Anika Therapeutics, Inc.

Previous wording

Our OA Pain Management product family consists of Monovisc and Orthovisc, our injectable, HA-based OA pain management offerings that are indicated to provide pain relief from osteoarthritis conditions; and Cingal, our novel, single-injection OA Pain Management product consisting of our proprietary cross-linked HA material combined with a fast-acting steroid. Cingal is our next generation fast-acting, long-lasting, non-opioid, clinically proven osteoarthritis pain product which is designed to provide both short- and long-term pain relief through at least six months. It is currently sold outside the United States in over 35 countries. In 2022, we completed a third Phase III clinical trial for Cingal, which achieved its primary endpoint. Cingal is not currently approved for commercial use in the United States. We have been actively engaging with the U.S. Food and Drug Administration, or the FDA, on next steps for U.S. regulatory approval.

Current wording

Cingal is our next generation fast-acting, long-lasting, non-opioid, clinically proven osteoarthritis pain product which is designed to provide both short- and long-term pain relief through at least six months. It is currently sold outside the United States in over 50 countries. In 2022, we completed a third Phase III clinical trial for Cingal, which achieved its primary endpoint. Cingal is not currently approved for commercial use in the United States. We have been actively engaging with the U.S. Food and Drug Administration, or the FDA, on next steps for U.S. regulatory approval.

Previous wording

In early 2023, we completed enrollment of 200 patients in our U.S. pivotal FastTRACK Phase III clinical trial evaluating Hyalofast, a single-stage, hyaluronic acid scaffold for cartilage repair. This clinical trial had a two-year follow-up protocol. We are using a modular Premarket Approval (“PMA”) filing process for our regulatory submission to the FDA for approval of Hyalofast in the U.S. We have filed the first two modules with the FDA and were awaiting clinical data to submit the final module to the FDA. In July 2025, we received topline results from the study and Hyalofast did not achieve significance on its pre-specified co-primary endpoints for pain and function. Although the study did not meet its co-primary endpoints, Hyalofast demonstrated consistent improvements over microfracture across all measures of pain and function, including statistically significant outcomes on key secondary endpoints such as Knee Injury and Osteoarthritis Outcomes Score (“KOOS”) Sports and Recreation Function and Quality of Life and other measures including Total KOOS. The study was likely impacted by both a higher subject dropout rate in the microfracture arm and missed visits due to COVID. Based on the strength and consistency of the overall data and the positive real-world clinical experience including data from multiple independent studies outside the U.S. over the past 15 years, we plan to submit the final PMA module to the FDA in the second half of 2025.

Current wording

In early 2023, we completed enrollment of 200 patients in our U.S. pivotal FastTRACK Phase III clinical trial evaluating Hyalofast, a single-stage, hyaluronic acid-based scaffold for cartilage repair. This clinical trial had a two-year follow-up protocol. We are using a modular Premarket Approval, or PMA, filing process for our regulatory submission to the FDA for approval of Hyalofast in the U.S. We filed the first two modules with the FDA. In July 2025, we received topline results from the study and Hyalofast did not achieve significance on its pre-specified co-primary endpoints for pain and function. Although the study did not meet its co-primary endpoints, Hyalofast demonstrated consistent improvements over microfracture across all measures of pain and function, including statistically significant outcomes on key secondary endpoints such as Knee Injury and Osteoarthritis Outcomes Score, or KOOS, Sports and Recreation Function and Quality of Life and other measures including Total KOOS. The statistical analysis was impacted by both a disproportionately higher subject dropout rate in the microfracture arm and missed visits due to COVID. Based on the strength and consistency of the overall data and the positive real-world clinical experience including data from multiple independent studies outside the U.S. over the past 15 years, we submitted the final PMA module to the FDA on October 31, 2025.

