What changed in this filing

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Item 1. Business

2021-03-05 compared with 2020-03-06 · 203 added, 372 removed, 19 unchanged (97% of the section changed)

Founded in 1992, Anika Therapeutics, Inc.

is a global, integrated joint preservation and

regenerative therapies company based in Bedford, Massachusetts.

Our mission is to be the global leader in orthopedic joint therapies

and sports medicine with innovative technologies that exceed our customers’

expectations.

We are committed to delivering

solutions to improve the lives of patients across a continuum of care from joint pain management and regenerative therapies to

sports medicine and orthopedic joint preservation and restoration.

We have nearly thirty years of global expertise commercializing

more than twenty products based on our hyaluronic acid, or HA, technology platform, and we are focused on adding innovative and

differentiated offerings to our consolidated portfolio.

Our proprietary technologies for modifying the HA molecule allow product

properties to be tailored specifically to multiple therapeutic uses.

Certain of our technology chemically modifies HA to allow

for longer residence time in the body.

We have two forms of cross-linked HA gel technologies, and a solid form of HA technology

HYAFF which is the platform for our regenerative medicine.

These proprietary technologies are protected by an extensive

portfolio of owned and licensed patents.

As we look towards the future, our business

is uniquely positioned to capture value within the sports and regenerative medicine market.

Our success is driven by our focus

on our talent and culture, investment in innovative research and development programs to feed our product pipeline, expanding our

commercial footprint domestically and internationally, and pursuing strategic inorganic growth opportunities.

We intend to continue

to accelerate our commercial capabilities as we transform into a customer-centric company dedicated to advancing the joint preservation

and restoration continuum of care.

We believe that this commitment, along with our financial resources and operating history, have

positioned us well to deliver sustained value to our shareholders.

In early 2020, we expanded our overall technology platform through

our strategic acquisitions of Parcus Medical, LLC, or Parcus Medical, a sports medicine implant and instrumentation solutions provider

focused on surgical repair and reconstruction of ligaments and tendons, and Arthrosurface, Incorporated, or Arthrosurface, a joint

preservation technology company specializing in less invasive, bone preserving partial and total joint replacement solutions.

Company expects the Parcus Medical and Arthrosurface acquisitions to drive growth by:

Broadening Anika's product portfolio further into the sports medicine joint preservation and restoration space;

Adding high-growth revenue streams;

Expanding our commercial capabilities;

Diversifying our revenue base;

Expanding our product pipeline and research and development expertise.

In addition, we believe that our historical

HA and regenerative medicine expertise will be highly complementary to the sports medicine implants and instrumentation expertise

of Parcus Medical and the partial and total joint replacement expertise of Arthrosurface.

We believe that the combination of these

three businesses positions Anika to provide innovative solutions along the orthopedic continuum of care and build significant value

for patients, physicians, and key healthcare system stakeholders.

Historically, our outward-looking industry

focus has been on viscosupplement and regenerative orthopedic products that utilize HA as their major component.

These products

are used in a range of treatments, from providing pain relief from osteoarthritis to regenerating damaged tissue such as cartilage.

Osteoarthritis is a debilitating disease that causes pain, swelling, and restricted movement in joints.

Treating the pain associated

with osteoarthritis with viscosupplement products has been our predominant focus and our main source of historic revenue over the

past five years.

In addition to the treatment of osteoarthritis, our HA-based portfolio has products targeted to orthopedic regenerative

medicine, advanced wound care, products used to prevent post-surgical adhesions after a variety of surgical procedures, as well

as ophthalmic products and veterinary products targeted to treat equine osteoarthritis.

With the recent additions of the

Arthrosurface and Parcus Medical businesses, we have effectively broadened our industry focus and increased our addressable

Arthrosurface focuses on less invasive, bone preserving partial and total joint replacement implants and instruments

that may be utilized by physicians when more conservative solutions have been exhausted, but before the need for invasive

total joint replacement procedures is necessary.

Parcus Medical has a full portfolio of implants, materials and

instrumentation used for soft tissue fixation in sports medicine procedures designed with surgeon input to ensure usability

for our physician customers.

With this expansion along a broader continuum of care ranging from

joint pain management, a market opportunity we estimate to be approximately $1.0 billion, to sports and regenerative medicine and

less invasive implants, a market opportunity we estimate to be approximately $7.0 billion, we are positioning the company for future

growth, especially within the sports medicine industry.

We intend to leverage our technology portfolios and our burgeoning commercial

infrastructure to provide sustained revenue growth and become a leader in the areas in which we do business.

Joint Pain Management Therapies

Our Joint Pain Management Therapies product family consists of injectable

viscosupplement products that provide pain relief from osteoarthritis conditions.

These products include MONOVISC, ORTHOVISC, CINGAL,

and HYVISC, HA-based intraarticular injectable products indicated for the treatment of osteoarthritis pain.

Our Joint Pain Management

Therapy products are administered to patients in an office setting.

We distribute the products in this category using a distributor

model, as more fully described in the section titled “Sales Channel.”

In the United States, MONOVISC and ORTHOVISC

are marketed by DePuy Synthes Mitek Sports Medicine, a division of DePuy Orthopaedics, Inc., or Mitek, under the terms of a pair

of licensing, distribution, supply, and marketing agreements, or the Mitek MONOVISC Agreement and Mitek ORTHOVISC Agreement.

the United States, MONOVISC and ORTHOVISC have maintained the combined overall viscosupplement market leadership position since

the first quarter of 2018 on a revenue generation basis.

Internationally, we market our Joint Pain Management Therapy products

using a growing network of commercial distributors in Canada, Europe, the Middle East, Latin America, and Asia.

HYVISC is a high molecular weight injectable HA product for the treatment of joint dysfunction

in horses due to non-infectious synovitis associated with equine osteoarthritis.

