What changed in this filing

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Item 1. Business

2025-03-17 compared with 2024-03-15 · 317 added, 294 removed, 91 unchanged (87% of the section changed)

Purpose and Mission

Founded in 1992, Anika Therapeutics, Inc.

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, or OA pain management, regenerative solutions, sports medicine and Arthrosurface joint solutions (previously Bone Preserving Joint Solutions).

We have over 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 some of our regenerative solutions portfolio.

In early 2020, we expanded our overall technology platform, product portfolio, and significantly increased our commercial infrastructure, especially in the United States, through our strategic acquisitions of Parcus Medical, LLC, or Parcus Medical, a sports medicine and instrumentation solutions provider, and Arthrosurface, Inc., or Arthrosurface, a company specializing in bone preserving partial and total joint replacement solutions.

These acquisitions have ignited the transformation of our company by augmenting our HA-based OA pain management and regenerative products with a broad suite of products and capabilities focused on early intervention joint preservation primarily in upper and lower extremities such as shoulder, foot/ankle, knee and hand/wrist.

Illustration of available treatments does not reflect Anika ’ s full product portfolio

Beginning in 2020, we launched our transformational strategy to diversify our revenue in the global joint preservation markets, expanding our addressable global market from the over $1 billion global OA pain management market to the over $8 billion global joint preservation market (which includes faster growing regenerative medicine, sports medicine and extremities segments).

This multi-year journey, which accelerated with the acquisitions of Arthrosurface and Parcus Medical, through which we entered into the sports medicine and bone preserving joint technology markets with a hybrid direct sales model that also expanded the commercial capabilities for our regenerative solutions portfolio, leverages our existing leadership position and expertise in the HA-based OA pain management market, and has included strengthening our team and infrastructure with investments in people, systems and processes.

The combination of Anika with Arthrosurface and Parcus Medical enhances the value to the clinician and their patient through a unique product portfolio suited to early intervention orthopedics that leverages HA’s regenerative attributes for natural, faster healing.

In the upcoming years, we will continue to invest in our research and development pipeline and strengthen our commercial capabilities to position our product portfolio for the needs of clinicians that practice in ambulatory surgical centers, or ASCs, and hospitals, as well as expand into new geographic areas to drive accelerated growth and profitability.

As our pipeline evolves, we intend to expand our HA expertise by selectively developing and offering solutions for joint preservation and regenerative solutions targeted at procedures that are performed in the ASCs and to focus on completing clinical development for key products we sell outside the United States, (i.e.

Cingal and Hyalofast), to gain approval for entry into the large U.S.

As we look forward, our business is positioned to capture value within our target markets in joint preservation.

We believe our future success will be driven by our:

Over 30 years of experience in HA-based regenerative solutions and early intervention orthopedics combined under new seasoned leadership with a strong financial foundation for future investment in meaningful solutions for our customers and their patients;

Utilizing HA-based technology and manufacturing expertise to provide new and differentiated solutions in next generation OA Pain Management and regenerative solutions markets;

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

Prioritized investment in differentiated pipeline of regenerative solutions, bone preserving implants and sports medicine solutions;

Global commercial expertise, which we will leverage to drive growth across our product portfolio, including an intentional site of care focus in ASCs in the United States and continued international expansion;

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

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

OA Pain Management

Our OA Pain Management product family consists of:

Monovisc and Orthovisc, our single- and multi-injection, HA-based viscosupplement product offerings indicated to provide pain relief from OA conditions solely for use in the knee.

(“Anika” or “Company”) is a global leader in the OA Pain Management and regenerative solutions space, focusing on early intervention orthopedics.

The Company leverages proprietary hyaluronic acid (“HA”) technology to develop highly differentiated products.

Driven by strong partnerships with physicians, Anika is dedicated to pioneering HA-based innovations that redefine orthopedic care.

Our mission is to restore active living, empower surgeon choice, and enhance patient outcomes worldwide.

Anika ’ s Mission:

“Powered by our passionate team, we partner with clinicians to create and provide meaningful advancements in early intervention orthopedic care.

We are unwavering in our commitment to quality and compliance as we develop and commercialize solutions that restore active living for people around the world.”

Anika ’ s Core Values:

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

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

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

We are agile and entrepreneurial in developing and delivering meaningful solutions.

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

Accountability:

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

In October 2024, we announced a strategic shift to concentrate on our OA Pain Management and Regenerative Solutions portfolios.

This strategic decision involved the sale of Arthrosurface Incorporated on October 31, 2024 and the sale of Parcus Medical, LLC on March 7, 2025, both of which were acquired in early 2020 under a previous management strategy.

As we look ahead, our focused strategy, driven by HA-based products, positions us to offer truly innovative treatments in areas of unmet need and substantial, growing markets.

We will place particular emphasis on the commercial execution and adoption of the newest product in our Regenerative Solutions portfolio, the Integrity Implant System (“Integrity”), a HA-based scaffold designed for rotator cuff and other tendon repairs.

The Integrity system has shown strong performance, with over 40% sequential growth in surgeries and significant adoption by new customers.

We will continue to invest in our Regenerative Solutions R&D pipeline as we prepare for the U.S.

approval and launch of both Hyalofast and Cingal, each representing an incremental U.S.

addressable market of at least $1 billion.

Hyalofast is on track for a U.S.

launch by 2026, and we have submitted the first two modules of our premarket approval (“PMA”) application with the FDA.

Additionally, we will build on the international commercial momentum of our entire OA Pain Management portfolio, led by Monovisc and Cingal.

Cingal has shown significant clinical success and is progressing towards a New Drug Application (“NDA”) filing in the U.S.

On October 31, 2024 (the “Arthrosurface Closing Date”), we completed the sale of all outstanding equity interests (the “Arthrosurface Transaction”) of Arthrosurface Incorporated, a Delaware corporation and former wholly-owned subsidiary of the Company (“Arthrosurface”), which held our Arthrosurface asset group, to Phoenix Brio, Incorporated, a Delaware corporation (“Phoenix Brio”), pursuant to the terms and conditions of a Share Purchase Agreement, dated as of the Arthrosurface Closing Date (the “Arthrosurface Purchase Agreement”), by and amongst us, Arthrosurface, and Phoenix Brio.

As consideration for the Arthrosurface Transaction, at the closing, Phoenix Brio delivered to us a ten-year non-interest bearing promissory note in the principal amount of $7.0 million.

Under the terms of the Purchase Agreement, we are also eligible to receive:

(i) for each calendar quarter, an amount equal to a percentage of the net sales (the “Revenue Payments”) for the sale of certain commercial and pipeline products during the period commencing on the Closing Date and ending on the earlier of the fifth (5th) anniversary of the Closing Date or the date on which the Buy-Out Payment (as defined below) is paid to us;

and (ii) a percentage of the gross proceeds with respect to the sale of certain commercial and pipeline products in a bona fide arm’s length transaction with a third party that is not an affiliate of Phoenix Brio or us occurring within the first twenty-four (24) months following the Closing Date.

Phoenix Brio can also elect to make a payment in an amount equal to the greater of (A) $14.0 million or (B) ten (10) times the Revenue Payments ((A) and (B) together, the “Buy-Out Payment”) paid to us during the last full calendar year prior to the consummation of a change of control transaction or Phoenix Brio’s written notice to us that it is electing to make the Buy-Out Payment.

Pursuant to the Arthrosurface Purchase Agreement, the aggregate consideration is subject to customary post-closing adjustments.