Previous wording

Three and Six Months Ended June 30, 2025 Compared to Three and Six Months Ended June 30, 2024

Current wording

Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024

Previous wording

During the year ended December 31, 2024, we changed our classification of revenue. We previously disclosed revenue in three categories: OA Pain Management, Joint Preservation and Restoration and Non-Orthopedic. As a result of a change in strategic focus announced by us in 2024, revenue classification was delineated to provide a clear view to our value drivers. Revenue has been split between the Commercial Channel and the Original Equipment Manufacturer (“OEM”) Channel. In the Commercial Channel, we have full responsibility for sales, marketing, and pricing of products through our commercial leaders, direct sales representatives, and independent distributors. Revenue from our Regenerative Solutions and international OA Pain Management businesses is included in the Commercial Channel. In the OEM Channel, we are responsible for development and manufacturing of products sold to our OEM partners governed by long-term agreements, but we do not control sales, marketing, or pricing with end users. Revenue from our U.S. OA Pain Management business and the Non-Orthopedic business is now included in the OEM Channel. All other revenue is reported in the Commercial Channel.

Current wording

During the year ended December 31, 2024, we changed our classification of revenue. We previously disclosed revenue in three categories: OA Pain Management, Joint Preservation and Restoration and Non-Orthopedic. As a result of a change in strategic focus announced by us in 2024, revenue classification was delineated to provide a clear view to our value drivers. Revenue has been split between the Commercial Channel and the Original Equipment Manufacturer, or OEM, Channel. In the Commercial Channel, we have full responsibility for sales, marketing, and pricing of products through our commercial leaders, direct sales representatives, and independent distributors. Revenue from our Regenerative Solutions and international OA Pain Management businesses is included in the Commercial Channel. In the OEM Channel, we are responsible for development and manufacturing of products sold to our OEM partners governed by long-term agreements, but we do not control sales, marketing, or pricing with end users. Revenue from our U.S. OA Pain Management business and the Non-Orthopedic business is now included in the OEM Channel. All other revenue is reported in the Commercial Channel.

Previous wording

The following table presents revenue by product family for the three and six-month periods ended June 30, 2025 and 2024:

Current wording

The following table presents revenue by product family for the three and nine-month periods ended September 30, 2025 and 2024:

Previous wording

Revenue for the three- and six- month periods ended June 30, 2025 were $28.2 million and $54.4 million, respectively. Revenue decreased $2.5 million and $5.4 million, or 8% and 9%, for the three- and six- month periods ended June 30, 2025 compared to the same period in 2024, respectively. The decrease in revenue was driven by lower sales activity with our OEM Channel partners, primarily J&J MedTech.

Current wording

Revenue for the three- and nine- month periods ended September 30, 2025 were $27.8 million and $82.2 million, respectively. Revenue decreased $1.7 million and $7.1 million, or 6% and 8%, for the three- and nine- month periods ended September 30, 2025 compared to the same period in 2024, respectively. The decrease in revenue was driven by lower pricing with our OEM Channel partners, primarily J&J MedTech.

Previous wording

Revenue from our OEM Channel product family decreased by 13% and 18% for the three- and six-month periods ended June 30, 2025, as compared to the same period in 2024. For the three-month period ended June 30, 2025, the $2.5 million decrease was primarily driven by a $3.0 million decrease in J&J MedTech revenue, attributable to lower sales volumes of $1.9 million and lower pricing which contributed $1.1 million of the decrease. This was offset somewhat by higher non-orthopedic product revenue of $0.5 million due to higher veterinary product sales. For the six-month period ended June 30, 2025, OEM Channel revenue decreased due to a $7.1 million reduction in J&J MedTech revenue, attributable to lower sales volumes of $2.9 million and lower pricing which contributed $4.2 million of the decrease. There was no change in non-orthopedic revenue for the six-month period ended June 30, 2025 with prior year.

Current wording

Revenue from our OEM Channel product family decreased by 20% and 19% for the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same period in 2024. For the three-month period ended September 30, 2025, the $3.9 million decrease was primarily driven by a $3.2 million decrease in J&J MedTech revenue which was all attributable to lower pricing. There was also a $0.7 million decrease in non-orthopedic product revenue due to lower volume of veterinary product sales. For the nine-month period ended September 30, 2025, the $11.0 million decrease in our OEM Channel revenue was primarily due to a $10.4 million reduction in J&J MedTech revenue, attributable primarily to lower pricing which contributed $8.3 million of the decrease, as well as lower sales volumes accounting for $2.1 million of the decrease. There was a $0.6 million decrease in non-orthopedic revenue for the nine-month period ended September 30, 2025 with prior year due to lower veterinary product sales offset somewhat by higher ophthalmic sales.

