11-MAY-18 – Anika Therapeutics (ANIK:BUY) Sales of Monovisc and Cingal drive revenues. Q1:18 top-line negatively impacted by voluntary recall of HYAFF-related products and soft Orthovisc sales. Anticipated FY:19 US launch of Cingal is a game-changer that may drive several years of revenue gains. We maintain our Buy rating and $60 price target.


  • 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.

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