On March 7, 2025 (the “Parcus Closing Date”), we completed the sale of all of the outstanding equity interests of Parcus Medical, LLC, a Wisconsin limited liability company and former wholly-owned subsidiary of the Company (“Parcus”), to Medacta Americas Manufacturing, Inc., a Delaware corporation (“Medacta”), pursuant to the terms and conditions of a Membership Interest Purchase Agreement, dated as of the Closing Date (the “Parcus Purchase Agreement”), by and among the Company, Parcus and Buyer (the “Transaction”).

As consideration for the Transaction, at closing, Medacta made a payment of $4.5 million in cash.

Pursuant to the Parcus Purchase Agreement, the aggregate consideration is subject to customary post-closing adjustments.

Products and Services

Anika provides a broad array of products and services, including:

Osteoarthritis ( “ OA ” ) Pain Management :

Orthovisc, Monovisc, and Cingal.

Monovisc and Orthovisc are our single- and multi-injection, HA viscosupplement products indicated for pain relief from OA conditions.

Labeling in the United States limits their use to the knee exclusively, while labeling outside the U.S.

is broader, providing expanded therapeutic options beyond the knee to include anatomies such as the shoulder, hip, and ankle.

Our OA 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.

In December 2011, we entered into a fifteen-year licensing agreement with Mitek to exclusively market Monovisc in the United States through December 2026.

In the United States, Monovisc and Orthovisc are marketed exclusively by J&J MedTech.

In December 2011, we entered into a fifteen-year licensing agreement with J&J MedTech to exclusively market Monovisc in the United States through December 2026.

In December 2003, we entered into a ten-year licensing agreement to exclusively market Orthovisc in the United States.

Mitek extended this agreement for additional five-year terms in 2007, 2012, 2017 and most recently in August 2022.

The current agreement expires in December 2028 unless extended at the option of Mitek.

The Monovisc and Orthovisc products have been the market leaders, based on combined overall revenue in the viscosupplement market, since 2018.

Internationally, we market our OA Pain Management products directly through a worldwide network of commercial distributors.

Cingal, our novel, next-generation, non-opioid, single-injection OA Pain Management product consisting of our proprietary cross-linked HA material combined with a fast-acting steroid, designed to provide both short- and long-term pain relief.

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

In the United States, Cingal is a pipeline product in which we are awaiting feedback from the FDA on proposed non-clinical next steps for U.S.

J&J MedTech extended this agreement for additional five-year terms in 2007, 2012, 2017, and most recently in August 2022.

The current agreement expires in December 2028 unless extended at the option of J&J MedTech.

Monovisc and Orthovisc have been market leaders, based on combined overall revenue in the viscosupplement market, since 2018.

Despite recent competitive pricing pressures and reduced market access, Monovisc and Orthovisc remain market leaders in the U.S.

OA Pain Management market.

Internationally, we market our OA Pain Management products directly through a worldwide network of commercial distributors, and our international sales team has successfully expanded into new countries, driving double-digit growth in recent years.

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

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

Cingal is not currently approved for commercial use in the United States.

We have been actively engaging with the FDA on next steps for U.S.

regulatory approval.

We have made significant progress in addressing the FDA's requirements for Cingal's approval.

In April 2023, we held a Type-C meeting with the FDA, which led to an advice letter received from the FDA in April 2024.

The letter included positive feedback and new challenges that we are actively addressing.

We also received confirmation that the clinical data for Cingal is a review issue and not a filing issue.

Additionally, in September 2024, we acquired the Aristospan NDA, which allowed us to address a recent FDA requirement and will enable us to source the reference drug for a bioequivalence study.

We had another Type-C meeting with the FDA in February 2025 to discuss finalizing NDA submission requirements.

We are committed to bringing this revolutionary pain management therapy to the approximate $1 billion U.S.

addressable market.

For additional information, please see the section captioned “Item 1.

Business—Research and Development.”

Joint Preservation and Restoration

Our Joint Preservation and Restoration product family, consists of:

Regenerative Solutions :

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

These products include:

Tactoset Injectable Bone Substitute, an HA-enhanced injectable bone repair therapy designed to treat insufficiency fractures and for augmenting hardware fixation, such as suture anchors;

Integrity Implant System, or Integrity, an HA-based scaffold with bone and tendon fixation components and arthroscopic delivery instruments that is designed to protect an injured tendon and promote healing in rotator cuff repair and other tendon procedures and received clearance by the FDA in August 2023 for commercial use in the United States and initiated limited market release in November 2023;

and Hyalofast, a biodegradable support for human bone marrow mesenchymal stem cells used for cartilage regeneration and as an adjunct for microfracture surgery.

Tactoset and Integrity are commercialized principally in the United States, whereas Hyalofast is currently available outside the United States in over 30 countries within Europe, South America, Asia, and certain other international markets.

In the United States, Hyalofast is a pipeline product under a pivotal Investigational Device Exemption, or IDE, clinical trial and is not available for commercial sale.

Integrity, Hyalofast, and Tactoset.

Integrity is an HA-based scaffold with bone and tendon fixation components and arthroscopic delivery instruments.

It is designed to protect injured tendons and promote healing in rotator cuff repair and other tendon procedures.

Integrity received FDA clearance for commercial use in the United States in August 2023 and we initiated a limited market release in November 2023.

Since its launch, Integrity has shown strong performance, with over 40% sequential growth in surgeries and significant adoption by new customers.

The system competes in a U.S.

tendon augmentation market estimated to be more than $220 million annually.

Hyalofast is a 100% HA resorbable scaffold used for single stage cartilage regeneration.

While Tactoset and Integrity are commercialized principally in the United States, Hyalofast is currently available outside the United States in over 30 countries within Europe, South America, Asia, and certain other international markets.

In the United States, Hyalofast is a pipeline product under a pivotal Investigational Device Exemption (“IDE”) clinical trial and is not available for commercial sale.

We have filed the first and second modules of its PMA with the FDA, and the product is on track for a U.S.

launch by 2026.

For additional information, please see the section captioned “Item 1.

Business—Research and Development.”

Sports Medicine .

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, grafts and other surgical systems that facilitate surgical procedures on the shoulder, knee, hip, upper and lower extremities, and other soft tissues.

Our X-Twist Fixation System using PEEK (Polyetheretherketone) material, was fully launched in early 2023 for broad market use in the United States and certain international markets, is a platform of knotless and knotted suture anchors designed for soft tissue repairs in the shoulder and other extremities.

X-Twist Biocomposite, the bioabsorbable version of the X-Twist fixation system, received FDA clearance in August 2023 and launched in early 2024.

Arthrosurface Joint Solutions .

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

These products span multiple joints including OVOMotion with Inlay Glenoid for the shoulder, WristMotion wrist arthroplasty system, as well as foot and ankle, and knee products generally intended to restore a patient’s natural anatomy and movement.

Our recently launched RevoMotion Reverse Shoulder Arthroplasty System, is a differentiated reverse shoulder implant system addressing the largest portion of the shoulder replacement market.

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

We currently commercialize our Joint Preservation and Restoration products in the United States by selling to hospitals and ASCs, through an independent network of sales representatives and distributors, and utilize our distributor network for sales in certain international markets.

Non-Orthopedic

Tactoset Injectable Bone Substitute is an HA-enhanced injectable bone repair therapy designed to treat insufficiency fractures and augment hardware fixation, such as suture anchors.

Listed below are the key product drivers to our business

Non-Orthopedic Products :

Hyvisc, Hyalobarrier, Anikavisc, Nuvisc

Our Non-Orthopedic product family consists of legacy HA-based products that are marketed principally for non-orthopedic applications.

