investment recommendation by: devopama pant chen liang qiao du date of presentation: 12/09/2014...
TRANSCRIPT
Investment Recommendation By:• Devopama Pant• Chen Liang• Qiao Du
Date of Presentation: 12/09/2014
INSPIRED BY NATURE.PERFECTED BY SCIENCE.
Agenda
Company ProfileCurrent Financial PositionStrategy OverviewIndustry ReviewMacroeconomic ReviewFinancial AnalysisValuationRecommendation
A global medical technology company at the forefront of pain management, tissue regeneration and wound healing
20 years of R&D, Manufacturing and Commercialization experience with innovative HA products
Product approvals worldwide 400 scientific publications 50 patents on native and chemically modified HA
Anika Therapeutics Inc.
Third Quarter 2014 Anika Therapeutics Earnings Conference Call Webcast and Presentation http://ir.anikatherapeutics.com/events.cfm
Anika Vs NASDAQ
10K-2013 Anika Therapeutics http://www.sec.gov/Archives/edgar/data/898437/000115752313001397/a50585765.htm
Target Segments
Sports Injuries
Aging Population
Veterinary Services
Products
OrthobiologicsDermalSurgicalOther HA (Hyaluronic Acid) Solutions
Orthobiologics: Safe and Natural Solutions Help Restore Active Function, following orthopedic trauma or reconstructive surgery, viscosupplementation represents an effective, safe and convenient therapeutic alternative to medication and surgery,
High Molecular Weight Hyaluronic Acid Injection
Single Injection, Lightly Cross-linked High Molecular Weight Hyaluronic Acid
Hyaluronan-based Scaffold for Human MSC Entrapment & Differentiation
Improving Outcomes of the Final Phases of Orthopedic and Trauma Reconstructive Surgical Procedures
Anti-Adhesion Gel
Dermal: Naturally Powerful Solutions to Enhance Natural Beauty and Manage Wounds
Film Wound Dressing
Dermal Filler
Biodegradable Wound Dressing
Burn and Ulcer Management
PA Tissue Reconstruction Matrix
Surgical: Safe and natural protection against post-surgical adhesions
To prevent or Reduce Abdomino-Pelvic Area Post-Surgical Adhesions
prevent or reduce the formation of adhesions following spinal surgery
ENT Solutions
Ear nose and throat products
Other HA (Hyaluronic Acid) Solutions: A naturally occurring polymer found throughout the body, is vital for maintaining the functionality of healthy joints and tissue. Anika’s proprietary tissue regeneration technology, based on HA, offers a natural approach to healing and recovery
Used in eye surgery including cataract extraction,intraocular lens implantation, corneal transplant surgery, glaucoma filtering surgery, and retina re-attachment
Forms a compact gel promoting bone graft application inthe bone defect
Used in the management of joint dysfunction in horses with equine osteoarthritis.
Competitors
STAAR Surgical Company
IRIDEX Corporation
SCIVISION Biotech, Inc.
Partnership
Since their founding, they have worked to forge long-term collaborations with industry leaders, including : Depuy Synthes Mitek Sports Medicine, Inc.,Medtronic, Inc., Boehringer Ingelheim Vetmedica, Inc.Bausch & Lomb
Business Model
Successful Business Model Delivering Consistent Growth
Third Quarter 2014 Anika Therapeutics Earnings Conference Call Webcast and Presentation http://ir.anikatherapeutics.com/events.cfm
Double digit Revenue growth and shareholder return
Third Quarter 2014 Anika Therapeutics Earnings Conference Call Webcast and Presentation http://ir.anikatherapeutics.com/events.cfm
YTD Financial Results 2014
Third Quarter 2014 Anika Therapeutics Earnings Conference Call Webcast and Presentation http://ir.anikatherapeutics.com/events.cfm
Strong Core Business Growth
Third Quarter 2014 Anika Therapeutics Earnings Conference Call Webcast and Presentation http://ir.anikatherapeutics.com/events.cfm
Key Growth Drivers Continue to capitalize on strong viscosupplementation
market Advance tissue regeneration products Expand market share and geographic presence for key
products in U.S., Europe, Latin America and Asia Expand product portfolio via line extensions Continue transformation from biomaterials company to
company focusing on advanced tissue healing and regenerative medical solutions
Third Quarter 2014 Anika Therapeutics Earnings Conference Call Webcast and Presentation http://ir.anikatherapeutics.com/events.cfm
Expected Growth
Third Quarter 2014 Anika Therapeutics Earnings Conference Call Webcast and Presentation http://ir.anikatherapeutics.com/events.cfm
Macroeconomic & Industry Drivers Growing employment rate Increasing R&D expenditure Increasing number of people aged 50 and older International market opportunity Continued M&A activities Favorable legislation
IBIS Industry Report http://clients1.ibisworld.com/reports/us/industry/ataglance.aspx?entid=2001 http://clients1.ibisworld.com/reports/us/industry/currentperformance.aspx?entid=2001
Industry Executive Summary Over the past five years, revenue has grown an
annualized 5.5% to &98.5 billion, which includes a 3.2% increase in 2014.
IBISWorld report expects total revenue to grow an annualized 9.1% to $152.4 billion over next five years.
Key stats in 2014
IBIS Industry Report http://clients1.ibisworld.com/reports/us/industry/ataglance.aspx?entid=2001
Industry Segmentation
IBIS Industry Report http://clients1.ibisworld.com/reports/us/industry/ataglance.aspx?entid=2001
Porter’s 5 Forces Model
Barrier to entry: HIGH
Strong intellectual property orientedCapital intensiveStrict government regulation
Threat of Substitutes:LOW
Niche Market High R&D cost
Bargaining Power of suppliers:
LOW to MEDIUM Only raw materials are
required
Bargaining Power of buyers: MEDIUM
Product with high technology
Large buyers
Competition: MEDIUM
Niche market Fast Technology updated
Strengths • Niche-player but has diversified
products within the niche market• Conduct business based on own
technologies• Debt free• 9+ million tax credit without time
limitation
Weaknesses
• No own sales force.• Limited M&A opportunity
Opportunity
• New products received FDA approval this February (osteoarthritis product MONOVISC)
• New products under development (osteoarthritis product GINGAL)
• International market
Threats• Regulation• Several companies are developing
and/or marketing products utilizing HA for variety of human applications.
• Its revenues are derived from a small number of customers.
SWOT Analysis
Ratio Analysis
DuPont Analysis
2009-12-31
2010-12-31
2011-12-31
2012-12-31
2013-12-31
2014-12-31
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
160.00%
180.00%
DuPont Analysis
Tax Burden Interest BurdenOperating Margin Asset TurnoverLeverage Ratio
Comparable Analysis
Weighted Average Cost of Capital
Discounted Cash Flow Analysis
Technical Analysis
Recommendation
BUY 200 SHARES@ MKT
Current stock price: $39.37 Implied stock price: $41.73