HYVISC is distributed by Boehringer Ingelheim

Vetmedica, Inc., or Boehringer, in the United States.

Orthopedic Joint Preservation and Restoration Care

Our Orthopedic Joint Preservation and Restoration Care family consists

of the following key products:

· Several orthopedic regenerative medicine products based on our proprietary

HYAFF technology, which is a solid form of HA.

They include HYALOFAST, a biodegradable support for human bone marrow mesenchymal

stem cells used for cartilage regeneration and as an adjunct for microfracture surgery.

These products are currently available

in Europe, South America, Asia, and certain other international markets.

· TACTOSET, an HA-enhanced bone repair therapy designed to treat insufficiency

TACTOSET is available in the United States, and we expect to leverage the commercial infrastructure of our recent acquisitions

to increase market access to sell TACTOSET.

· Arthrosurface’s catalogue of over 150 partial and total joint surface implants

and preservation solutions for the knee, shoulder, hip, ankle, wrist and toe that are designed to treat upper and lower extremity

orthopedic conditions caused by trauma, injury and arthritic disease.

These products are designed to be less invasive and more

bone preserving than conventional joint replacements.

These products are available in the United States and over 25 international

· Parcus Medical’s line of surgical implant and instrumentation solutions that are used by surgeons to repair

and reconstruct damaged ligaments and tendons due to sports injuries, trauma and disease.

These solutions include screws, sutures,

anchors, and other surgical systems that facilitate surgical procedures on the shoulder, knee, hip, distal extremities, and tissue.

They are typically utilized by surgeons in ambulatory surgical center, or ASC, and

hospital environments.

These products are commercialized in the United States and over 60 international markets.

Our Other product family consists of legacy HA-based products that

do not fit into one of our other primary product categories.

These products include:

· Advanced wound care products based on our HYAFF technology are used

for the treatment of skin wounds, ranging from burns to diabetic ulcers.

The products cover a variety of wound treatment solutions,

including debridement agents, advanced therapies to aid healing, and scaffolds used as skin substitutes.

Leading products include

HYALOMATRIX and HYALOFILL, which are used for the treatment of complex wounds such as burns and ulcers.

· Products used in connection with the treatment of ENT (ears, nose and throat) disorders.

product is MEROGEL, a HYAFF-based woven fleece nasal packing.

We have partnered with Medtronic XoMed, Inc., or Medtronic, for worldwide

distribution of these ENT products.

· Ophthalmic products, including injectable, high molecular weight HA

products used as viscoelastic agents in ophthalmic surgical procedures such as cataract extraction and intraocular lens implantation.

is a global joint preservation company that creates and delivers meaningful advancements in early intervention orthopedic care.

Based on our collaborations with clinicians to understand what they need most to treat their patients, we develop minimally invasive products that restore active living for people around the world.

We are committed to leading in high opportunity spaces within orthopedics, including osteoarthritis (“OA”) pain management, regenerative solutions, soft tissue repair and bone preserving joint technologies.

We have nearly thirty years of global expertise developing, manufacturing and commercializing products based on our hyaluronic acid, or HA, technology platform.

HA is a naturally occurring polymer found throughout the body that is vital for proper joint health and tissue function.

Our proprietary technologies for modifying the HA molecule allow product properties to be tailored specifically to multiple uses, including enabling longer residence time to support OA pain management and creating a solid form of HA called HYAFF, which is the platform for our regenerative solutions portfolio.

In early 2020, we expanded our overall technology platform and significantly enhanced our commercial infrastructure, especially in the United States, through our strategic acquisitions of Parcus Medical, LLC, or Parcus Medical, a sports medicine implant and instrumentation solutions provider focused on sports medicine and soft tissue repair, and Arthrosurface, Inc., or Arthrosurface, a company specializing in less invasive, bone preserving partial and total joint replacement solutions.

Through these acquisitions, we have transformed our company.

We expanded our addressable market from the over $1 billion global OA pain management market to the over $8 billion joint preservation market (which includes the faster growing sports medicine and extremities segments), improved our commercial capabilities, and expanded our product pipeline and research and development expertise in our target markets.

As we look towards the future, our business is positioned to capture value within our target market of joint preservation.

We believe our success will be driven by our:

Decades of experience in HA-based regenerative solutions and early intervention orthopedics combined under new, common management with a strong financial foundation for future investment in meaningful solutions for our customers;

Robust network of stakeholders in our target markets to identify evolving unmet patient treatment needs;

Prioritized investment in differentiated research and development programs;

Expansion of our commercial capabilities globally within joint preservation;

Opportunity to pursue strategic inorganic growth opportunities, including potential partnerships and acquisitions, leveraging our strong financial foundation and operational capabilities;

Energized and experienced team focused on strong values, talent, and culture.

Joint Pain Management

Our Joint Pain Management product family consists of:

Monovisc and Orthovisc, our single- and multi-injection, HA-based viscosupplement offerings indicated to provide pain relief from OA conditions.

Our Joint Pain Management products are generally administered to patients in an office setting.

In the United States, Monovisc and Orthovisc are marketed exclusively by DePuy Synthes Mitek Sports Medicine, part of the Johnson & Johnson Medical Companies, or Mitek, and have been the market leaders, based on combined overall revenue in the viscosupplement market since 2018.

Internationally, we market our Joint Pain Management products through a robust and growing worldwide network of commercial distributors.

Cingal, our novel, third-generation, single-injection OA product consisting of our proprietary cross-linked HA material combined with a steroid, is designed to provide both short- and long-term pain relief.

Cingal is CE Mark approved and has been sold outside the United States in over 35 countries through our network of distributors for several years.

In the United States, Cingal is a pipeline product under clinical development;

for additional information please see the section captioned “Item 1.

Research and Development.”