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Hyalobarrier, an anti-adhesion barrier indicated for use after abdominal-pelvic surgeries;

Hyalomatrix, used for the treatment of complex wounds such as burns and ulcers, as well as products used in connection with the treatment of ears, nose and throat disorders, and ophthalmic products, including injectable, high molecular weight HA products such as Anikavisc and Nuvisc, used as viscoelastic agents in ophthalmic surgical procedures such as cataract extraction and intraocular lens implantation.

and ophthalmic products, including injectable, high molecular weight HA products such as Anikavisc and Nuvisc, used as viscoelastic agents in ophthalmic surgical procedures such as cataract extraction and intraocular lens implantation.

These Non-Orthopedic products are sold through commercial sales and marketing partners around the world.

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

office-based procedures usually focused on injections, hospital operating rooms and ASCs, which are clinics outside of a normal hospital setting that are often at least partially physician-owned.

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

For instance, our OA Pain Management product family and certain products in our Non-Orthopedic category are almost entirely utilized in an office-based setting while our Joint Preservation and Restoration and certain of our Non-Orthopedic 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 Monovisc and Orthovisc in the United States.

For this arrangement with Mitek, we sell the Monovisc and Orthovisc products that we manufacture to Mitek, and we also receive from Mitek a royalty on their end user sales of these products in the United States.

commercial partnerships for other products in our OA Pain Management and Non-Orthopedic product families.

Under these commercial partnerships, we sell our products directly to our partners, who perform downstream sales and marketing activities to customers and end-users.

office-based procedures, hospital operating rooms, and ambulatory surgery centers (“ASCs”).

Office-based procedures usually focus on injections, while ASCs are clinics outside of a normal hospital setting, often at least partially physician-owned.

These medical care delivery environments typically require different commercial approaches and have distinct call points, necessitating diversity in our sales strategy.

For instance, our OA Pain Management product family and certain products in our Non-Orthopedic category are almost entirely utilized in an office-based setting, while our Regenerative Solutions and certain other products in our Non-Orthopedic category are almost exclusively used 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 meet the needs of our customers and other healthcare system stakeholders.

For many years, we have maintained a mutually beneficial commercial partnership with J&J MedTech, which sells Monovisc and Orthovisc in the United States.

In this arrangement, we sell the Monovisc and Orthovisc products that we manufacture to J&J MedTech, and we also receive a royalty from J&J MedTech on their end-user sales of these products in the United States.

commercial partnerships for other products in our Non-Orthopedic product families.

Under these partnerships, we sell our products directly to our partners, who perform 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.

With our expanded commercial infrastructure as a result of the Parcus Medical and Arthrosurface acquisitions, we sell our Joint Preservation and Restoration family directly to clinicians, including hospitals and ASCs, through a hybrid approach with our Anika sales team and large network of independent third-party distributors.

Following the acquisitions, we integrated our U.S.

commercial organization, including cross training our sales team to sell the consolidated Joint Preservation and Restoration product portfolio.

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

Outside of the United States, we market and sell our products using a worldwide network of commercial partners to provide a solid foundation for future 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 of our products locally.

In the U.S., we sell our Regenerative Solutions portfolio directly to clinicians, including hospitals and ASCs, through a hybrid approach involving our Anika sales team and a large network of independent third-party distributors.

We employ selling models that seek to maximize benefits for our company and customers, including contracts with group purchasing organizations and certain fixed-price delivery models.

This approach has proven effective, as evidenced by the strong performance of products like the Integrity Implant System, which has seen significant adoption and growth.

Outside of the United States, we market and sell our products using a worldwide network of commercial distributors, providing a solid foundation for future revenue growth and territorial expansion.

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

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

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.

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

This strategy is expected to enhance our ability to deliver value to our shareholders and meet the needs of our diverse customer base.

Manufacturing

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

We manufacture much of our sports medicine soft tissue repair products at our facility in Sarasota, Florida and we manufacture our bone preserving joint products and certain elements of our soft tissue repair portfolio utilizing third-party contract manufacturing organizations.

We manufacture all of our HA-based products, including our OA Pain Management and Regenerative Solutions products, as well as certain additional products, at our facility in Bedford, Massachusetts.

Here, we have developed significant manufacturing expertise in procedures such as homogenized mixing and filling of highly viscous liquids and creation and manipulation of solid HA into scaffolds or other fiber-based presentations.

To support higher expected output of OA Pain Management and Regenerative Solutions products, we are investing in our Bedford manufacturing facility.

This investment is part of our broader strategy to enhance our manufacturing capabilities and ensure we can meet the growing demand for our innovative products.

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

However, we rely on a small number of suppliers for certain key raw materials and other components, parts and disposables required for the manufacturing and delivery of these products, Any prolonged interruption of operations or significant reduction in the capacity or performance capability of any of our manufacturing facilities, or with any of our key suppliers, could have a material adverse effect on our operations.

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

Any prolonged interruption of operations or significant reduction in the capacity or performance capability of any of our manufacturing facilities, or with any of our key suppliers, could have a material adverse effect on our operations.

Research and Development

Our research and development efforts consist of the development of new medical applications that address true unmet needs that leverage our technology platforms, including new implant designs, the development of intellectual property with respect to our technology platforms and new products, 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.

Our research and development efforts focus on developing new medical applications that address unmet needs by leveraging our technology platforms.

This includes new implant designs, developing intellectual property related to our technology platforms and new products, managing clinical trials for certain product candidates, preparing and processing applications for regulatory clearances and approvals, and conducting process development and scale-up manufacturing activities for our existing and new product development initiatives.

For 2024, 2023, and 2022, research and development expenses were $25.6 million, $21.8 million, and $18.3 million, respectively.

The increase in 2023 was primarily due to costs to ensure compliance with growing regulatory requirements globally, such as EU MDR, as well as new product development in our research and development pipeline, led by Integrity, which received FDA clearance in August 2023 and was launched with first surgeries in rotator cuff repair and other tendon procedures in November 2023.

We anticipate that we will continue to commit resources to research and development activities, primarily for new product development, regulatory compliance, scale-up manufacturing activities, and pre-clinical and clinical activities.

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, sports medicine soft tissue repair and Arthrosurface joint solutions.

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

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

Our development focus for OA Pain Management will continue to be on bringing Cingal, our next-generation, non-opioid, single-injection HA-based OA pain product combined with a fast-acting steroid, to the U.S.

The increase in 2024 was primarily due to costs associated with ensuring compliance with growing global regulatory requirements, such as the European Union (“EU”) Medical Device Regulation (“MDR”), as well as new product development in our research and development pipeline.

This pipeline is led by Integrity, which received FDA clearance in August 2023 and was launched with first surgeries in rotator cuff repair and other tendon procedures in November 2023.

We anticipate continuing to commit resources to research and development activities, primarily for new product development, regulatory compliance, scale-up manufacturing activities, and preclinical and clinical activities.

Our new product development efforts focus on HA-based products in unmet, large, and growing orthopedic markets to drive long-term value, specifically in OA Pain Management and Regenerative Solutions.

To better inform and target our research and development investments, we routinely interact with key external stakeholders, including clinicians, to incorporate customer and patient insights into our development process.

This approach helps ensure we bring needed solutions to the market.

As we move forward, we plan to continue investing in novel and meaningful new products for our target markets based on our core capabilities, including further expanding our regenerative HA technology platform.

Our development focus for OA Pain Management will continue to be on bringing Cingal, our next-generation, non-opioid, single-injection OA pain product combined with a fast-acting steroid, to the U.S.

In 2022, we completed a third Phase III clinical trial for Cingal, which achieved its primary endpoint.

We have been actively engaging with the U.S.

Food and Drug Administration, or the FDA, on next steps for U.S.

We have been actively engaging with the FDA on next steps for U.S.

regulatory approval.