Previous wording

Revenue from our Commercial Channel product family had no change for the three-month period ended June 30, 2025 and increased 8% for the six-month period ended June 30, 2025, as compared to the same period in 2024. For the three-month period ended June 30, 2025, regenerative revenue was up $1.0 million due primarily to higher Integrity and Hyalofast sales offset by a $1.0 million decrease in international OA pain management product sales, primarily related to timing of Monovisc shipments. For the six-month period ended June 30, 2025, regenerative revenue was up $1.7 million due primarily to higher Integrity and Hyalofast revenues.

Current wording

Revenue from our Commercial Channel product family increased by 22% and 13% for the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same period in 2024. For the three-month period ended September 30, 2025, international OA pain management product sales increased $1.5 million, primarily related to higher Cingal and Orthovisc sales and regenerative revenue was up $0.7 million due primarily to an increase of Integrity and Hyalofast sales. For the nine-month period ended September 30, 2025, regenerative revenue was up $2.4 million due primarily due to an increase in Integrity and Hyalofast revenues and international OA pain management sales were up $1.4 million due to higher Cingal and Orthovisc sales offset somewhat by lower Monovisc sales.

Previous wording

Gross profit for the three-month period ended June 30, 2025 decreased $6.1 million and $10.4 million for the six-month period ended June 30, 2025 to $14.4 million and $29.0 million, respectively. Gross profit for the three- and six-month periods ended June 30, 2024 was $20.5 million and $39.5 million, respectively. The decrease in gross profit for the three- and six-month periods ended June 30, 2025 was primarily related to higher inventory reserves, higher production costs and lower revenue related to the timing of OA Pain Management revenues.

Current wording

Gross profit for the three- and nine-month periods ended September 30, 2025 was $15.6 million and $44.6 million, respectively. Gross profit for the three- and nine-month periods ended September 30, 2024 was $19.4 million and $58.9 million, respectively. The decrease in gross profit for the three- and nine-month periods ended September 30, 2025 was primarily related to higher inventory reserves, higher production costs and a larger percentage of international sales which have a lower average selling price.

Previous wording

Gross margin for the three- and six-month periods ended June 30, 2025 was 51% and 53%, respectively. Gross margin for the three- and six-month period ended June 30, 2024 was 67% and 66%, respectively. The decrease in gross margin was due to higher inventory reserves, higher manufacturing costs and a larger percentage of international sales which have a lower average selling price.

Current wording

Gross margin for the three- and nine-month periods ended September 30, 2025 was 56% and 54%, respectively. Gross margin was 66% for each of the three- and nine-month periods ended September 30, 2024. The decrease in gross margin was due to higher inventory reserves, higher manufacturing costs and a larger percentage of international sales which have a lower average selling price.

Previous wording

Research and development expenses for the three- and six-month periods ended June 30, 2025 were as follows:

Current wording

Research and development expenses for the three- and nine-month periods ended September 30, 2025 were as follows:

Previous wording

Research and development external costs for the three- and six-month periods ended June 30, 2025 were $2.8 million and $5.1 million, respectively. Research and development external costs for the three- and six-month periods ended June 30, 2024 were $5.1 million and $4.3 million, respectively. The increase in research and development external costs was primarily due to increased spending on Cingal and Integrity clinical studies.

Current wording

Research and development external costs for the three- and nine-month periods ended September 30, 2025 were $3.3 million and $8.4 million, respectively. Research and development external costs for the three- and nine-month periods ended September 30, 2024 were $2.3 million and $6.6 million, respectively. The increase in research and development external costs was primarily due to increased spending on Cingal regulatory submission activities and Integrity clinical studies.