Hyvisc, our high molecular weight injectable HA veterinary product for the treatment of joint dysfunction in horses due to non-infectious synovitis associated with equine OA.

Hyvisc is distributed by Boehringer Ingelheim Vetmedica, Inc., or Boehringer, in the United States.

Joint Preservation and Restoration

Our Joint Preservation and Restoration product family consists of: 

Bone Preserving Joint Technologies .

Our portfolio of more than 150 bone preserving joint technologies, including partial joint replacement, joint resurfacing, and minimally invasive and bone sparing implants, is designed to treat upper and lower extremity orthopedic conditions caused by trauma, injury and arthritic disease.

These products span multiple joints including the shoulder, foot/ankle, wrist, knee and hip and are generally intended to mimic a patient’s natural anatomy to the extent feasible.

These products are often used to treat patients with OA progression beyond where our Joint Pain Management products can allow them to retain an active lifestyle and early surgical intervention becomes preferable.

We commercialize these products in the United States and utilize our distributor network for sales in certain international markets.

Soft Tissue Repair .

Our line of soft tissue repair solutions is used by surgeons to repair and reconstruct damaged ligaments and tendons resulting from sports injuries, trauma and disease.

These more traditional sports medicine solutions include screws, sutures, suture anchors, and other surgical systems that facilitate surgical procedures on the shoulder, knee, hip, upper and lower extremities, and other soft tissues.

We commercialize these products in the United States and utilize our distributor network for sales in over 60 international markets.

Regenerative Solutions .

Our portfolio of orthopedic regenerative solutions based on our proprietary HA and Hyaff technologies, which is a solid form of HA.

These products include Tactoset, an HA-enhanced injectable bone repair therapy designed to treat insufficiency fractures that we commercialize only in the United States, and Hyalofast, a biodegradable support for human bone marrow mesenchymal stem cells used for cartilage regeneration and as an adjunct for microfracture surgery.

Hyalofast is CE Mark approved and currently available in Europe, South America, Asia, and certain other international markets.

In the United States, Hyalofast is a pipeline product under clinical development;

for additional information please see the section captioned “Item 1.

Research and Development.”

Our Other product family consists of legacy HA-based products that do not fit into one of our other primary product categories.

These products include, Hyalobarrier, an anti-adhesion barrier indicated for use after abdomino-pelvic surgeries, and Hyalomatrix, which is used for the treatment of complex wounds such as burns and ulcers, products used in connection with the treatment of ears, nose and throat disorders, and ophthalmic products, including injectable, high molecular weight HA products used as viscoelastic agents in ophthalmic surgical procedures such as cataract extraction and intraocular lens implantation.

Sales Channels

Since our inception in 1992, we historically utilized a commercial partnership model for

the distribution of our products to end-users.

Our strong, worldwide network of distributors has historically provided, and continues

to provide, a solid foundation for our revenue growth and territorial expansion.

In 2019, we implemented a hybrid commercial approach

that balances a small direct model with a network of distributor partners in the U.S.

market, and we utilized this hybrid approach

for the launch of TACTOSET.

The acquisitions of Arthrosurface and Parcus Medical each added to our commercial infrastructure, especially

in the United States.

Arthrosurface has approximately 35 sales representatives and 100 distributors in the U.S., while Parcus Medical

employs a similar, though more mature, model as Anika and has over 50 U.S.

distributors in place.

For products in our Orthopedic Joint Preservation and Restoration

Care family, including those currently in research and development or those not yet developed, we intend to leverage the expanded

hybrid-direct sales infrastructure of the consolidated entity.

This framework pairs an internal direct sales team with external

sales agent partners to maximize territorial coverage and sales generation.

Generally, products within this family are sold into

surgical environments, such as hospitals or ambulatory surgery centers, and we believe that we have a strong infrastructure now

in place to service these customers.

We intend to cross-train the sales staffs to create a consolidated sales structure selling

all of the products within our portfolio.

We also intend to assess each selling territory to maximize our coverage and reach as

many customers and patients as possible.

For longer-term future products in the U.S.

market within our Joint

Pain Management Therapies or Other families, we intend to evaluate our commercial model and possible alternatives or augmentations

in each instance on a case-by-case basis, based on market dynamics and other factors.

These models could include direct sales,

distribution partnerships, or a hybrid of those forms.

For current products in the U.S.

market, we intend to retain our current

distribution relationships, including with Mitek, as they continue to provide meaningful revenue and growth opportunities.

Internationally, we expect to maintain our

current distribution model for the foreseeable future.

Notwithstanding that general expectation, we will evaluate modifications

or possible alternatives to that model on a case-by-case basis based upon market dynamics and resource allocation.

We also intend

to evaluate and synergize our international distributor base to ensure that we maximize our partnerships and grow revenue from

our entire product portfolio.

A substantial majority of our products are used by clinicians and surgeons in one of two environments:

office-based procedures usually focused on injections, or surgical settings, including hospital operating rooms and ambulatory surgery centers, or ASCs.

These settings typically require different commercial approaches and have distinct call points, which requires diversity in our sales approach.

For instance, our Joint Pain Management family and certain products in our Other category are almost entirely utilized in an office-based setting while our Joint Preservation and Restoration products are almost exclusively consumed in hospital operating rooms or ASCs.

As a result of these distinctions, we employ multiple sales models in the United States to ensure that we are meeting the needs of our customers and other healthcare system stakeholders.

For many years, we have maintained a mutually beneficial commercial partnership with Mitek, which sells Orthovisc and Monovisc throughout the United States.

We also have other U.S.

commercial partnerships for certain other products in our Joint Pain Management and Other product families.

Under these commercial partnerships, we sell our products directly to our partners, which perform the vast majority of the downstream sales and marketing activities to customers and end-users.

