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Anika Therapeutics, Inc. (ANIK)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue from continuing operations was $30.6M, up 1% YoY and above consensus; adjusted EPS from continuing operations was $(0.03), missing consensus, as product mix and one-time legacy program costs compressed margins .
  • Commercial Channel revenue grew 25% YoY on continued Integrity Implant System adoption (>40% sequential growth; >300 surgeries in quarter; >1,000 cumulative), and strong International OA Pain Management (+22% in Q4) .
  • OEM Channel revenue declined 8% YoY, reflecting U.S. OA Pain pressures at J&J MedTech; management lowered 2025 adjusted EBITDA margin guidance to 8–10% from “low double-digit” on lower end-user pricing forecasts from J&J .
  • Strategic portfolio refocus advanced: Parcus sale closed (March 7, 2025), $15M buyback completed ahead of schedule, and Hyalofast/Cingal regulatory milestones positioned for 2026+ catalysts; cash ended at $55.6M, no debt .

What Went Well and What Went Wrong

What Went Well

  • Integrity momentum: “greater than 40% sequential growth” for the third straight quarter; >300 surgeries in Q4; >1,000 globally since launch; captured >1% of 2024 U.S. soft tissue augmentation procedures .
  • International OA Pain strength: +22% in Q4, +16% FY as teams drove geographic expansion and market share gains across Cingal, Monovisc, and Orthovisc .
  • Pipeline/regulatory execution: second PMA module filed for Hyalofast; Type-C FDA meeting held for Cingal (bioequivalence design), first patient enrolled in Integrity prospective study; Hyalofast MDR approval referenced on call .

What Went Wrong

  • Margin pressure: GAAP gross margin fell to 56% (adjusted 58%) vs 69% last year due to one-time legacy program expenses and product mix; adjusted EBITDA fell to $3.6M (–44% YoY) .
  • OEM/U.S. OA Pain headwinds: OEM revenue –8% in Q4 with lower volumes and competitive pricing at J&J; 2025 OEM revenue expected toward lower end of $64–$68.5M (–12% to –18%) .
  • Earnings miss vs EPS consensus: adjusted EPS $(0.03) vs consensus $0.09; continuing ops net loss $(2.5)M .

Financial Results

Summary vs Prior Year and Prior Quarter

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$30.175 $38.753 $30.602
Diluted EPS – Continuing Ops ($)$(0.16) $(2.03) $(0.17)
Adjusted Diluted EPS – Continuing Ops ($)$0.07 $(0.25) $(0.03)
Adjusted Gross Margin (%)69% 65% 58%
Adjusted EBITDA ($USD Millions)$6.369 $5.431 $3.586

Segment/Channel Breakdown (Q4 2024)

ChannelRevenue ($USD Millions)Mix (%)
OEM Channel$19.669 64%
Commercial Channel$10.933 36%
Total$30.602 100%

KPIs and Cash

KPIQ4 2024Notes
Integrity surgeries>300 Third straight quarter >40% sequential growth
Integrity cumulative cases>1,000 since launch Broader surgeon adoption
International OA Pain growth+22% QoQ +16% FY 2024
Operating cash flow$1.6M Working capital improvements in 2H
Cash & Equivalents$55.6M No debt
Share repurchase$5.6M in Q4; $15M completed Mar 2025 Ahead of schedule

Results vs Wall Street Consensus (S&P Global)

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)$29.0M*$30.602M Beat*
Primary EPS ($)$0.09*$(0.03) Miss*
Coverage (# of estimates)Revenue: 2*; EPS: 1*—Low coverage*

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Commercial Channel RevenueFY 2025+12% to +18% growth $47–$49.5M (+12% to +18%) Maintained
OEM Channel RevenueFY 2025(12%) to (18%) decline $64–$68.5M; “towards lower end” Tilted lower end
Adjusted EBITDA MarginFY 2025“Low double digits” 8–10% Lowered
Long-term Commercial GrowthFY 2026–2027+20% to +30% annually Reiterated (incl. Hyalofast modest 4Q26 contribution) Maintained
Dividends/OpEx/OI&E/Tax RateFY 2025Not providedNot providedN/A

