May 02, 2018

BEDFORD, Mass.–(BUSINESS WIRE)–Anika Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated orthopedic and regenerative medicines company specializing in therapeutics based on its proprietary hyaluronic acid (“HA”) technology, today reported financial results for the first quarter ended March 31, 2018, along with business progress in the period.

“In the first quarter, Anika saw strong growth in its most prominent product categories and continued to take the steps necessary to transform the Company into a fully integrated, global commercial organization,” said Joseph Darling, President and Chief Executive Officer of Anika Therapeutics. “Global MONOVISC revenue increased 29% year-over-year, and end-user demand for CINGAL in Europe and Canada remained strong in the first quarter. Together, MONOVISC and CINGAL global revenue grew 38% year-over-year. However, that growth was countered by soft ORTHOVISC revenue, non-recurring charges related to the planned CEO transition, and a voluntary recall of three HYAFF-based products.”

Mr. Darling continued, “We are rapidly advancing the CINGAL Phase III trial, with the completion of the 6-month patient follow-up in April. Our entire leadership team is energized and focused on delivering our new and innovative solutions to the market, accelerating our revenue and earnings growth in the years ahead, and creating sustained value for our shareholders.”

First Quarter Financial Results

• Total revenue for the first quarter of 2018 was $21.3 million, compared to $23.4 million for the first quarter of 2017. The year-over-year decline was due in part to $1.1 million related to the voluntary, non-safety related recall of HYALOFAST, HYALOGRAFT-C, and HYALOMATRIX.
• Worldwide Orthobiologics revenue decreased $0.7 million year-over-year in the first quarter of 2018, due primarily to lower ORTHOVISC revenue. Global MONOVISC revenue increased 29% year-over-year in the first quarter of 2018, resulting from our international expansion efforts and the industry shift from multi- to single-injection therapies.
• International Viscosupplementation revenue increased 17% for the first quarter of 2018, due primarily to the global expansion of MONOVISC, as well as the growth of CINGAL in the international markets. Domestically, ORTHOVISC and MONOVISC achieved the number one position in the combined multi- and single-injection segments in the first quarter of 2018.
• Total operating expenses for the first quarter of 2018 were $29.1 million, compared to $15.4 million for the first quarter of 2017. The increase in total operating expenses was due primarily to a one-time charge of $8.4 million, which consisted mainly of non-cash stock-based compensation expense associated with the retirement of our former CEO.
• Net loss for the first quarter of 2018 was $6.7 million, or ($0.46) per diluted share, compared to net income of $5.5 million, or $0.37 per diluted share, for the first quarter of 2017. The decline in net income was due primarily to the increase in operating expenses previously discussed.

Recent Business Highlights

The Company made key commercial, pipeline and operational advancements, including:

• Appointing Joseph Darling as Chief Executive Officer and as a Director to succeed Dr. Charles Sherwood, who retired as Chief Executive Officer and a Director in March 2018. Mr. Darling joined Anika as President in late July 2017, bringing more than 20 years of extensive experience in executive management and leadership skills from publicly-traded, commercial-stage companies, including Abbott Laboratories, Baxter Healthcare, Smith & Nephew, CONMED, and Wyeth-Ayerst.
• Advancing its product pipeline with the completion of 6-month patient follow-up in the CINGAL Phase III study for the treatment of osteoarthritis pain in the knee, continued progress in the CINGAL 3-month extension study and the FastTRACK Phase III HYALOFAST Study for cartilage repair, as well as the Phase III MONOVISC study for the treatment of osteoarthritis pain in the hip.
• Continuing the development of a direct commercial capability in the United States to support the planned U.S. launch of CINGAL in 2019 and other new therapies in the years ahead.

