Anika Therapeutics, Inc. (ANIK) Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue from continuing operations was $26.2M, down 10% y/y, with Commercial Channel up 18% and OEM Channel down 23% on U.S. pricing pressure for Monovisc/Orthovisc . Results missed S&P Global consensus: revenue $28.1M* and adjusted EPS -$0.06 vs $0.09*; bold miss driven by lower J&J end-user pricing and manufacturing yield issues.
• Guidance cut: FY25 OEM Channel revenue lowered to $62–$65M (from $64–$68.5M), and adjusted EBITDA margin reduced to -3% to +3% (from 8%–10%), citing pricing, first-half yields, Cingal study costs, and tariffs. Commercial Channel guidance maintained at $47–$49.5M .
• Integrity continued as a growth engine: >300 procedures for the second straight quarter; Regenerative Solutions +33% y/y; international OA Pain +13% y/y .
• Liquidity intact: $53.4M cash, no debt; $15M buyback completed in March .

What Went Well and What Went Wrong

What Went Well

• Integrity adoption and Regenerative Solutions momentum: “Integrity procedures grew for the fourth consecutive quarter... on pace to more than double procedures in 2025” and Regenerative Solutions +33% y/y .
  Quote: “We continue to see consistently strong growth within the Commercial Channel, up 18% in the quarter.”
• International OA Pain strength: +13% y/y on geographic expansion and share gains for Cingal/Orthovisc .
• Cost discipline: Operating expenses fell 12% y/y; adjusted EBITDA positive ($0.1M) despite pricing/yield headwinds .

What Went Wrong

• U.S. OA Pain pricing pressure: OEM revenue down 23% y/y; pricing volatility has not been fully offset despite partner actions .
• Manufacturing yields and scrap: Lower yields for Monovisc/Cingal from raw material supplier change; H1 gross margin expected ~53%, improving to ~58–59% in H2 .
• FY25 guidance cut: EBITDA margin lowered (to -3% to +3%) and OEM revenue range reduced due to pricing, yields, Cingal bioequivalence costs, and tariffs .

Financial Results

Items with * were retrieved from S&P Global.

Segment revenue breakdown:

Selected KPIs:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Sales in our OEM Channel did not meet expectations due to lower pricing of Monovisc and Orthovisc in the U.S… Nevertheless, Monovisc and Orthovisc continue to hold leading positions in the U.S. market.” — Cheryl Blanchard, CEO
• “Lower sales [to J&J] accounted for a 5-point reduction in Anika’s overall margin… we expect first half gross margins to be ~53%; second half ~58–59% as improvements materialize.” — Stephen Griffin, CFO/COO
• “We received formal written feedback from the FDA… confirming alignment on the bioequivalence bridging study design and the path to NDA filing [for Cingal].” — Cheryl Blanchard

Q&A Highlights

• Cingal bioequivalence study timing and cost: BE study expected to start by year-end; 2025 cost embedded in guidance (~0.5 point margin impact) .
• OEM sequential improvement drivers: primarily price rebound in Q2; full-year pricing still lower vs initial outlook .
• Integrity adoption dynamics: deeper usage among existing surgeons plus new surgeon adds; multiple training channels and early post-market data supporting uptake .
• Cingal distribution strategy: evaluating best pathway; potential structures (including upfront payments) considered, but regulatory certainty is key to value .
• Liquidity: ~$53M cash deemed sufficient to complete Hyalofast and Cingal regulatory processes; cash usage heaviest in Q1, improvement expected H2 .

Estimates Context

• Q1 2025 S&P Global consensus: revenue $28.07M*, adjusted/normalized EPS $0.09*, with limited coverage (Revenue estimates: 3; EPS estimates: 1)*. Actuals: revenue $26.17M and adjusted EPS -$0.06; both misses; bold negative surprise likely to drive estimate cuts in OEM pricing and FY25 EBITDA trajectory .
• Forward quarters show sparse coverage: Q3/Q4 2025 consensus Revenue $27.8M/$28.9M*, EPS $0.02/$0.02*, indicating low sell-side visibility and potential revisions post guidance cut.*

Items with * were retrieved from S&P Global.

Key Takeaways for Investors

• Near-term caution: Bold miss vs consensus on revenue and adjusted EPS, plus FY25 EBITDA guidance cut (to -3% to +3%), reflect U.S. OA pricing pressure and first-half manufacturing inefficiencies; expect margin improvement in H2 but OEM headwinds persist .
• Commercial Channel resilience: Integrity and international OA Pain continue to offset OEM softness; Integrity’s accelerating adoption and prospective study should support medium-term growth .
• Regulatory catalysts: Hyalofast on track for 2026 U.S. launch; Cingal BE study start by year-end with FDA alignment enhances NDA path—key medium-term valuation drivers .
• Cash runway adequate: $53.4M cash, no debt, and completed $15M buyback underpin ability to fund pipeline without raising capital near-term .
• Watch Q2/Q3 prints: monitor OEM pricing stabilization, yield normalization, and H2 gross margin recovery to ~58–59%; estimate resets likely post Q1 miss and guidance changes .
• Strategic focus: Completed divestitures streamline operations toward HA-based OA Pain and Regenerative Solutions; expect ongoing SG&A discipline and targeted R&D on Hyalofast/Cingal .
• Trading implications: Stock likely sensitive to updates on Cingal BE initiation/timing, Hyalofast PMA module filing, Integrity adoption metrics, and confirmation of OEM pricing stabilization trajectory (especially into 2026) .

Items with * were retrieved from S&P Global.