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Integrity adoptionLimited release; >300 cases; +40% seq growth; clinical studies planned >40% seq growth; ~200 Q3 cases; >500 cumulative; platform line extensions planned Third straight quarter >40% seq growth; >300 Q4 surgeries; >1% market share; broader surgeon base Accelerating
International OA Pain17% YTD growth; new countries, share gains +7% Q3; +14% YTD; strong Monovisc/Cingal +22% in Q4; +16% FY Strong/steady
U.S. OA Pain (J&J)Softer pricing; leadership maintained Lower volumes/pricing pressure; stabilization expected 2026 OEM down 8%; 2025 OEM toward lower end on pricing reset Reset lower near term
Hyalofast timelineFirst PMA module to be filed by YE; 2026 U.S. launch target First PMA module filed; final clinical module in 2025; 2026 launch Second PMA module filed; MDR approval referenced; 3rd module 2H25; 2026 launch On track
Cingal U.S. pathOngoing FDA dialogue; nonclinical requirements being clarified Aristospan NDA acquired; toxicity testing to start Q1’25; Type-C for bioequivalence protocol Type-C meeting held; final toxicology started; awaiting formal FDA feedback Progressing
Capital allocationCost actions; $40M buyback announced $5.3M repurchased; restructuring; divestitures announced $5.6M Q4 repurchase; $15M completed; Parcus sale closed Executing

Management Commentary

  • “We delivered on our guidance for revenue and profit… our Commercial Channel [has been] growing 17% per year over the past three years.” — Cheryl Blanchard, President & CEO .
  • “Hyalofast… second PMA module filed… on track to file the third and final clinical module in the second half of 2025, with a U.S. launch anticipated by 2026.” — Cheryl Blanchard .
  • “Integrity sales grew by more than 40% sequentially for the third straight quarter… captured more than 1% of the domestic rotator cuff augmentation market in 2024.” — Steve Griffin, CFO .
  • “Based on J&J’s new pricing, we expect adjusted EBITDA for 2025 to be between 8% and 10%.” — Steve Griffin .

Q&A Highlights

  • SG&A run-rate: ~$11–12M is a reasonable proxy post-divestitures; aim to stay lean .
  • R&D cadence: Hyalofast filing fee ~$0.6M; R&D trending higher in 2025 with Integrity clinical and Cingal toxicity studies included .
  • Cingal spend/timing: Toxicology costs built into 2025; awaiting formal FDA feedback on bioequivalence; expect update next quarter .
  • Integrity adoption breadth: Broader surgeon base beyond early adopters; strong AAOS interest and booth traffic .
  • Long-term growth: Commercial channel acceleration to +20–30% in 2026–27 driven by Hyalofast introduction; Integrity remains near-term growth driver .

Estimates Context

  • Q4 2024 vs consensus: Revenue beat ($30.6M vs $29.0M*), while adjusted EPS missed ($(0.03) vs $0.09*); limited coverage (Revenue: 2 estimates*, EPS: 1*). Management’s narrative implies the revenue beat was driven by Commercial Channel strength and International OA Pain, while the EPS miss reflected mix and one-time legacy costs compressing margins .
  • FY 2024: Adjusted EPS $0.16 exceeded consensus $0.10*, but weaker OEM trends and margin compression temper 2025 profitability outlook .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Trade the beat/miss mix; revenue strength with Integrity/International OA Pain contrasts with EPS miss on margin compression; watch for J&J pricing updates and margin stabilization as a stock reaction driver .
  • 2025 reset: Expect OEM revenue at lower end and adjusted EBITDA margin 8–10% (lowered), reflecting U.S. OA Pain royalties tied to J&J pricing; near-term valuation should reflect this reset .
  • Execution catalysts: Integrity (>40% sequential growth) and platform line extensions support Commercial Channel expansion; monitor prospective study enrollment and EU MDR pathway .
  • Regulatory milestones: Hyalofast PMA sequencing on track (3rd module 2H25; 2026 launch), Cingal advancing with toxicology and bioequivalence protocol; each is a medium-term value unlock .
  • Balance sheet/capital returns: $55.6M cash, no debt, $15M repurchase completed early; capacity to fund pipeline without capital raise supports downside protection .
  • Portfolio focus: Completed Parcus sale; discontinued operations cleansed; refocus on HA-based OA Pain and Regenerative Solutions should improve growth quality and strategic clarity .
  • Estimate revisions: Expect modest upward revenue revisions for Commercial Channel and potential downward EPS revisions near term given margin guide; coverage thin, so single-estimate swings can create volatility*.

Values marked with * retrieved from S&P Global.