Anika Therapeutics (ANIK) is a leader in tissue protection products for human joints, and the company is gaining market share. It has a new product in the FDA's approval process and is already selling in Europe.

Management is lowering costs with manufacturing consolidation, and we believe that they have a number of exciting product development programs. We've initiated coverage on Anika with a BUY rating.

Here are some highlights of the company:

• Anika has developed innovative solutions for osteoarthritis with its Orthovisc and Monovisc products.
• We expect demand for osteoarthritis treatments to grow as the baby boom generation ages and desires to remain active.
• The main products are the only non-avian hyaluronic acid based products approved for injection into the joint. This enables those patients allergic to eggs or poultry to receive appropriate treatment for osteoarthritis.
• Manufacturing consolidation is lowering the company's cost structure.
• Other hyaluronic acid based products address skin grafts, advanced wound care and surgical issues. A new product for articular cartilage generation is entering clinical trials.
• We forecast earnings growth of 14.0% in 2011 and 16.8% in 2013. We note that core earnings growth is higher. Our 12 - 18 month price target is $18.50.

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