In addition to a transfer price, we may also structure our arrangements to receive a royalty on end user sales.

Since 2019, and with our expanded commercial infrastructure as a result of the Parcus Medical and Arthrosurface acquisitions, we have sold our Joint Preservation and Restoration family directly to customers, including hospitals and ASCs, through our direct sales representatives and large network of independent third party distributors.

Within this framework, we employ selling models that seek to maximize the benefit for our company and our customers, including contracts with group purchasing organizations and certain fixed-price delivery models.

During 2020, we completed the integration of our U.S.

commercial organization including effecting cross training to sell the consolidated Joint Preservation and Restoration product portfolio.

For business outside of the United States, we market and sell our products using a worldwide network of commercial partners to provide a solid foundation for revenue growth and territorial expansion.

Our relationships with these partners are generally structured such that we sell our products to these partners directly while they, with global support from our team, perform the in-country sales and marketing activities to drive growth and adoption locally.

We expect to generally maintain this model for the foreseeable future, while also selectively evaluating other options and being opportunistic about adopting other models, including direct sales, in certain jurisdictions.

We believe that our overall sales approach provides our business with a strong base to drive revenue growth as we continue to grow and scale our commercial infrastructure while retaining the flexibility in certain circumstances to enter into strategic arrangements to take advantage of the benefits certain other organizations have established for themselves.

We will continue to focus on expanding our own commercial capabilities, including with respect to market access, innovative sales and delivery models, and improved logistics management.

Manufacturing

We manufacture the majority of our

products ourselves at our facilities in Bedford, Massachusetts, where we make the totality of the products associated with

the historic Anika business, and, following our acquisition of Parcus Medical, in Sarasota, Florida, where we make the vast

majority of the historic Parcus Medical finished products.

For the manufacture of the partial and total joint surface

implants and preservation products produced for Arthrosurface, we engage a single third-party organization as a contract

manufacturer.

We manufacture all of our HA-based products, including all of our Joint Pain Management products and certain additional products, at our facility in Bedford, Massachusetts, where we have developed significant know-how around procedures such as homogenized mixing and filling of highly-viscous liquids and manipulation of solid HA into scaffolds or other presentations.

We have a substantial manufacturing presence at our facility in Sarasota, Florida, and we engage third-party organizations as contract manufacturers for a number of our products including our bone preserving joint technologies.

The raw materials necessary to manufacture our products are generally available from multiple sources.

we rely on a small number of suppliers for certain key raw materials and a small number of suppliers for certain other

materials required for the manufacturing and delivery of these products.

However, we rely on a small number of suppliers for certain key raw materials and a small number of suppliers for certain other materials required for the manufacturing and delivery of these products.

Research and Development

Our research and development efforts primarily consist of the development

of new medical applications for our technology platform, the development of intellectual property with respect to our technology

platform, the management of clinical trials for certain product candidates, the preparation and processing of applications for

regulatory approvals, and process development and scale-up manufacturing activities for new and existing products.

Our development

is focused on orthopedic and regenerative medicine, including products for tissue protection, repair, and regeneration.

years ended December 31, 2019, 2018, and 2017, research and development expenses were $16.7 million, $18.2 million, and $18.8 million

respectively.

The decrease in 2019 was mainly due to timing and decision-making regarding our clinical activities.

We anticipate

that we will continue to commit significant resources to, and increase our aggregate spending on, research and development efforts

including new product development, preclinical activities and clinical trials in the future.

Current research and development activities

include clinical trials for CINGAL, a joint pain management therapy composed of our proprietary cross-linked HA material combined

with an approved steroid, and HYALOFAST, an innovative product for cartilage tissue repair, meant to support eventual regulatory

approval for these products in the United States.

In pursuing a U.S.

regulatory pathway for CINGAL, we have conducted two Phase

III clinical trials and two follow-up studies, and the United States Food and Drug Administration, or FDA, has indicated an additional

Phase III trial is necessary to support U.S.

We are currently working to initiate a pilot study to confirm our trial

design, increase our probability of success in a Phase III trial and generate data that ultimately will be needed to support FDA

We remain on track to commence the CINGAL pilot study in the first half of 2020.

We are also conducting a Phase III

trial to support the U.S.

regulatory approval of HYALOFAST.

We expect to complete patient enrollment in the HYALOFAST study by

the end of 2020.

In addition, we are working to expand our

regenerative medicine pipeline with a new product candidate in the form of an implant for rotator cuff repair utilizing our proprietary

solid HA technology, which could be employed to repair partial and full-thickness rotator cuff tears.

We finalized an initial product

prototype, and we are currently performing preclinical testing on the product and developing the surgical instrumentation for the

potential product.

Our research and development efforts primarily consist of the development of new medical applications for our technology platforms, the development of intellectual property with respect to our technology platforms, the management of clinical trials for certain product candidates, the preparation and processing of applications for regulatory clearances and approvals, and process development and scale-up manufacturing activities for our existing and new product development initiatives.

For 2020, 2019, and 2018, research and development expenses were $23.4 million, $16.7 million and $18.2 million respectively.

The increase in 2020 was primarily due to preparation activities and initial execution related to the clinical studies in the United States for Cingal and Hyalofast, certain European post-market clinical studies, and activities associated with new product development in our research and development pipeline, including the acquisitions of Arthrosurface and Parcus Medical in early 2020.

We anticipate that we will continue to commit significant resources to research and development activities, including in relation to new product development, pre-clinical activities and clinical trials.

Our new product development efforts focus on products in four large and growing orthopedic markets to drive long-term growth:

OA pain management, regenerative solutions, soft tissue repair and bone preserving joint technologies.

In order to better inform and target our research and development investment, we routinely interact with key external stakeholders to leverage customer and patient insights in our development process that help ensure we bring needed solutions to the market.