In September 2024, we acquired the Aristospan NDA to assist with our Cingal regulatory filing with the FDA.

We have made significant progress in addressing the FDA's requirements for Cingal's approval, including a Type-C meeting with the FDA and acquiring the Aristospan NDA to enable us to source the reference drug for a bioequivalence study.

We had another Type-C meeting with the FDA in February 2025 to discuss finalizing NDA submission requirements.

In parallel, we are exploring the potential to advance Cingal through commercial partnerships in the U.S.

and select Asian markets.

These efforts will inform next steps, including if and how to proceed with another clinical trial in the United States.

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

We are developing novel solutions and line extensions across our regenerative solutions, sports medicine soft tissue repair and Arthrosurface joint solutions product families, largely targeting the faster-growing extremities segments such as the shoulder.

These include enhancements to existing regenerative solutions such as our fast-growing Tactoset Injectable Bone Substitute, which received an additional 510(k) clearance in 2021 for hardware augmentation, along with new soft tissue fixation and extremities products like our X-Twist Fixation System that received 510(k) clearance from the FDA in 2022 and our RevoMotion reverse shoulder arthroplasty system, which received 510(k) clearance in 2021, as well as our Integrity Implant System, a regenerative HA-based patch product targeted at rotator cuff repair that received 510(k) clearance in August 2023 and is now in limited market release.

We also launched our X-Twist Biocomposite, the bioabsorbable version of the X-Twist Fixation System, in early 2024.

In addition, we made significant progress in 2023 on our clinical trial to support approval in the United States for Hyalofast, our single stage, off the shelf, cartilage repair therapy, currently sold only outside the United States.

We have fully enrolled the 200 patients targeted in the trial.

This pivotal trial has a two-year follow-up protocol expected to be achieved in early 2025 before regulatory submission is completed.

We are targeting to file the first module as part of a modular PMA in 2024 which is the first step in seeking FDA approval for Hyalofast in the U.S.

The final module of the PMA will be filed in 2025 once the clinical data becomes available to be submitted to the FDA.

Development for our Regenerative Solutions product family is focused on several key areas.

We are developing novel solutions and line extensions across our regenerative solutions segments, with a key focus on the shoulder, knee, and foot and ankle.

These include enhancements to existing regenerative solutions such as our Tactoset Injectable Bone Substitute, which received an additional premarket notification (510(k)) clearance in 2021 for hardware augmentation, and our Integrity Implant System, a regenerative HA-based patch product targeted at rotator cuff repair that received 510(k) clearance in August 2023 and is now in full market release.

Integrity has shown strong performance, with over 40% sequential growth in surgeries and significant adoption by new customers.

In addition, we have made significant progress on a full regenerative pipeline, leveraging the commercial success of Integrity, as well as progress on our clinical trial to support approval in the United States for Hyalofast, our single-stage, off-the-shelf cartilage repair therapy, currently sold only outside the United States.

We have fully enrolled the 200 patients targeted in the Hyalofast trial.

This pivotal trial has a two-year follow-up protocol expected to be completed in early 2025 before regulatory submission is finalized.

We filed the first module as part of a modular PMA in 2024, which is the first step in seeking FDA approval for Hyalofast in the United States, and the second module was filed in January 2025.

The final module of the PMA will be filed in 2025 once the clinical data becomes available for submission to the FDA.

Intellectual Property

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.

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.

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

For our OA Pain Management products, our principal competitors include Sanofi Genzyme, Zimmer Biomet, Inc., Bioventus Inc., Avanos Medical, 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, such as Catalyst OrthoScience, Enovis Corporation and Shoulder Innovations.

Many of the larger companies have substantially greater financial resources, larger research and development staffs, more extensive marketing and manufacturing organizations, and more experience in 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 manufacturing supplies, raw materials 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 clearances/approvals;

Our ability to successfully source raw materials and components from suppliers at price points that are in-line with our financial objectives, as well as deliver them on schedule to meet the needs of our operational and commercial organizations;

Our ability to continue to strengthen 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;

We pursue patent and trademark protection for our key technologies, products, and product enhancements in the United States and select international markets.

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

While our patent and trademark portfolio provides competitive advantages for our current and future product lines, it is not our only form of protection.

We also depend on trade secrets and ongoing technological innovations and regulatory approvals to sustain our competitive edge.

Our intellectual property strategy is integral to our overall corporate strategy, particularly as we focus on our core HA technology and Regenerative Solutions products.

This approach ensures that we can continue to innovate and bring new, differentiated products to market, such as Integrity and Hyalofast, while protecting our proprietary technologies and maintaining our competitive position in the industry.

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

For our OA Pain Management products, our main competitors include Sanofi Genzyme, Zimmer Biomet, Inc., Bioventus Inc., Avanos Medical, Inc., Pacira BioSciences, Conmed Corporation, and Ferring Pharmaceuticals, among others.

With respect to our Regenerative Solutions products, our key competitors are Arthrex, Inc , Smith & Nephew PLC, Stryker Corporation, and Zimmer Biomet, Inc., as well as smaller organizations like Atreon Orthopedics and Bone Support AB.

Many of these larger companies have significantly greater financial resources, larger research and development teams, more extensive marketing and manufacturing capabilities, and more experience with regulatory processes than we do.

We also face competition from academic institutions, government agencies, and other research organizations involved in product research, development, and commercialization.

Additionally, many of our competitors compete with us for collaborations in research and development, clinical trial, and commercialization programs.

We primarily compete with other market participants on the efficacy and safety reputation of our products, as well as the breadth of our overall product portfolio.

Other competitive factors include the timing and scope of regulatory approvals, availability of manufacturing supplies and raw materials, marketing and sales capabilities, reimbursement coverage, product pricing, and patent protection.

Key factors that may affect our competitive position include:

The quality and breadth of our product portfolio development;

Our ability to complete successful clinical studies and obtain FDA and foreign regulatory approvals;

Our ability to source raw materials and components at competitive prices and deliver them on schedule;

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

The execution of commercial strategies by our key partners and our management of these relationships;

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 several 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 our 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.

The availability of capital resources to fund strategic activities, including acquisitions.

We are aware of several companies developing and marketing competitive products.

Some competitors have already obtained product approvals, submitted applications for approval, or commenced clinical studies in the U.S.

All our products face substantial competition, and there is a risk that we may not compete effectively against current or future competitors.

Additionally, healthcare legislation and regulation aimed at reducing costs have led to industry consolidation, creating larger companies with greater market power.

This has intensified competition in the provision of products and services.

Market makers, such as group purchasing organizations and integrated delivery networks, have increased their negotiating leverage.

If these market makers demand significant price concessions or exclude us as a supplier, our product revenue could be adversely impacted.

Despite these challenges, our products, like Monovisc, Orthovisc, and Cingal, have maintained strong market positions due to their clinical efficacy and safety profiles.

Our regenerative solutions, including Integrity and Hyalofast, are also gaining traction, supported by robust clinical data and innovative technology.

We continue to focus on expanding our market presence and enhancing our competitive edge through strategic investments in research and development, regulatory compliance, and commercial infrastructure.

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 worldwide, including pursuant to the Federal Food, Drug, and Cosmetic Act, or FDCA, in the United States.

Medical products regulated by the FDA and other regulatory authorities 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 due to new regulations or augmented interpretation of data or current regulations.

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, including under the Federal Food, Drug, and Cosmetic Act (“FDCA”) in the United States.

Medical products regulated by the FDA and other authorities are generally classified as drugs, biologics, or medical devices.

The classification standards for our products may change over time due to new regulations or updated interpretations of existing regulations.