Voluntary Recall of HYALOFAST, HYALOGRAFT-C and HYALOMATRIX

The Company is undertaking a voluntary recall of certain lots of its HYALOFAST, HYALOGRAFT-C, and HYALOMATRIX products. While there is no indication of any safety or efficacy issue related to the affected products at this time, the Company remains committed to the highest standards of quality and is removing the products from the field as a precautionary measure. The recall is being initiated by the Company following internal quality testing which indicated that the products were at risk of not maintaining certain measures throughout their entire shelf life. All impacted distributors have been notified of the recall, and the Company is taking all appropriate actions with respect to applicable regulatory authorities. The Company is in the process of identifying and implementing the appropriate operational resolution of the underlying issue, and it expects to fully resolve the matter and resume production and shipping by the end of 2018. The HYALOFAST product being used to conduct the ongoing Phase III clinical trial was not impacted by the recall.

The voluntary recall negatively impacted the Company’s financial results for the first quarter of 2018 by $1.1 million in product revenue, $0.6 million in inventory reserves, and $0.4 million in administration costs related to the recall. HYALOFAST, HYALOGRAFT-C, and HYALOMATRIX revenue totaled approximately 3% of total revenue for the full year of 2017.

“This voluntary recall is based on the Company’s commitment to the highest standards of quality for which we are known around the globe,” continued Joseph Darling. “While there is no indication of any impact on the safety or efficacy of the product at this time, we cannot accept any deviation from our stringent quality measures. Our quality and engineering staff are working diligently to resolve the issue in order to bring these products back into the hands of surgeons who have used the products to treat patients in need.”

Full Year 2018 Revised Corporate Outlook

Based on Anika’s first quarter 2018 results and currently available information, the Company revised its guidance for the full year of 2018. Anika now expects total revenue growth to be flat for the full year of 2018. Total operating expenses are expected to be in the high $90 million range for the full year of 2018, including the one-time charge associated with the retirement of our former CEO in the first quarter of 2018 and the expenses associated with CINGAL pre-launch activities required to support a successful direct commercialization in the U.S.

Conference Call Information

Anika’s management will hold a conference call and webcast to discuss its financial results and business highlights tomorrow, Thursday, May 3 at 9:00 am ET. The conference call can be accessed by dialing 1-855-468-0611 (toll-free domestic) or 1-484-756-4332 (international). A live audio webcast will be available in the “Investor Relations“ section of Anika’s website, www.anikatherapeutics.com. An accompanying slide presentation may also be accessed via the Anika website. A replay of the webcast will be available on Anika’s website approximately two hours after the completion of the event.

About Anika Therapeutics, Inc.

Anika Therapeutics, Inc. (NASDAQ: ANIK) is a global, integrated orthopedic and regenerative medicines company based in Bedford, Massachusetts. Anika is committed to improving the lives of patients with degenerative orthopedic diseases and traumatic conditions with clinically meaningful therapies along the continuum of care, from palliative pain management to regenerative cartilage repair. The Company has over two decades of global expertise developing, manufacturing, and commercializing more than 20 products based on its proprietary hyaluronic acid (HA) technology. Anika’s orthopedic medicine portfolio includes ORTHOVISC^®, MONOVISC^®, and CINGAL^®, which alleviate pain and restore joint function by replenishing depleted HA, and HYALOFAST, a solid HA-based scaffold to aid cartilage repair and regeneration. For more information about Anika, please visit www.anikatherapeutics.com.