In the near term, our general new product development will be focused on enhancements to existing products, new soft tissue fixation and extremities products like our WristMotion product that recently achieved 510(k) clearance from the U.S.

Food and Drug Administration, or FDA, and clinical development to enable us to commercialize in the U.S.

market our Cingal and Hyalofast products, which are currently sold only outside the United States.

As we move forward, we plan to continue to invest in novel and meaningful products for our target markets based on our core capabilities, including our regenerative HA technology platform and manufacturing expertise.

Our development focus for OA pain management will continue to be on bringing Cingal, our third-generation, single-injection viscosupplement product, to the U.S.

While we have conducted previous clinical trials for Cingal, including a trial that supported CE Mark approval for Cingal, the FDA has indicated an additional Phase III trial is necessary to support U.S.

In 2020, we initiated a pilot study to confirm our trial design to increase our probability of success in a Phase III trial and generate data that ultimately will be needed to support FDA approval.

Several trial sites were activated during 2020, and the first patient was enrolled in the pilot study in September 2020.

However, as a result of the COVID-19 pandemic, we continue to face uncertainty related to the ultimate timing of this Cingal pilot study due to COVID-19-related enrollment challenges.

Given the evolving environment, we will continue to update clinical trial timelines as we have more visibility with respect to the length and regional impacts of the COVID-19 pandemic.

For additional information on the impact of the COVID-19 pandemic on our Cingal pilot study, please refer to the section captioned “Item 1A.

Risk Factors.

Risks related to the COVID-19 Pandemic.

The COVID-19 pandemic could adversely impact our development activities, preclinical studies and clinical trials, which could significantly impair our long-term business plans and operating results.

Development for our Joint Preservation and Restoration family is focused in several areas.

We continue to progress the ongoing clinical trial to support approval in the United States for Hyalofast, our single step cartilage repair therapy, currently sold only outside the United States.

We are actively pursuing multiple solutions to accelerate patient enrollment, including initiating sites in Mexico, Indonesia, and the Philippines which has been delayed due to COVID-19.

We are also focused on the development of additional solutions and line extensions for our soft tissue repair and bone preserving joint technologies business, largely within the faster-growing extremities segments.

These include continued progress on a therapy targeted at rotator cuff repair utilizing our proprietary solid HA technology, as well as other programs that leverage our HA expertise to augment or improve our current offerings.

Intellectual Property

seek patent and trademark protection for our key technology, products and product improvements, both in the U.S.

and in select

foreign countries.

We seek patent and trademark protection for our key technologies, products and product improvements, both in the U.S.

and in select foreign countries.

When determined appropriate, we enforce and plan to enforce and defend our patent and trademark rights.

we rely on our patent and trademark estate to provide us with competitive advantages as it relates to our existing and future product

lines, it is not our sole source of protection.

We also rely upon trade secrets and continuing technological innovations to develop

and maintain our competitive position.

In an effort to protect our trade secrets, we have a policy of requiring our employees,

consultants and advisors to execute proprietary information and invention assignment agreements upon commencement of employment

or consulting relationships with us.

These agreements also provide that all confidential information developed or made known to

the individual during the course of their relationship with us must be kept confidential, except in specified circumstances.

While we rely on our patent and trademark portfolio to provide us with competitive advantages as it relates to our existing and future product lines, it is not our sole source of protection.

We also rely upon trade secrets and continuing technological innovations to develop and maintain our competitive position.

Governmental Regulation

The clinical development, manufacturing,

and marketing of our products are subject to governmental regulation in the United States, the European Union, and other territories

Various statutes, regulations and interpretations thereof, directives, and guidelines, including the Food, Drug, and

Cosmetic Act in the United States, govern the development, design, non-clinical and clinical research, testing, manufacture, safety,

efficacy, labeling, packaging, storage, record keeping, premarket clearance or approval, adverse event reporting, advertising,

and promotion of our products.

Product development and approval within these various regulatory frameworks takes a number of years

and involves the expenditure of substantial resources.

Pharmaceutical and medical device manufacturers are also inspected regularly

by the FDA and other applicable regulatory bodies.

Medical products regulated by the FDA are

generally classified as drugs, biologics, or medical devices, and the current classification standards for our current or future

may be altered over time.

The clinical development, manufacturing, and marketing of our products are subject to governmental regulation in the United States, the European Union, and other territories worldwide.

Various statutes, regulations and interpretations thereof, directives, and guidelines, including the Food, Drug, and Cosmetic Act in the United States, govern the development, design, non-clinical and clinical research, testing, manufacture, safety, efficacy, labeling, packaging, storage, record keeping, premarket clearance or approval, adverse event reporting, advertising, and promotion of our products.

Product development and approval within these various regulatory frameworks can take a number of years and generally involves the expenditure of substantial resources.

Pharmaceutical and medical device manufacturers are also inspected regularly by the FDA and other applicable regulatory bodies.

Medical products regulated by the FDA are generally classified as drugs, biologics, or medical devices, and the current classification standards for our current or future products may be altered over time.

Drugs and biologic products undergo rigorous preclinical testing prior to beginning clinical trials.

Clinical trials for new drugs or biologic products include Phase I trials in healthy volunteers to understand safety, dosage tolerance,

and pharmacokinetics, Phase II trials in a limited patient population to identify initial efficacy and side effects, and Phase

III pivotal trials to statistically evaluate the safety and efficacy of the product.

Medical devices intended for human use are

classified into three categories (Class I, II or III) on the basis of the controls deemed reasonably necessary by the FDA

to assure their safety and effectiveness.

Class II devices are cleared for marketing under the premarket notification 510(k)

regulatory pathway, which may include clinical testing.

Class III devices require pre-market approval based on valid scientific

evidence of safety and effectiveness, including evidence elicited through appropriate clinical testing.

