Anika Therapeutics Offers A Long-Term Growth Opportunity With Robust Pipeline

Anika Therapeutics Inc. (ANIK) is an orthopedic medicines company and it employs its hyaluronic acid (HA) technology for developing various treatments. The company offers a good potential for medium to long term investment as it has a strong and diversified product pipeline. Apart from the pipeline, it also has robust drug portfolio with products such as Orthovisc, Monovisc and Cingal. While these products have been in the market for quite some time, the company is still expanding its market share and is likely to keep seeing accelerated growth rate.

Anika’s lead drug candidates are HYALOFAST and ORTHOVISC-T. While Hyalofast is currently in Phase III trial, the company plans to start phase III trials for Orthovisc-T by the end of this year. The drugs are expected to perform well in the trials as these drug candidates are already approved in several overseas markets. The company is also in robust financial position as it recently reported its first quarter results. It reported 24 percent year over year growth for its Monovisc revenue. The company’s net income stood at $5.5 million, or $0.37 per diluted share.

While the company offers short term catalyst in the form of upcoming announcement related to the launch of Phase III trails for Orthovisc-T, the real value of the stock is likely to be unlocked in medium to long term. As can be seen from impressive growth shown by the company products, Anika is expected carve a niche for itself in orthopedic market.

Risks

Anika Therapeutics has relatively mild risk profile. The company has established products in the market while its drug candidates have high probability of receiving the FDA approval as well as of performing well in the market. However, the company is currently waiting for the FDA approval for Monovisc and Cingal for additional indications, which are hip indication and knee indication respectively. Any failure or setback in receiving such approval may hamper the company’s plans to expand its positioning. It may also have negative impact on the liquidity position of the company.