Forward-Looking Statements

The statements made in the first sentence of the third paragraph, the second and third bullet points under the caption “Recent Business Highlights,” the fifth sentence of the first paragraph under the caption “Voluntary Recall of HYALOFAST, HYALOGRAFT-C, and HYALOMATRIX,” and the disclosure under the caption “Full Year 2018 Revised Corporate Outlook” of this press release, which are not statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, those relating to the timing for completion of the Company’s CINGAL clinical trial and the product’s commercial launch, the Company’s expectations with respect to timeline for its HYALOFAST clinical trial, the timing associated with the resolution of the Company’s voluntary product recall, and the Company’s expectations regarding its 2018 financial performance. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks, uncertainties, and other factors. The Company’s actual results could differ materially from any anticipated future results, performance, or achievements described in the forward-looking statements as a result of a number of factors including, but not limited to, (i) the Company’s ability to successfully commence and/or complete clinical trials of its products on a timely basis or at all; (ii) the Company’s ability to obtain pre-clinical or clinical data to support domestic and international pre-market approval applications, 510(k) applications, or new drug applications, or to timely file and receive FDA or other regulatory approvals or clearances of its products; (iii) that such approvals will not be obtained in a timely manner or without the need for additional clinical trials, other testing or regulatory submissions, as applicable; (iv) the Company’s research and product development efforts and their relative success, including whether we have any meaningful sales of any new products resulting from such efforts; (v) the cost effectiveness and efficiency of the Company’s clinical studies, manufacturing operations, and production planning; (vi) the strength of the economies in which the Company operates or will be operating, as well as the political stability of any of those geographic areas; (vii) future determinations by the Company to allocate resources to products and in directions not presently contemplated; (viii) the Company’s ability to successfully commercialize its products, in the U.S. and abroad; (ix) the Company’s ability to provide an adequate and timely supply of its products to its customers; and (x) the Company’s ability to achieve its growth targets. Additional factors and risks are described in the Company’s periodic reports filed with the Securities and Exchange Commission, and they are available on the SEC’s website at www.sec.gov. Forward-looking statements are made based on information available to the Company on the date of this press release, and the Company assumes no obligation to update the information contained in this press release.

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AUDUBON, Pa., May 02, 2018 (GLOBE NEWSWIRE) — Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal solutions company, today announced its financial results for the first quarter ended March 31, 2018.

• Worldwide sales were $174.4 million, an increase of 11.9% as reported, or 10.8% in constant currency
• First quarter net income was $39.5 million, or 22.7% of sales
• Diluted earnings per share (EPS) were $0.39
• Non-GAAP diluted EPS were $0.41
• Non-GAAP adjusted EBITDA was 35.4% of sales

“We had a strong first quarter with worldwide sales up 11.9% over the first quarter of 2017 at $174 million,” said CEO Dave Demski.  “We also realized $0.41 in non-GAAP diluted EPS in the first quarter, an increase of 31%.  We had $12.8 million in revenue from Emerging Technologies, primarily due to robust demand for our ExcelsiusGPS^® robotics and navigation system.  On a day-adjusted basis, our U.S. Spine business grew at 4.0% over last year.”

“We are pleased with our first quarter performance – not only the continued excitement among surgeons and hospitals about ExcelsiusGPS^®, but also the above market growth we achieved in the U.S. with our core spine business and the solid operational improvements we saw in several important International markets.  I’m very proud of our team’s ability to capitalize on our growth opportunities while maintaining fiscal discipline, as our bottom line grew as fast as our top line, even though we continue to invest heavily in Imaging, Navigation and Robotics as well as Trauma.”

First quarter sales in the U.S. increased by 12.3% compared to the first quarter of 2017.  International sales increased by 10.1% over the first quarter of 2017 on an as-reported basis and 3.5% on a constant currency basis.

First quarter GAAP net income was $39.5 million, an increase of 37.7% over the same period last year.  Diluted EPS for the first quarter was $0.39, as compared to $0.30 for the first quarter 2017.  Non-GAAP diluted EPS for the first quarter was $0.41, compared to $0.32 in the first quarter of 2017.

The company generated net cash provided by operating activities of $52.3 million and non-GAAP free cash flow of $39.9 million in the first quarter.  Cash, cash equivalents and marketable securities ended the quarter at $473.6 million.  The company remains debt free.

2018 Annual Guidance
The company increased guidance for full year 2018 sales to $695 million from $690 million and non-GAAP fully diluted earnings per share to $1.52 from $1.50.

Conference Call Information
Globus Medical will hold a teleconference to discuss its 2018 first quarter results with the investment community at 4:30 p.m. Eastern Time today.  Globus invites all interested parties to join the call by dialing:

1-855-533-7141          United States Participants
1-216-562-0037          International Participants
There is no pass code for the teleconference.

For interested parties who do not wish to ask questions, the teleconference will be webcast live and may be accessed through a link on the Globus Medical website at investors.globusmedical.com.