The failure to adequately

demonstrate the quality, safety, and efficacy of a product under development can delay or prevent regulatory approval of the product.

In order to gain marketing approval, we must submit to the relevant regulatory authority for review information on the quality

aspects of the product as well as the non-clinical and clinical data.

Clinical trials for new drugs or biologic products include Phase I trials in healthy volunteers to understand safety, dosage tolerance, and pharmacokinetics, Phase II trials in a limited patient population to identify initial efficacy and side effects, and Phase III pivotal trials to statistically evaluate the safety and efficacy of the product.

Medical devices intended for human use are classified into three categories (Class I, II or III) on the basis of the controls deemed reasonably necessary by the FDA to assure their safety and effectiveness.

Class II devices are cleared for marketing under the pre-market notification 510(k) regulatory pathway, which may include clinical testing.

Class III devices require pre-market approval based on valid scientific evidence of safety and effectiveness, including evidence elicited through appropriate clinical testing.

The failure to adequately demonstrate the quality, safety, and efficacy of a product under development can delay or prevent regulatory approval of the product.

In order to gain marketing approval, we must submit to the relevant regulatory authority for review information on the quality aspects of the product as well as the non-clinical and clinical data.

The FDA undertakes this review in the United States.

In the European Union, medical devices must

be CE Marked in order to be marketed.

CE marking a device involves working with a Notified Body, and in some cases a Competent

Authority, to demonstrate that the device meets all applicable requirements of the Medical Devices Directive and that our Quality

Management System is compliant.

In the European Union, medical devices must be CE Marked in order to be marketed.

CE marking a device involves working with a Notified Body, and in some cases a Competent Authority, to demonstrate that the device meets all applicable requirements of the Medical Devices Directive and that the Quality Management System is compliant.

Europe’s Medical Device Directive, or MDD, is being replaced by the European Medical Device Regulation, or MDR, enacted in 2017, and due for implementation in May 2021.

MDR requirements will phase in on a product-by-product basis as certifications under MDD lapse and will require all products to undergo review and approval under these new regulations, which will generally require increased levels of clinical support as compared to MDD requirements.

Drug approval in the European Union follows one of several possible processes:

(i) a centralized

procedure involving members of the European Medicines Agency’s Committee for Medicinal Products for Human Use;

(ii) a “mutual

recognition procedure” in which an individual country's regulatory agency approves the product followed by “mutual

recognition” of this approval by regulatory agencies of other countries;

or (iii) a decentralized procedure in which the

approval is sought through the regulatory agencies of multiple countries at the same time.

Approval timelines can range from several

months to several years, or applications can be denied entirely.

Product or product component classifications as drugs, biologics,

or medical devices may change over time due to new regulations or augmented interpretation of data or current regulations.

approval process can be affected by a number of factors.

For example, additional studies or clinical trials may be requested during

the review, which may delay marketing approval and involve unbudgeted costs.

As a condition of approval, the regulatory agency

may require post-marketing surveillance to monitor for adverse effects, and may require other additional studies, as it deems appropriate.

After approval for an initial indication, further clinical studies are generally necessary to gain approval for any additional

The terms of any approval, including labeling content, may be more restrictive than expected and could affect the

marketability of a product.

The FDA has broad regulatory compliance

and enforcement powers.

If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety

of compliance or enforcement actions, including, without limitation, issuing an FDA Form 483 notice of inspectional observations

or a warning letter, imposing civil money penalties, suspending or delaying issuance of approvals, requiring product recall, imposing

a total or partial shutdown of production, withdrawal of approvals or clearances already granted, pursuing product seizures, consent

decrees or other injunctive relief, or criminal prosecution through the Department of Justice.

The FDA can also require us to repair,

replace, or refund the cost of products that we manufactured or distributed.

Outside the United States, regulatory agencies may

exert a range of similar powers.

(i) a centralized procedure involving members of the European Medicines Agency’s Committee for Medicinal Products for Human Use;

(ii) a “mutual recognition procedure”

in which an individual country's regulatory agency approves the product followed by “mutual recognition”

of this approval by regulatory agencies of other countries;

or (iii) a decentralized procedure in which the approval is sought through the regulatory agencies of multiple countries at the same time.

Approval timelines can range from several months to several years, or applications can be denied entirely.

Product or product component classifications as drugs, biologics, or medical devices may change over time due to new regulations or augmented interpretation of data or current regulations.

The approval process can be affected by a number of factors.

For example, additional studies or clinical trials may be requested during the review, which may delay marketing approval and involve unbudgeted costs.

As a condition of approval, the regulatory agency may require post-marketing surveillance to monitor for adverse effects, and may require other additional studies, as it deems appropriate.

After approval for an initial indication, further clinical studies are generally necessary to gain approval for any additional indications.

The terms of any approval, including labeling content, may be more restrictive than expected and could affect the marketability of a product.

The FDA has broad regulatory compliance and enforcement powers.

If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, including, without limitation, issuing an FDA Form 483 notice of inspectional observations or a warning letter, imposing civil money penalties, suspending or delaying issuance of approvals, requiring product recall, imposing a total or partial shutdown of production, withdrawal of approvals or clearances already granted, pursuing product seizures, consent decrees or other injunctive relief, or criminal prosecution through the Department of Justice.

The FDA can also require us to repair, replace, or refund the cost of products that we manufactured or distributed.

Outside the United States, regulatory agencies may exert a range of similar powers.

We are subject to various U.S.

and state laws pertaining to healthcare fraud and abuse, including anti-kickback and false claims laws.

Similar review and regulation

of advertising and marketing practices exists in the other geographic areas where we operate.

We are also subject to various laws and

regulations concerning data privacy in the United States, Europe, and elsewhere, including the European Union of the General Data

Protection Regulation (“GDPR”).