Regulation of Medical Devices

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

Class I and II devices are subject to the 510(k) premarket notification process in order to be commercially distributed, unless exempt Class III devices must obtain FDA approval of their premarket approval applications, or PMAs, in order to be commercially distributed.

Some of our current products are subject to premarket notification and clearance under section 510(k) of the FDCA.

To obtain 510(k) clearance, a company must submit to the FDA a premarket notification, or 510(k), demonstrating that the proposed device is “substantially equivalent” to a legally marketed device, known as a “predicate device.” A device is substantially equivalent if, with respect to the predicate device, it has the same intended use and has either (i) the same technological characteristics, or (ii) different technological characteristics, but the information provided in the 510(k) submission demonstrates that the device does not raise new questions of safety and effectiveness and is at least as safe and effective as the predicate device.

The FDA aims to review and issue a determination on a 510(k) submission within 90 calendar days.

As a practical matter, 510(k) clearance often takes longer.

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

Class I and II devices are subject to the 510(k) premarket notification process unless exempt.

Class III devices must obtain FDA approval of their PMAs to be commercially distributed.

Some of our current products require premarket notification and clearance under section 510(k) of the FDCA.

To obtain 510(k) clearance, a company must submit a premarket notification demonstrating that the proposed device is “substantially equivalent” to a legally marketed device, known as a “predicate device.” A device is substantially equivalent if it has the same intended use and either the same technological characteristics or different technological characteristics that do not raise new questions of safety and effectiveness.

The FDA aims to review and issue a determination on a 510(k) submission within 90 calendar days, though it often takes longer.

The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.

If the FDA agrees that the device is substantially equivalent, it will grant 510(k) clearance to commercially market the device.

If the FDA determines that the device is ”not substantially equivalent” to a predicate device, the device is automatically designated as a Class III device.

The device sponsor must then fulfill more rigorous PMA requirements or may be able to request a risk-based classification determination for the device in accordance with the ‘‘de novo’’ process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval.

The determination as to whether a modification could significantly affect the device’s safety or effectiveness is initially left to the manufacturer using available FDA guidance.

Many minor modifications are accomplished by a ‘‘letter to file’’, in which the manufacturer documents the rationale for the change and why a new 510(k) submission is not required.

However, the FDA may review such letters to file to evaluate the regulatory status of the modified device at any time and may require the manufacturer to cease marketing and recall the modified device until 510(k) clearance or PMA approval is obtained.

Some of our devices are Class III devices that require PMA approval before they can be marketed.

In a PMA, the manufacturer must demonstrate that the device is reasonably safe and effective, and the PMA must be supported by extensive data, including data from preclinical studies and clinical trials.

The PMA must also contain a full description of the device and its components, a full description of the methods, facilities and controls used for manufacturing, and proposed labeling.

If the FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years.

An advisory committee of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device.

The FDA may or may not accept the advisory committee’s recommendation.

In addition, the FDA will generally conduct a pre-approval inspection of the applicant or its third-party manufacturers’ or suppliers’ manufacturing facility or facilities to ensure compliance with the QSR.

The FDA will approve the new device for commercial distribution if it determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended use(s).

Certain changes to an approved device that affect the safety or effectiveness of the device, require submission of a PMA supplement or in some cases a new PMA.

If the FDA agrees that the device is substantially equivalent, it will grant 510(k) clearance to market the device.

If the FDA determines that the device is “not substantially equivalent” to a predicate device, it is designated as a Class III device, requiring more rigorous PMA requirements or a risk-based classification determination through the “de novo” process for novel medical devices that are low to moderate risk.

After receiving 510(k) clearance, any modification that could significantly affect the device’s safety or effectiveness, or constitute a major change in its intended use, requires a new 510(k) clearance or PMA approval.

The determination of whether a modification could significantly affect the device’s safety or effectiveness is initially left to the manufacturer using available FDA guidance.

Many minor modifications are documented by a “letter to file,” but the FDA may review these letters and require the manufacturer to cease marketing and recall the modified device until 510(k) clearance or PMA approval is obtained.

Some of our devices are Class III devices requiring PMA approval before marketing.

In a PMA, the manufacturer must demonstrate that the device is reasonably safe and effective, supported by extensive data from preclinical studies and clinical trials.

The PMA must also include a full description of the device, its components, manufacturing methods, facilities, controls, and proposed labeling.

The FDA has 180 days to review a PMA, though it often takes longer.

An advisory committee of external experts may review the application and provide recommendations to the FDA.

The FDA generally conducts a pre-approval inspection of the manufacturing facilities to ensure compliance with the FDA’s quality system regulation (“QSR”).

The FDA will approve the device for commercial distribution if the data and information in the PMA constitute valid scientific evidence and provide reasonable assurance of the device’s safety and effectiveness.

Certain changes to an approved device that affect its safety or effectiveness require submission of a PMA supplement or a new PMA.

Regulation of a Drug

In order to be marketed, new drugs require FDA approval of a New Drug Application, or NDA.

Satisfaction of the FDA approval requirements for drugs typically takes several years and the actual time required may vary substantially based on the type, complexity and novelty of the product.

New drugs require FDA approval of a NDA to be marketed.

The approval process typically takes several years and varies based on the product’s type, complexity, and novelty.

None of our products are currently approved under an NDA.

The steps for obtaining FDA approval of an NDA to market a drug in the United States include:

The steps for obtaining FDA approval of an NDA include:

Completion of preclinical laboratory tests, animal studies, and formulation studies under the FDA’s Good Laboratory Practices regulations;

submission to the FDA of an Investigational New Drug Application, or IND, for human clinical testing, which must become effective before human clinical trials may begin and Institutional Review Board, or IRB, approval at each clinical site before the trials may be initiated;

performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices to establish the safety and efficacy of the product for each indication;

submission to the FDA of a user fee (unless a fee waiver applies) and an NDA, which contains detailed information about the Chemistry, Manufacturing and Control, or CMC, for the product, reports of the outcomes and full data sets of the preclinical testing and clinical trials, and proposed labeling and packaging for the product;

satisfactory review of the contents of the NDA by the FDA, including the satisfactory resolution of any questions raised during the review;

satisfactory completion of an FDA advisory committee review, if applicable;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current Good Manufacturing Practices, or cGMP, regulations, to assure that the facilities, methods and controls are adequate to ensure the product’s identity, strength, quality and purity;

Submission of an Investigational New Drug Application (“IND”) for human clinical testing, which must become effective before trials begin and require Institutional Review Board (“IRB”) approval at each clinical site;

Performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices to establish the product’s safety and efficacy;

Submission of a user fee (unless waived) and an NDA, containing detailed information about the product’s Chemistry, Manufacturing, and Control (“CMC”), preclinical and clinical trial outcomes, and proposed labeling and packaging;

Satisfactory review of the NDA by the FDA, including resolution of any questions raised during the review;

Completion of an FDA advisory committee review, if applicable;

Completion of an FDA inspection of the manufacturing facilities to assess compliance with current Good Manufacturing Practices (“cGMP”) regulations;

FDA approval of the NDA, including agreement on post-marketing commitments, if applicable.

After the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe and effective for its intended use, and has an acceptable purity profile.

A drug-drug combination product must meet the FDA’s fixed combination rule and thus demonstrate the contribution of each component to the therapeutic effect.

If the FDA determines the application, the manufacturing process or manufacturing facilities are not acceptable, it will either not approve the NDA or issue a complete response letter in which it will outline the deficiencies in the NDA.

If a complete response letter is issued, the applicant may either resubmit the NDA to address all deficiencies identified in the letter, withdraw the application, or request a hearing.

Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the NDA does not satisfy the regulatory criteria for approval.

