On Feb 26 shares were soaring for small-cap pharmaceuticals company Anika Therapeutics ($ANIK) on news that its single-injection treatment for osteoarthritis, Monovisc, had received FDA approval four years after its initial application. The news caused the Nasdaq to halt trading on the stock the day prior, and shares opened up 27.6 percent at $44 a share. The gains quickly accelerated, though, touched almost $52.50 a share, and were holding at gains of nearly 50 percent by midday. Volume was extremely heavy, with over 3.75 million shares moved before lunch against a daily average volume of just under 300,000.
The news should allow Anika to build on its steadily rising revenues, which have benefitted from international sales of Monovisc in Canada and the United Kingdom among other territories in Europe, Asia, and the Middle East.
“MONOVISC will be marketed in the U.S. by DePuy Synthes, Mitek Sports Medicine (Mitek), a leading orthopedic sports medicine company,” said the company’s press release. “Under the license agreement with Mitek, Anika will receive a milestone payment of $5 million upon first commercial sale of MONOVISC in the market. The agreement also calls for potential additional payments contingent on achieving certain performance and sales threshold milestones, in addition to product transfer and royalty fees.”
Osteoarthritis is a chronic conditions caused by the breakdown of cartilage in joints that leaves bones rubbing against each other. Monovisc is intended to reduce pain and increase mobility. Its main attraction, though, is that it’s a single-injection treatment, giving it some advantage over Orthovisc, Anika’s other treatment for knee pain caused by arthritis, which requires three injections.
"The U.S. market for viscosupplementation therapy is experiencing double digit growth annually. With FDA approval of MONOVISC, we can be better positioned with our single and multi-injection products to meet the varying needs of physicians and patients," said Anikia President and CEO Charles H. Sherwood, Ph.D. "We are moving forward rapidly with Mitek Sports Medicine to capitalize on the strengths of our viscosupplementation portfolio. Commercial introduction for MONOVISC in the U.S. is planned to take place in conjunction with the annual meeting of the American Academy of Orthopedic Surgeons to be held in New Orleans, March 11 to 15, 2014."
The news also prompted an upgrade from analysts at Summer Street Research, who increased their price target from $47 to $60 on the news of the long-sought approval from the FDA.
"Management did a tremendous job in pushing forward through multiple rejections at the FDA," Summer Street Research analyst Mark Landy said. "We believe this product will be competitive in a market that is becoming more focused on single-shot injections."
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