in FY:19 as Cingal sales commence in the US.
- We think the market over-reacted to the voluntary recall and believe the current price represents an attractive entry point. Central to our investment thesis is US approval of Cingal, which remains on-track for FY:19 and represents a $1 billion market opportunity. As a result, we maintain our Buy rating and $60 price target.