The FDA seeks to review standard NDAs in 10 months and priority NDAs in six months, whereupon a review decision is to be made.

The FDA does not always meet its goal dates for standard and priority NDAs and its review goals are subject to change from time to time.

After the NDA submission is accepted, the FDA reviews it to determine whether the proposed product is safe and effective for its intended use and has an acceptable purity profile.

A drug-drug combination product must meet the FDA’s fixed combination rule, demonstrating the contribution of each component to the therapeutic effect.

If the FDA finds the application, manufacturing process, or facilities unacceptable, it will either not approve the NDA or issue a complete response letter outlining the deficiencies.

The applicant may resubmit the NDA, withdraw the application, or request a hearing.

Despite additional information, the FDA may ultimately decide the NDA does not meet regulatory criteria for approval.

The FDA aims to review standard NDAs in 10 months and priority NDAs in six months, though it does not always meet these goals, which are subject to change.

Clinical Trials

Clinical trials are typically required to support a PMA and an NDA and are sometimes required to support a 510(k) submission.

All clinical trials must be approved by and conducted under the oversight of an IRB for each clinical site.

Clinical trials are typically required to support a PMA, NDA, and sometimes a 510(k) submission.

All trials must be approved by and conducted under the oversight of an IRB for each site.

Clinical investigators must obtain informed consent from all study subjects.

After a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.

Information about certain clinical studies must be submitted with specific timeframes to the National Institutes of Health for public dissemination at www.clinicaltrials.gov.

All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption, or IDE, regulations which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

If the device presents a ‘‘significant risk’’ as defined by the FDA, to human health, the FDA requires the device sponsor to submit an IDE application to the FDA, which must be approved prior to commencing human clinical trials.

A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, purported or represented to be used in supporting or sustaining human life, is for a use that is substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject.

A clinical trial may begin 30 days after receipt of the IDE by the FDA unless the FDA notifies the company that the investigation may not begin.

If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number of patients, as approved by the FDA.

If the device is considered a ‘‘non-significant risk’’ IDE submission to the FDA is not required.

Instead, only approval from the IRB overseeing the investigation at each clinical trial site is required.

For a new drug, an IND application must be submitted prior to the initiation of the clinical study and contain information on animal pharmacology and toxicology studies, manufacturing, and clinical protocols and investigator information.

Some preclinical testing may continue after the IND application is submitted.

The IND must become effective before human clinical trials may begin.

An IND will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about issues such as the conduct of the trials and/or supporting preclinical data as outlined in the IND application and places the trial on clinical hold.

In that case, the IND sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials can proceed.

For purposes of NDA approval, human clinical trials are typically conducted in three sequential phases that may overlap:

Phase 1—The investigational product is initially introduced into healthy human subjects and tested for safety.

In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.

These trials may also provide early evidence of their effectiveness.

Phase 2—These trials are conducted in a limited number of patients in the target population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

Phase 3—Phase 3 trials are undertaken to provide statistically significant evidence of clinical efficacy and to further evaluate dosage, potency, and safety in an expanded patient population at multiple clinical trial sites.

They are performed after preliminary evidence suggesting effectiveness of the product has been obtained and are intended to establish the overall benefit-risk relationship of the investigational product, and to provide an adequate basis for product approval and physician labeling.

Typically, if a product is intended to treat a chronic disease, safety and efficacy data must be gathered over an extended period, which can range from six months to three years or more.

During all phases of clinical development, the FDA requires extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.

Annual progress reports detailing the results of the clinical trials and reports of serious adverse events must be submitted to the FDA.

Trials can be suspended or terminated by us, the FDA, or the IRB for various reasons, including risks outweighing benefits.

Information about certain clinical studies must be submitted to the National Institutes of Health for public dissemination at www.clinicaltrials.gov.

All clinical investigations of devices must comply with the FDA’s investigational device exemption (IDE) regulations, which govern labeling, prohibit promotion, and specify recordkeeping, reporting, and monitoring responsibilities.

Significant risk devices require an IDE application approved by the FDA before trials begin.

Non-significant risk devices only require IRB approval.

For new drugs, an IND application must be submitted before clinical studies begin, containing information on animal studies, manufacturing, and clinical protocols.

The IND must become effective before trials start, automatically becoming effective 30 days after receipt unless the FDA raises concerns.

If concerns arise, they must be resolved before trials proceed.

Human clinical trials for NDA approval are typically conducted in three phases:

Initial testing in healthy subjects to assess safety, sometimes conducted in patients for severe diseases.

Trials in a limited patient population to identify adverse effects, evaluate efficacy, and determine dosage.

Large-scale trials to provide statistically significant evidence of efficacy, evaluate dosage, potency, and safety, and establish the benefit-risk relationship for approval.

For chronic diseases, safety and efficacy data must be gathered over extended periods, ranging from six months to three years or more.

During all phases, the FDA requires extensive monitoring and auditing of clinical activities, data, and investigators.

Annual progress reports and serious adverse event reports must be submitted to the FDA.

Post-Approval Requirements

Products manufactured or distributed pursuant to FDA clearances or approvals are subject to continuing regulation by the FDA, including, among other things, requirements relating to monitoring, record-keeping, advertising and promotion, reporting of adverse experiences, and limitations on industry-sponsored scientific and educational activities.

FDA regulations require that PMA and NDA approved products be manufactured in specific facilities and all devices and drugs must be manufactured in accordance with the QSR and cGMP regulations, respectively.

Manufacturers and other entities involved in the manufacture and distribution of cleared or approved devices or drugs are required to register their establishments and list their products with the FDA and certain state agencies.

Manufacturers are subject to periodic announced and unannounced inspections by the FDA and certain state agencies for compliance with regulatory requirements.

The discovery of violative conditions, including failure to conform to the QSR and cGMP regulations, could result in enforcement actions.

Products may be promoted only for the cleared or approved indications and in accordance with the provisions of the label.

The FDA does not regulate behavior of physicians in their choice of treatments and physicians may legally prescribe available products for uses that are not described in the product’s labeling and that differ from those approved or cleared by the FDA.

However, the FDA does restrict an applicant’s communications about off-label use of its products.

The FDA and other agencies actively enforce the laws prohibiting the marketing and promotion of off-label uses, and a company that is found to have improperly marketed or promoted off-label use may be subject to significant liability, including criminal and civil penalties under the FDCA and False Claims Act, exclusion from participation in federal healthcare programs, and mandatory compliance programs.

The FDA also may require post-marketing testing and surveillance to monitor the effects of a marketed product.

Discovery of previously unknown problems with a product or the failure to comply with applicable FDA requirements can have negative consequences, including adverse publicity, restrictions on a product, and judicial or administrative enforcement.

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 a Form FDA 483 notice of inspectional observations or a warning letter or untitled letter, imposing civil money penalties, suspending or delaying issuance of clearances or approvals or refusing to grant clearances or approve pending premarket applications, requiring or requesting 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 devices that we manufactured or distributed.

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

Products manufactured or distributed pursuant to FDA clearances or approvals are subject to ongoing regulation by the FDA.

This includes requirements for monitoring, record-keeping, advertising and promotion, reporting adverse experiences, and limitations on industry-sponsored scientific and educational activities.

FDA regulations mandate that PMA and NDA approved products be manufactured in specific facilities, and all devices and drugs must comply with the QSR and cGMP regulations, respectively.

On February 2, 2024, the FDA published a final rule to amend its QSR requirements to align more closely with international consensus standards for medical devices by incorporating the 2016 edition of the ISO 13485 standard.

This amended regulation, known as the Quality Management System Regulation, will be effective February 2, 2026.