The call will be archived until Wednesday, May 9, 2018.  The audio archive can be accessed by calling 1-855-859-2056 in the U.S. or 1-404-537-3406 from outside the U.S. The passcode for the audio replay is 1012-6349.

About Globus Medical, Inc.
Based in Audubon, Pennsylvania, Globus Medical, Inc. was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. Additional information can be accessed at www.globusmedical.com.

Non-GAAP Financial Measures
To supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), management uses certain non-GAAP financial measures.  For example, non-GAAP adjusted EBITDA, which represents net income before interest income, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation, provisions for litigation, technology in-licensing fee, and acquisition related costs, is useful as an additional measure of operating performance, and particularly as a measure of comparative operating performance from period to period, as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure, asset base, income taxes and interest income and expense.  Our management also uses non-GAAP adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections.  Provision for litigation represents costs incurred for litigation settlements or unfavorable verdicts when the loss is known or considered probable and the amount can be reasonably estimated, or in the case of a favorable settlement, when income is realized.  Acquisition related costs/licensing represents the change in fair value of business acquisition related contingent consideration; costs related to integrating recently acquired businesses including but not limited to costs to exit or convert contractual obligations, severance, and information system conversion; and specific costs related to the consummation of the acquisition process such as banker fees, legal fees, and other acquisition related professional fees, as well as one time licensing fees.

In addition, for the period ended March 31, 2018 and for other comparative periods, we are presenting non-GAAP net income and non-GAAP diluted earnings per share, which represents net income and diluted earnings per share excluding the provision for litigation, amortization of intangibles, acquisition related costs/licensing, prior period adjustment and the tax effects of such adjustments.  Prior period adjustments represent the cumulative impact of prior year adjustments related to depreciation, scrap and provision for excess and obsolete inventory, none of which were individually material to the related year’s financial position or results of operations.  We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operating performance from period to period as they remove the effects of litigation, amortization of intangibles, acquisition related costs/licensing, prior period adjustments and the tax effects of such adjustments, which we believe are not reflective of underlying business trends.  Additionally, for the periods ended March 31, 2018 and for other comparative periods, we also define the non-GAAP measure of free cash flow as the net cash provided by operating activities, adjusted for the impact of restricted cash, less the cash impact of purchases of property and equipment.  We believe that this financial measure provides meaningful information for evaluating our overall financial performance for comparative periods as it facilitates an assessment of funds available to satisfy current and future obligations and fund acquisitions.  Furthermore, the non-GAAP measure of constant currency sales growth is calculated by translating current year sales at the same average exchange rates in effect during the applicable prior year period.  We believe constant currency sales growth provides insight to the comparative increase or decrease in period sales, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.

Non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth are not calculated in conformity with U.S. GAAP.  Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP.  These measures do not include certain expenses that may be necessary to evaluate our liquidity or operating results.  Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth may differ from that of other companies and therefore may not be comparable.  Additionally, we have recast prior periods for non-GAAP net income and non-GAAP diluted earnings per share.

Safe Harbor Statements
All statements included in this press release other than statements of historical fact are forward-looking statements and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and other similar terms.  These forward-looking statements are based on our current assumptions, expectations and estimates of future events and trends.  Forward-looking statements are only predictions and are subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results to differ materially from those predicted.  These risks and uncertainties include, but are not limited to, factors affecting our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop and execute on successful business strategies, our ability to successfully integrate the international operations acquired from Alphatec, both in general and on our anticipated timeline, our ability to transition Alphatec’s international customers to Globus products, our ability to realize the expected benefits to our results from the Alphatec acquisition, our ability to comply with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property, our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions, and other risks.  For a discussion of these and other risks, uncertainties and other factors that could affect our results, you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and other filings with the Securities and Exchange Commission.  These documents are available at www.sec.gov.  Moreover, we operate in an evolving environment.  New risk factors and uncertainties emerge from time to time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements.  Forward-looking statements contained in this press release speak only as of the date of this press release.  We undertake no obligation to update any forward-looking statements as a result of new information, events or circumstances or other factors arising or coming to our attention after the date hereof.

