Monday, January 5, 2015

Anika Therapheutics (NASDAQ: ANIK) the HA biopharmaceutical expert

If you are thinking of investing in a biopharmaceutical stock, Anika Therapheutics (NASDAQ: ANIK) might probably attract your attention.

With a market capital of above $570 million, Anika Therapeutics is considered as a small cap in USA stock markets. However, it is a fast growing one, who ranked No. 10 in Forbes' America's Best Small Companies (Under A Billion) 2014.


It also has strong balance sheet with growing cash and working capital while holding a debt free position.

Anika Therapeutics, headquartered in Bedford, Massachusetts, was founded in 1992 from a spin-off of MedChem's HA research division. It has over 20 years of experience in developing and manufacturing therapies for tissue protection, healing and repair.

Anika core expertise is synthetic manufacturing of hyaluronic acid (HA), which is a natural, organic chemical occurring, biocompatible polymer found throughout the body, produces to help protect joints like the knee. To date, Anika research team has come out with more than 400 scientific publications, and also more than 50 patents on native and chemically modified HA.

Anika’s broad strategy involves synthesizing HA and applying it in 3 key Orthobiologic areas: palliative, restorative and regenerative. Beside that, their products also has coverage in dermal, ophthalmic, surgical and veterinary.


Their Orthobiologics products consist of joint health and orthopedic products which are used in a wide range of treatments from providing relief from the pain of osteoarthritis, to regenerating damaged tissue such as cartilage defects.

Their Dermal products consist of advanced wound care products and aesthetic dermal fillers which are used for the treatment of skin wounds ranging from burns to diabetic ulcers.

Their Ophthalmic business includes HA viscoelastic products used in ophthalmic surgery.

Their Surgical business consists of products used to prevent surgical adhesions and to treat ear, nose and throat disorders.

Their Veterinary product is used for treatment of joint dysfunction in horses.


They have 2 manufacturing arms, one in the HQ in USA, and another Anika S.R.L. in Italy.


A large portion of its current revenue is generated from the Orthobiologics sector.


More than 5% of the world's population is afflicted by osteoarthritis (OA) of the knee, making it the most common joint disease. Approximately 10 million Americans currently suffer from OA of the knee, and the number is increasing year by year. Therefore, the market demand for viscosupplement products is hugh, and Anika's goal is to capture 15% of the overall market.

Osteoarthritis is a common chronic, degenerative joint disease, in which the cushioning tissue, or cartilage, in the knee joint wears away and the thick fluid that helps lubricate the knee joint becomes thinner and less effective. OA is characterized by pain, joint inflammation and joint stiffness, and results in a substantial degree of physical disability and poor quality of life.

Currently, there are a total of 5 companies offering less than 10 brands of products, competing in the viscosupplement space, and Anika is holding the 2nd place after Sanofi.


As you can see from the table above, the single injection products are quite competitive in terms of cost per treatment than the multiple injection. Patients will prefer the single injection treatment, and there are currently only 3 products in the market.

Note that HA viscosupplement  is a high entry barrier industry, which requires multiple years of research and development, and a long waiting period of obtaining necessary certifications before any new product being able to hit the market.

What make Anika's viscosupplement products stand out from competitors is that it is made through a patented process that uses a species of bacteria to make a hypo-allergenic viscosupplement, while others commonly make it using bird proteins, to which some people are allergic.

In the pipeline, Anika has completed the clinical trial for new product Cingal. Cingal basically is an enhanced version of Monovisc with a therapeutic agent, or steroid. It is designed to provide the advantages of Monovisc with the added early symptom relief benefits of a commonly used steroid. This new product will hit the market soon once it obtained the approval from CE, FDA, and other required authorities, and is anticipated to further boost the revenue growth of Anika.

If you are interested to read more about Anika, the Henry Fund report has a comprehensive coverage on this company. 

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in the stock market.

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