Manufacturers and other entities involved in the manufacture and distribution of cleared or approved devices or drugs must register their establishments and list their products with the FDA and certain state agencies.

These manufacturers are subject to periodic announced and unannounced inspections by the FDA and state agencies to ensure compliance with regulatory requirements.

Discovery of violative conditions, including failure to conform to QSR and cGMP regulations, could result in enforcement actions.

Products may only be promoted for the cleared or approved indications and in accordance with the label provisions.

While the FDA does not regulate physicians' treatment choices, it restricts communications about off-label use of products.

The FDA and other agencies actively enforce laws prohibiting off-label marketing and promotion.

Companies found to have improperly marketed or promoted off-label uses may face significant liability, including criminal and civil penalties under the FDCA and False Claims Act, exclusion from federal healthcare programs, and mandatory compliance programs.

The FDA may also require post-marketing testing and surveillance to monitor a marketed product's effects.

Discovery of previously unknown problems or non-compliance with FDA requirements can lead to adverse publicity, product restrictions, and judicial or administrative enforcement.

The FDA has broad regulatory compliance and enforcement powers, including issuing Form FDA 483 notices, warning letters, civil money penalties, suspending or delaying clearances or approvals, product recalls, production shutdowns, withdrawal of approvals, product seizures, consent decrees, injunctive relief, or criminal prosecution.

The FDA can also require manufacturers to repair, replace, or refund the cost of devices.

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

EU Regulation

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 (or in some cases, for the lowest risk class devices, the manufacturer can self-certify) to demonstrate that the device meets all applicable general safety and performance requirements of the EU medical devices legislation, including that the manufacturer’s Quality Management System is compliant with such requirements.

The EU’s Medical Devices Directive, or MDD, has been replaced by the EU Medical Devices Regulation (Regulation (EU) No 2017/745), or EU MDR, and which became effective on May 26, 2021.

Medical devices lawfully placed on the market pursuant to a certification issued under the MDD may continue to be marketed during a transitional period.

The timing for this transition has been extended from no later than May 26, 2024 to December 2027 or December 2028, depending on device classification, provided certain conditions are met with regard to compliance with the EU MDR, including compliance with the requirements under the EU MDR in respect of post-market surveillance, vigilance and registration and that an agreement for conformity assessment under the EU MDR for the device by a notified body under the EU MDR has been enacted to be filed by May 26, 2024.

The EU MDR will generally require increased levels of clinical data as compared to MDD requirements, and all product technical data must comply to the latest standards regardless of when the product was initially developed.

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;

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

or (iv) a national procedure in which the approval is sought through the regulatory agency of one country.

In the European Union, medical devices must be CE marked to be marketed.

CE marking involves working with a notified body (or self-certifying for low-risk devices) to demonstrate that the device meets all applicable general safety and performance requirements of EU medical devices legislation, including compliance with the manufacturer’s Quality Management System.

The EU’s Medical Devices Directive (“MDD”) has been replaced by the EU Medical Devices Regulation (“EU MDR”), effective May 26, 2021.

Devices certified under the MDD may continue to be marketed during a transitional period.

On March 15, 2023, the transition period was extended from May 26, 2024, to either May 26, 2026, December 31, 2027, or December 31, 2028, depending on device classification, provided certain conditions are met.

These conditions include compliance with EU MDR requirements for post-market surveillance, vigilance, and registration, having a contract with an EU MDR notified body before September 26, 2024, and filing an agreement for conformity assessment by May 26, 2024.

The EU also removed its 12-month "sell-off" provision, allowing non-transitioning medical devices that comply with the MDD to be supplied in the EU after May 2025 until stock is depleted.

The EU MDR generally requires increased levels of clinical data compared to MDD requirements, and all product technical data must comply with the latest standards regardless of when the product was initially developed.

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

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

(ii) a mutual recognition procedure, where an individual country's regulatory agency approves the product, followed by mutual recognition by other countries' regulatory agencies;

(iii) a decentralized procedure, where approval is sought simultaneously through multiple countries' regulatory agencies;

or (iv) a national procedure, where approval is sought through a single country's regulatory agency.

UK Regulation

The UK formally left the EU on January 31, 2020.

The EU and the UK have concluded a trade and cooperation agreement, or TCA, which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021.

The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued but does not provide for wholesale mutual recognition of UK and EU pharmaceutical regulations.

At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework continues to apply in Northern Ireland).

The regulatory regime in Great Britain therefore currently aligns with EU regulations in many ways, however it is possible that these regimes will diverge more significantly in the future now that Great Britain’s regulatory system is independent from the EU.

In respect of medical devices, since the end of the Brexit transitional period on January 1, 2021, new regulations require medical devices to be registered with the Medicines and Healthcare products Regulatory Agency, or MHRA (the UK medicines and medical devices regulator) before being placed on the Great Britain market.

The MHRA will only register devices where the manufacturer or their United Kingdom Responsible Person has a registered place of business in the United Kingdom.

CE marks issued by EU notified bodies to place medical devices on the market in the EU will remain valid in the UK up until June 30, 2028 (for CE marks issued under the EU MDD) or June 30, 2030 (for CE marks issued under the EU MDR), following which a UK Conformity Assessed (“UKCA”) mark will be required to place a device on the Great Britain market.

Manufacturers may choose to use the UKCA mark on a voluntary basis prior to such dates.

UCKA marking will, however, not be recognized in the EU.

The EU regulatory framework on medical devices continues to apply in Northern Ireland under the Northern Ireland Protocol and medical devices in Northern Ireland may either carry an EU CE mark or a UK and Northern Ireland CE mark (“CE UKNI”), although devices bearing the CE UKNI marking will not be accepted on the EU market.

The EU and the UK concluded a Trade and Cooperation Agreement (“TCA”), provisionally applicable since January 1, 2021, and formally applicable since May 1, 2021.

The TCA includes specific provisions concerning pharmaceuticals, such as the mutual recognition of GMP inspections and GMP documents but does not provide for wholesale mutual recognition of UK and EU pharmaceutical regulations.

Currently, the UK has implemented EU legislation on the marketing, promotion, and sale of medicinal products through the Human Medicines Regulations 2012 (as amended), with the Medicines and Healthcare products Regulatory Agency (“MHRA”) responsible for authorizing all medicinal products.

While the UK regulatory regime aligns with EU regulations in many ways, it is possible that these regimes will diverge more significantly in the future now that the UK’s regulatory system is independent from the EU.

Regarding medical devices, since the end of the Brexit transitional period on January 1, 2021, new regulations require medical devices to be registered with the MHRA before being placed on the Great Britain market.

The MHRA will only register devices where the manufacturer or their United Kingdom Responsible Person has a registered place of business in the UK.

CE marks issued by EU notified bodies to place medical devices on the EU market will remain valid in the UK until June 30, 2028 (for CE marks issued under the EU MDD) or June 30, 2030 (for CE marks issued under the EU MDR).

After these dates, a UK Conformity Assessed (“UKCA”) mark will be required to place a device on the Great Britain market.

Manufacturers may choose to use the UKCA mark voluntarily before these dates.

However, the UKCA mark will not be recognized in the EU.

The EU regulatory framework for medical devices continues to apply in Northern Ireland under the Northern Ireland Protocol.

Medical devices in Northern Ireland may carry either an EU CE mark or a UK and Northern Ireland CE mark (“CE UKNI”), although devices bearing the CE UKNI marking will not be accepted on the EU market.

Other Health Care Laws

The delivery of our products is subject to regulation by the U.S.

The delivery of our products is regulated by the U.S.