These regulations impose several requirements on the processing, administration, security,

and confidentiality of personal data.

These regulations empower enforcement agencies to impose large penalties for noncompliance.

federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback, false claims, and transparency reporting laws.

Similar review and regulation of advertising and marketing practices exists in the other geographic areas where we operate.

We are also subject to various laws and regulations concerning data privacy in the United States, Europe, and elsewhere, including the General Data Protection Regulation (“GDPR”) in the European Union.

These regulations impose several requirements on the processing, administration, security, and confidentiality of personal data and empower enforcement agencies to impose large penalties for noncompliance.

Environmental Laws

We believe that we are in compliance with

all foreign, federal, state, and local environmental regulations with respect to our manufacturing facilities.

The cost of ongoing

compliance with such regulations does not have a material effect on our operations.

We compete with many companies including

large pharmaceutical firms and specialized medical device companies across all of our product lines.

For our Joint Pain Management

Therapies products, our principal competitors are Sanofi Genzyme, Zimmer Biomet, Inc., Bioventus LLC, and Ferring Pharmaceuticals.

Following our acquisitions of Arthrosurface and Parcus Medical, our key competitors for our Orthopedic Joint Preservation and

Restoration Care products include Arthrex, Inc., Smith & Nephew P.l.c., Integra LifeSciences, Inc., Stryker Corporation, Wright

Medical Group N.V., Zimmer Biomet, Inc., and CONMED Corporation.

Many of these companies have substantially greater financial

resources, larger research and development staffs, more extensive marketing and manufacturing organizations, and more experience

in the regulatory processes than we have.

We also compete with academic institutions, government agencies, and other research

organizations, which may be involved in the research and development and commercialization of products.

Many of our competitors

also compete against us in securing relationships with collaborators for their research and development and commercialization

We compete with other market participants

primarily on the efficacy of our products, our products’ reputation for safety, and the breadth of our sports and regenerative

medicine product portfolio.

Other factors that impact competition in our industry are the timing and scope of regulatory approvals,

the availability of raw material and finished product supply, marketing and sales capability, reimbursement coverage, product pricing,

and patent protection.

Some of the principal factors that may affect our ability to compete in the sports and regenerative medicine

development and commercialization markets include:

We believe that we are in compliance with all foreign, federal, state, and local environmental regulations with respect to our manufacturing facilities.

The cost of ongoing compliance with such regulations does not have a material effect on our operations. 

We compete with many companies including large pharmaceutical firms and large and specialized medical device companies across our product lines.

For our Joint Pain Management products, our principal competitors include Sanofi Genzyme, Zimmer Biomet, Inc., Bioventus Inc., and Ferring Pharmaceuticals, as well as other companies that are commercializing or developing competitive products.

Our key competitors for our Joint Preservation and Restoration products include Arthrex, Inc., the DePuy Synthes Companies of Johnson & Johnson, Smith & Nephew PLC., Stryker Corporation, and Zimmer Biomet, Inc., as well as certain smaller organizations that focus on subsets of the larger industry.

Many of these companies have substantially greater financial resources, larger research and development staffs, more extensive marketing and manufacturing organizations, and more experience in the regulatory processes than we have.

We also compete with academic institutions, government agencies, and other research organizations that may be involved in the research and development and commercialization of products.

Many of our competitors also compete against us in securing relationships with collaborators for their research and development and commercialization programs.

We compete with other market participants primarily on the efficacy of our products, our products’

reputation for safety, and the breadth of our overall product portfolio.

Other factors that impact competition in our industry are the timing and scope of regulatory approvals, the availability of raw material and finished product supply, marketing and sales capability, reimbursement coverage, product pricing, and patent protection.

Some of the principal factors that may affect our ability to compete in our target markets include:

The quality and breadth of our continued development of our product portfolio;

Our ability to complete successful clinical studies and obtain FDA marketing and foreign regulatory approvals prior to our competitors;

Our ability to build our commercial infrastructure, integrate our sales channels and execute our sales strategies;

The execution by our key partners of their commercial

strategies for our products and our ability to manage our relationships with those key partners;

Our ability to continue to build our commercial infrastructure, integrate our sales channels and execute our sales strategies;

The execution by our key partners of their commercial strategies for our products and our ability to manage our relationships with those key partners;

Our ability to recruit and retain skilled employees;

The availability of capital resources to fund strategic activities related to the significant expansion of our business or product portfolio, including through acquisitions of third parties or certain assets.

We are aware of a number of companies that

are developing and/or marketing competitive products.

In some cases, competitors have already obtained product approvals, submitted

applications for approval, or commenced human clinical studies, either in the United States or in certain foreign countries.

products face substantial competition.

There exist major worldwide competing products for use in joint pain management,

orthopedic joint preservation and restoration, surgical adhesion prevention, advanced wound care, ENT, cosmetic dermatology, ophthalmic

surgery, and the treatment of equine osteoarthritis.

There is a risk that we will be unable to compete effectively against our

current or future competitors.

Additionally, legislation and regulation aimed at curbing rising healthcare costs has resulted in

a consolidation trend in the healthcare industry to create larger companies, including hospitals, with greater market power.

turn, this has led to greater and more intense competition in the provision of products and services to market participants.

market makers, like group purchasing organizations and integrated delivery networks, have increased their negotiating leverage,

and if these market makers demand significant price concessions or if we are excluded as a supplier by these market makers, our

product revenue could be adversely impacted.

As of December 31, 2019, we had 154

employees, 128 of whom were located in the United States, 22 of whom were located in Italy, and 4 of whom were located in the

United Kingdom.

We consider our relations with our employees to be good.

None of our U.S.

employees are represented by labor

unions, but certain employees based in Italy are represented by unions, adding complexity and additional risks to the wage and

employment decision processes.