Previous wording

Research and development internal costs for the three- and six-month periods ended June 30, 2025 were $3.5 million and $7.3 million, respectively. Research and development internal costs for the three- and six-month periods ended June 30, 2024 were $4.3 million and $8.8 million, respectively. The decrease in internal research and development costs was primarily due to a reduction in headcount and a gain on the sale of an intangible asset during the three-month period ended June 30, 2025.

Current wording

Research and development internal costs for the three- and nine-month periods ended September 30, 2025 were $3.7 million and $11.0 million, respectively. Research and development internal costs for the three- and nine-month periods ended September 30, 2024 were $3.7 million and $12.4 million, respectively. The decrease in internal research and development costs was primarily due to a reduction in headcount and a gain on the sale of an intangible asset during the three-month period ended September 30, 2025.

Previous wording

Selling, general and administrative expenses for the three- and six-month periods ended June 30, 2025 were $12.2 million and $25.1 million, respectively. Selling, general and administrative expenses for the three- and six-month periods ended June 30, 2024 were $15.6 million and $30.7 million, respectively. The decrease was primarily due to $1.0 million and $2.4 million in non-recurring shareholder activism costs in the three- and six-month periods ended June 30, 2024, respectively with the remainder of the decrease attributed to lower headcount.

Current wording

Selling, general and administrative expenses for the three- and nine-month periods ended September 30, 2025 were $11.9 million and $37.0 million, respectively. Selling, general and administrative expenses for the three- and nine-month periods ended September 30, 2024 were $13.5 million and $44.2 million, respectively. The decrease for the three-month period ended September 30, 2025 was due to a $0.7 million decrease in stock-based compensation with the reminder of the decrease attributed to lower headcount. The decrease for the nine-month period ended September 30, 2025 was primarily due to $2.2 million in non-recurring shareholder activism costs, a $1.5 million decrease in stock-based compensation with the remainder of the decrease attributed to lower headcount and professional fees.

Previous wording

For the three- and six- month periods ended June 30, 2025, the loss from continuing operations was $4.3 million and $8.6 million, respectively. For the three- and six month periods ended June 20, 2024, the loss from continuing operations was $1.8 million and $4.3 million, respectively. The increase in the loss from continuing operations was primarily due to lower revenue and higher manufacturing costs.

Current wording

For the three- and nine-month periods ended September 30, 2025, the loss from continuing operations was $3.2 million and $11.8 million, respectively. For the three- and nine-month periods ended September 30, 2024, the loss from continuing operations was $1.8 million and $6.3 million, respectively. The increase in the loss from continuing operations was primarily due to lower revenue and lower gross margin due to higher manufacturing costs and increased inventory reserves.

Previous wording

The income tax expense was $0.7 million and $0.8 million for the three- and six-month periods ended June 30, 2025, resulting in effective tax rates of (17.2)% and (9.8)%, respectively. The income tax expense was $1.3 million and $1.4 million for the three- and six-month periods ended June 30, 2024, resulting in an effective tax rate of (109.2)% and (43.8)%, respectively.

Current wording

The income tax expense was $0.9 million and $1.7 million for the three- and nine-month periods ended September 30, 2025, resulting in effective tax rates of (42.0)% and (17.0)%, respectively. The income tax expense was $2.2 million and $3.5 million for the three- and nine-month periods ended September 30, 2024, resulting in an effective tax rate of 667.7% and (126.3)%, respectively.

Previous wording

The net change in the effective tax rate for the three- and six-month periods ended June 30, 2025, compared to the same periods in 2024, was primarily driven by the impact of a higher year-to-date pre-tax loss in the current year and higher U.S. current tax expense in the prior year. The higher tax expense in the prior year was due to greater projected U.S. taxable income, despite the continued presence of a full valuation allowance in 2025.

Current wording

The net change in the effective tax rate for the three- and nine-month periods ended September 30, 2025, compared to the same periods in 2024, was primarily driven by the impact of a higher year-to-date pre-tax loss in the current year and higher U.S. current tax expense in the prior year. The higher tax expense in the prior year was due to higher current income tax expense in the U.S.