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LEESBURG, Va., May 01, 2018 (GLOBE NEWSWIRE) — K2M Group Holdings, Inc. (Nasdaq:KTWO) (the “Company” or “K2M”), a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance^™, today reported financial results for its first quarter ended March 31, 2018.

First Quarter 2018 Financial Summary:

• Total first quarter revenue of $67.9 million, up 10% year-over-year on a reported basis and 8% on a constant currency basis.
• Domestic first quarter revenue of $49.9 million, up 8% year-over-year, comprised of:
  • U.S. Complex Spine growth of 8% year-over-year
  • U.S. Minimally Invasive Surgery (MIS) growth of 6% year-over-year
  • U.S. Degenerative growth of 9% year-over-year
• International first quarter revenue of $18.0 million, up 15% year-over-year, and 9% on a constant currency basis.
• Net loss of $11.4 million for the first quarter, compared to a net loss of $10.9 million in the comparable quarter last year.
• Adjusted EBITDA loss of $3.0 million for the first quarter, compared to Adjusted EBITDA loss of $336,000 in the comparable quarter last year.

First Quarter Product Introductions and Strategic Highlights:

• On February 26, 2018, the Company announced the licensure of its BACS^® Data Management tool to the International Spine Study Group Foundation (ISSGF) for collecting spine patient data, including patient reported outcome measures (PROMs), as part of the ISSGF’s globally recognized research studies.
• On March 14, 2018, the Company announced the commercial launch of the YUKON^™  OCT Spinal System at the 34th Annual Meeting of the American Association of Neurological Surgeons/Congress of Neurological Surgeons Section on Disorders of the Spine and Peripheral Nerves (AANS/CNS). At the meeting, the Company also showcased Balance ACS^® or (BACS), a comprehensive platform that applies three-dimensional solutions across the entire clinical care continuum to help drive quality outcomes for spine patients.
• On March 29, 2018, the Company announced the appointment of Lane Major as Chief Operating Officer, a new position within K2M.

Highlights Subsequent to Quarter-End:

• On April 27, 2018, the Company executed an exclusive agency and services agreement to replace its existing exclusive distribution agreement with its partner in Spain and Portugal, Medcomtech, S.A., whereby Medcomtech and K2M extended their partnership through 2024.  Pursuant to the agreement, K2M acquired Medcomtech’s spine customer contracts and relationships and its existing K2M product inventory and instrumentation in exchange for certain outstanding receivables from Medcomtech.

  In addition, Medcomtech will transition from a stocking-based distributor to a commission-based independent sales agency, and K2M will become responsible for and assume risk of billing, collections and inventory management for Medcomtech’s business related to K2M products while Medcomtech will remain focused on sales, marketing and market development activities for these products.  Beginning in May, revenue generated by K2M in Spain and Portugal will reflect its supplier relationships at the hospital level as opposed to its prior wholesale relationship with Medcomtech.  We believe this revised relationship with Medcomtech represents an opportunity to improve the growth and gross margin profile for Spain and Portugal going forward.

“Our first quarter total revenue growth of approximately 10% year-over-year reflect solid trends in the U.S. and stronger-than-expected demand in international markets,” said Chairman, President, and Chief Executive Officer, Eric Major. “We delivered approximately 8% growth in the United States in Q1—at the high-end of our growth expectations—driven by solid execution against our strategic goal of increasing market share by introducing new and innovative spinal implant solutions like our first-of-its-kind MOJAVE PL 3D Expandable Interbody System featuring Lamellar 3D Titanium Technology and our YUKON OCT Spinal System that can be used with the PALO ALTO Cervical Static Corpectomy Cage System, the first and only static corpectomy cage in the world to receive a cervical 510(k) clearance.”

Mr. Major continued, “We have increased our fiscal year 2018 revenue guidance expectations to a new range of $283 million to $287 million based on our improved revenue outlook for Spain.  We remain confident in our ability to drive above-market growth in the U.S., fueled by our continued focus on leading the spine market by introducing new and innovative spinal implant solutions to help surgeons care for patients around the world who suffer from debilitating spinal pathologies.”

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