 We are aware of a number of companies that are developing and/or marketing competitive products.

In some cases, competitors have already obtained product approvals, submitted applications for approval, or commenced human clinical studies, either in the United States or in certain foreign countries.

All products face substantial competition.

There is a risk that we will be unable to compete effectively against our current or future competitors.

Additionally, legislation and regulation aimed at curbing rising healthcare costs has resulted in a consolidation trend in the healthcare industry to create larger companies, including hospitals, with greater market power.

In turn, this has led to greater and more intense competition in the provision of products and services to market participants.

Important market makers, like group purchasing organizations and integrated delivery networks, have increased their negotiating leverage, and if these market makers demand significant price concessions or if we are excluded as a supplier by these market makers, our product revenue could be adversely impacted.

Our business is generally not seasonal in nature due to the nature of our product mix and sales channels and strategies.

Human Capital Management

We believe that creating a diverse, talented, and inclusive workplace is a central aspect to our culture, employee engagement, innovation, operational excellence and overall performance.

In turn, this culture and drive for performance is an important factor in our ability to attract and retain qualified employees and key talent.

Our culture is centered around our fundamental values of:

we engage and invest in each other in a community that values diversity and inclusion.

we are agile and entrepreneurial in developing and delivering meaningful solutions to our healthcare stakeholders within our target markets.

we strive for the highest quality and compliance in everything we do.

we operate with mutual respect and trust and are collaborative as we grow together.

we live up to our promises and do the right thing, every day.

Accountability :

we are empowered and accountable to deliver results and value to all of our stakeholders.

Our industry requires complex processes for product development and commercialization, each of which requires deep expertise and experience across a broad array of disciplines.

Medical device companies therefore compete for a limited number of qualified applicants to fill specialized positions, which requires competitive compensation and benefits packages and an attractive culture, among other things.

As of December 31, 2020, we employed 277 fulltime employees at four physical facilities primarily located in Bedford, Massachusetts;

Franklin, Massachusetts;

Sarasota, Florida;

and Padova, Italy.

The Franklin and Sarasota sites were added in 2020 as a result of acquisitions of Arthrosurface and Parcus Medical, respectively.

We grew our employee base by 145 people in 2020, 75 of which were a direct result of the companies we acquired.

Twenty-five of our employees are located outside the United States.

We expect to continue to add employees in 2021 and beyond as we grow our business.

To attract and retain qualified employees and key talent, we offer total rewards packages to every employee consisting of base salary, a potential cash bonus based on individual and company performance, and a comprehensive benefit package, as well as equity compensation for certain employees based on various criteria including their level within the company.

Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility.

A large number of our employees have obtained advanced degrees in their professions.

We support our employees’

further development with individualized development plans, mentoring, coaching, group training, conference attendance and financial support, including tuition reimbursement.

We believe that employees understanding how their work contributes to our overall strategy and performance is key to our success.

In order to communicate with respect to these important topics in manners that are engaging to our team, we utilize a variety of channels, including all employee town hall meetings with senior management, regular email updates from our chief executive officer and other key members of the executive team, and employee engagement surveys.

As a result of the COVID-19 pandemic, we have augmented certain of our normal business practices to ensure that we promote health and safety for our employees.

We have established safety policies and protocols, and we regularly update our employees with respect to any changes.

We transitioned much of our administrative workforce to work remotely in order to prioritize the health of those who must be onsite to perform their jobs, including our manufacturing staff, and we have adjusted attendance policies to encourage those who may be ill to stay home.

We have provided an abundance of personal protective equipment and cleaning supplies.

We require masks to be worn in our facilities and have prohibited all non-essential domestic and international travel for all employees.

We have also provided general information updates and support for our employees to ensure that they have resources and information to protect their health and that of those around them, including their families and co-workers.

Product Liability

The testing, marketing, and sale of human

health care products entails an inherent risk of allegations of product liability, and we cannot assure that substantial product

liability claims will not be asserted against us.

Although we have not received any material product liability claims to date and

generally have coverage under our insurance policy of $5.0 million per occurrence and $5.0 million in the aggregate, we cannot

assure that if material claims arise in the future, our insurance will be adequate to cover all situations.

Moreover, we cannot

assure that such insurance, or additional insurance, if required, will be available in the future or, if available, will be available

on commercially reasonable terms.

Any product liability claim, if successful, could have a material adverse effect on our business,

financial condition, and results of operations.

The testing, marketing, and sale of human health care products entail an inherent risk of allegations of product liability, and we cannot assure that substantial product liability claims will not be asserted against us.

Although we have not received any material product liability claims to date, we cannot assure that if material claims arise in the future, our insurance will be adequate to cover all situations.

Moreover, we cannot assure that such insurance, or additional insurance, if required, will be available in the future or, if available, will be available on commercially reasonable terms.

Any product liability claim, if successful, could have a material adverse effect on our business, financial condition, and results of operations.

Available Information

We are required to file annual, quarterly

and current reports, proxy statements and other information with the SEC.

The SEC maintains a website at www.sec.gov that contains

reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Our Annual Reports on Form 10-K, Quarterly

Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and other information, including amendments and

exhibits to such reports, filed or furnished pursuant to the Securities Exchange Act of 1934 are available free of charge in the

“SEC Filings” section of our website located at http://www.anikatherapeutics.com, as soon as reasonably practicable

after the reports are electronically filed with or furnished to the SEC.

The information on our website is not part of this Annual

Report on Form 10-K.

We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and other information, including amendments and exhibits to such reports, filed or furnished pursuant to the Securities Exchange Act of 1934 are available free of charge in the “SEC Filings”

section of our website located at http://www.anika.com, as soon as reasonably practicable after the reports are electronically filed with or furnished to the SEC.

The information on our website is not part of this Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business