Previous wording

The following is a reconciliation of adjusted EBITDA, a non-GAAP metric, to net loss, the most directly comparable GAAP financial measure, for the three and six-month periods ended June 30, 2025 and 2024, respectively:

Current wording

The following is a reconciliation of adjusted EBITDA, a non-GAAP metric, to net loss, the most directly comparable GAAP financial measure, for the three and nine-month periods ended September 30, 2025 and 2024, respectively:

Previous wording

Adjusted EBITDA in the three-month period ended June 30, 2025 decreased by $5.0 million as compared with the same period in 2024. The decrease in Adjusted EBITDA for the period was primarily driven by lower gross profit from lower revenue and higher manufacturing costs.

Current wording

Adjusted EBITDA in the three-month period ended September 30, 2025 decreased by $3.7 million as compared with the same period in 2024. The decrease in Adjusted EBITDA for the period was primarily driven by lower revenue due primarily to a decrease in J&J Medtech sales and lower gross profit from higher manufacturing costs and higher proportion of international sales that have a lower average selling price.

Previous wording

Adjusted EBITDA in the six-month period ended June 30, 2025, decreased $7.6 million as compared with the same period in 2024. The decrease in Adjusted EBITDA for the period was primarily driven by lower gross profit from lower revenue and higher manufacturing costs.

Current wording

Adjusted EBITDA in the nine-month period ended September 30, 2025, decreased $11.1 million as compared with the same period in 2024. The decrease in Adjusted EBITDA for the period was primarily driven by lower revenue due primarily to a decrease in J&J Medtech sales and lower gross profit from higher manufacturing costs, higher inventory reserves and higher proportion of international sales that have a lower average selling price.

Previous wording

The following is a reconciliation of adjusted net loss, a non-GAAP metric, to net income (loss), the most directly comparable GAAP financial measure, for the three and six-month periods ended June 30, 2025 and 2024, respectively:

Current wording

The following is a reconciliation of adjusted net loss, a non-GAAP metric, to net income (loss), the most directly comparable GAAP financial measure, for the three and nine-month periods ended September 30, 2025 and 2024, respectively:

Previous wording

The following is a reconciliation of adjusted diluted EPS, a non-GAAP metric, to diluted EPS, the most directly comparable GAAP financial measure, for the three and six-month periods ended June 30, 2025 and 2024, respectively:

Current wording

The following is a reconciliation of adjusted diluted EPS, a non-GAAP metric, to diluted EPS, the most directly comparable GAAP financial measure, for the three and nine-month periods ended September 30, 2025 and 2024, respectively:

Previous wording

Adjusted net income and adjusted diluted earnings per share in the three-month period ended June 30, 2025 decreased $2.3 million and $0.16, respectively, as compared with the same period in 2024. The decrease for the period was primarily due to lower revenues and lower gross profit.

Current wording

Adjusted net income and adjusted diluted earnings per share in the three-month period ended September 30, 2025 decreased $0.4 million and $0.03, respectively, as compared with the same period in 2024. The decrease for the period was primarily due to lower revenues and lower gross profit.

Previous wording

Adjusted net income and adjusted diluted earnings per share in the six-month period ended June 30, 2025 decreased $7.8 million and $0.53, respectively, as compared with the same period in 2024. The decrease for the period was primarily due to lower revenues and lower gross profit.

Current wording

Adjusted net income and adjusted diluted earnings per share in the nine-month period ended September 30, 2025 decreased $5.8 million and $0.40, respectively, as compared with the same period in 2024. The decrease for the period was primarily due to lower revenues and lower gross profit due primarily to higher inventory reserves.

Previous wording

We require cash to fund our operating activities and to make capital expenditures and other investments in the business. We expect that our requirements for cash to fund these uses will increase as our operations expand. We continue to generate cash from operating activities and believe that our operating cash flows, cash currently on our balance sheet and availability under our credit facility will be sufficient to allow us to continue to invest in our existing business, to manage our capital structure on a short and long-term basis, and to meet our anticipated operating cash needs. Cash and cash equivalents aggregated $53.2 million and $55.6 million, and working capital totaled $83.2 million and $90.3 million, at June 30, 2025 and December 31, 2024, respectively.

Current wording

We require cash to fund our operating activities and to make capital expenditures and other investments in the business. We expect that our requirements for cash to fund these uses will increase as our operations expand. We continue to generate cash from operating activities and believe that our operating cash flows, cash currently on our balance sheet and availability under our credit facility will be sufficient to allow us to continue to invest in our existing business, to manage our capital structure on a short and long-term basis, and to meet our anticipated operating cash needs. Cash and cash equivalents aggregated $58.0 million and $55.6 million, and working capital totaled $82.5 million and $90.3 million, at September 30, 2025 and December 31, 2024, respectively.

Previous wording

The following changes contributed to the net change in cash and cash equivalents in the six-month period ended June 30, 2025 as compared to the same period in 2024.

Current wording

The following changes contributed to the net change in cash and cash equivalents in the nine-month period ended September 30, 2025 as compared to the same period in 2024.

Previous wording

Cash used in operating activities was $0.3 million for the six-month period ended June 30, 2025, as compared to cash used in operating activities of $1.2 million for the same period in 2024. The decrease in cash used in operating activities for the six-months ended June 30, 2025, compared to the same period in prior year, was primarily due to an improvement in the change in working capital during the six-month period ended June 30, 2025, primarily from a reduction in inventory and accounts receivable.

Current wording

Cash provided by operating activities was $6.6 million for the nine-month period ended September 30, 2025, as compared to cash provided by operating activities of $3.8 million for the same period in 2024. The increase in cash provided by operating activities for the nine-months ended September 30, 2025, compared to the same period in prior year, was primarily due to a lower net loss and an improvement in the change in working capital during the nine-month period ended September 30, 2025, primarily from a reduction in inventory and an increase in accounts payable.

Previous wording

Cash provided by investing activities was $1.1 million for the six-month period ended June 30, 2025, as compared to cash used in investing activities of $5.2 million for the same period in 2024. The change was primarily due to $4.5 million received from the sale of Parcus Medical. Capital expenditures were $4.3 million in the six-month period ended June 30, 2025 compared to $5.2 million for the same period in 2024. The decrease in capital expenditures was due to timing of purchases related to our continued manufacturing capacity expansion at our facility in Bedford, Massachusetts.

Current wording

Cash used in investing activities was $0.6 million for the nine-month period ended September 30, 2025, as compared to cash used in investing activities of $7.0 million for the same period in 2024. The change was primarily due to $4.5 million received from the sale of Parcus Medical. Capital expenditures were $6.2 million in the nine-month period ended September 30, 2025 compared to $6.4 million for the same period in 2024. The decrease in capital expenditures was due to timing of purchases related to our continued manufacturing capacity expansion at our facility in Bedford, Massachusetts.

Previous wording

Cash used in financing activities was $5.3 million for the six-month period ended June 30, 2025, as compared to cash used in financing activities of $3.4 million for the same period in 2024. In both periods, the cash used in financing activities was primarily attributable to utilization of cash for share repurchases and employee tax withholding in exchange for shares surrendered by equity award holders.

Current wording

Cash used in financing activities was $5.3 million for the nine-month period ended September 30, 2025, as compared to cash used in financing activities of $7.4 million for the same period in 2024. In both periods, the cash used in financing activities was primarily attributable to utilization of cash for share repurchases and employee tax withholding in exchange for shares surrendered by equity award holders.

Previous wording

Our contractual obligations and other commercial commitments are summarized in the section captioned “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations and Other Commercial Commitments” in our 2024 Form 10-K for the year ended December 31, 2024. There were no material changes to our contractual obligations reported in our 2024 Form 10-K during the six months ended June 30, 2025. For additional discussion, see Note 11 to the condensed consolidated financial statements included in this report.

Current wording

Our contractual obligations and other commercial commitments are summarized in the section captioned “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations and Other Commercial Commitments” in our 2024 Form 10-K for the year ended December 31, 2024. There were no material changes to our contractual obligations reported in our 2024 Form 10-K during the nine months ended September 30, 2025. For additional discussion, see Note 11 to the condensed consolidated financial statements included in this report.