Department of Health and Human Services and other state and non-U.S.

government agencies responsible for reimbursement and regulation of health care items and services.

laws and regulations are imposed primarily in connection with government-funded health care programs, such as Medicare and Medicaid, as well as the government’s interest in regulating the quality and cost of health care.

Other governments also impose regulations in connection with their health care reimbursement programs and the delivery of health care items and services.

government agencies responsible for healthcare reimbursement and regulation.

laws and regulations are primarily imposed in connection with government-funded healthcare programs, such as Medicare and Medicaid, and the government's interest in regulating healthcare quality and cost.

Other governments also impose regulations on their healthcare reimbursement programs and the delivery of healthcare items and services.

We are subject to various U.S.

federal and state laws pertaining to health care fraud and abuse, including anti-kickback, false claims, self-referrals, and other health care fraud.

In addition, we are subject to U.S.

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

Additionally, we are subject to U.S.

federal and state transparency laws, such as the U.S.

Physician Payments Sunshine Act, which require us to annually disclose certain payments and other transfers of value we make to U.S.-licensed health care practitioners (like physicians, nurse practitioners, advanced practice registered nurses, and others) and others.

Similar laws and regulations pertaining to sales, marketing and advertising practices exist in the other geographic areas where we operate.

Physician Payments Sunshine Act, which requires us to annually disclose certain payments and other transfers of value made to U.S.-licensed healthcare practitioners (e.g., physicians, nurse practitioners, advanced practice registered nurses) and teaching hospitals.

Similar laws and regulations regarding sales, marketing, and advertising practices exist in other regions where we operate.

Coverage and Reimbursement

Sales of any medical product depend, in part, on the extent to which such product (or procedures using such product) will be covered by third-party payers, such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product or procedure by third-party payers.

Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis.

These third-party payers are increasingly reducing reimbursements for medical products and related procedures.

Factors that payers consider in determining reimbursement are based on whether the product or procedure is:

a covered benefit under its health plan;

safe, effective and medically necessary;

appropriate for the specific patient;

cost-effective;

neither experimental nor investigational.

No uniform policy for coverage and reimbursement for medical products or procedures that use medical products exists among third-party payers in the U.S.

Therefore, coverage and reimbursement for products or their procedures can differ significantly from payer to payer.

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payer separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Furthermore, rules and regulations regarding reimbursement change frequently, in some cases on short notice, and we believe that changes in these rules and regulations are likely.

In addition, the U.S.

government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product.

Decreases in third-party reimbursement for any product or procedure that uses our products or a decision by a third-party payer not to cover a product or related procedure could reduce physician usage and patient demand for the product or procedure and also have a material adverse effect on sales.

Sales of medical products depend partly on coverage by third-party payers, such as government healthcare programs, commercial insurance, and managed healthcare organizations, and the level of reimbursement provided.

Coverage and reimbursement decisions are made on a plan-by-plan basis, and third-party payers are increasingly reducing reimbursements for medical products and procedures.

Factors considered by payers in determining reimbursement include:

Whether the product or procedure is a covered benefit under the health plan;

Safety, effectiveness, and medical necessity;

Appropriateness for the specific patient;

Cost-effectiveness;

Whether the product or procedure is experimental or investigational.

No uniform policy for coverage and reimbursement exists among third-party payers in the United States, leading to significant differences in coverage and reimbursement for products and procedures.

The coverage determination process is often time-consuming and costly, requiring scientific and clinical support for each payer separately, with no assurance of consistent or initial coverage and adequate reimbursement.

Rules and regulations regarding reimbursement change frequently, often on short notice.

government, state legislatures, and foreign governments continue to implement cost-containment programs, including price controls, coverage and reimbursement restrictions, and generic substitution requirements.

Adoption of such measures could limit product sales.

Decreases in third-party reimbursement or decisions not to cover a product or procedure could reduce physician usage and patient demand, adversely affecting sales.

Health Care Reform

The Affordable Care Act of 2010, or the ACA, substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical and medical device industry.

The ACA contained a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and changes to fraud and abuse laws as well as Medicare provisions aimed at decreasing costs, comparative effectiveness research, an independent payment advisory board and pilot programs to evaluate alternative payment methodologies.

The Affordable Care Act of 2010 (“ACA”) substantially changed healthcare financing by both governmental and private insurers, significantly impacting the pharmaceutical and medical device industries.

The ACA included provisions governing enrollment in federal healthcare programs, reimbursement adjustments, changes to fraud and abuse laws, and Medicare provisions aimed at reducing costs.

It also introduced comparative effectiveness research, an independent payment advisory board, and pilot programs to evaluate alternative payment methodologies.

Since its enactment, there have been ongoing judicial and Congressional efforts to modify or repeal certain aspects of the ACA.

For example, the Further Consolidated Appropriations Act, 2020, repealed the Cadillac tax, the health insurance provider tax, and the medical device excise tax.

It is impossible to determine whether similar taxes could be instated in the future or how future healthcare reform measures or other efforts, if any, to challenge repeal or replace the ACA, will impact our business.

It is impossible to determine how future healthcare reform measures or efforts to challenge, repeal, or replace the ACA will impact our business.

Data Privacy and Security Laws

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, or GDPR, in the European Union and the United Kingdom.

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 and the United Kingdom.

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

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Our OA Pain Management and Non-Orthopedic product families are generally less seasonal in nature due to the nature of our product mix and sales channels and order strategies of our customers.

In Joint Preservation and Restoration, procedure volumes are normally higher in the fourth quarter due to several factors including the satisfaction by patients of insurance deductible limits and the time of year patients prefer to have elective procedures.

Our Joint Preservation and Restoration business can be impacted by periodic restrictions on the performance of elective surgical procedures throughout the U.S.

and global markets, the unavailability of physicians and/or changes to their treatment prioritizations, reductions in the levels of healthcare facility staffing and, in certain instances, and the willingness or ability of patients to seek treatment.

With our Regenerative Solutions product portfolio, procedure volumes are normally higher in the fourth quarter due to several factors including the satisfaction by patients of insurance deductible limits and the time of year patients prefer to have elective procedures.

Our Regenerative Solutions business can be impacted by periodic restrictions on the performance of elective surgical procedures throughout the United States and global markets, the unavailability of physicians and/or changes to their treatment prioritizations, reductions in the levels of healthcare facility staffing and, in certain instances, and the willingness or ability of patients to seek treatment.

Environmental, Social and Governance

In 2021, we began a process to develop a foundational Environmental, Social and Governance, or ESG, framework for our organization.

In 2021, we began a process to develop a foundational Environmental, Social and Governance (“ESG”) framework for our organization.

This framework integrates our six key corporate values:

People, Quality, Integrity, Accountability, Innovation and Teamwork.

The initial step in our ESG journey included the completion of a “materiality assessment” based on the Sustainability Accounting Standards Board, or SASB, framework.

The initial step in our ESG journey included the completion of a “materiality assessment” based on the Sustainability Accounting Standards Board (“SASB”) framework.

Our materiality assessment was a research-intensive and stakeholder-inclusive process and included guidance and insight from external advisors, and crucial feedback from key internal and external stakeholders, including investors, customers, suppliers, employees, and our board of directors.

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We will continue to assess and update our ESG initiatives as our business grows and as we implement processes and improvements over time.

In 2023, we committed to evaluate ways to reduce our carbon footprint in its contribution to the Paris Climate agreement which seeks to limit global warming to 1.5 o C and to achieve carbon neutrality by 2050.

The first step in our process was to establish a baseline for greenhouse gas, GHG, emissions by measuring Scope 1 and Scope 2 emissions across our global operations for 2022, and we continued to monitor our emissions in 2023, with Scope 1 = 1559 mtCO2e and Scope 2 = 2085 mtCO2e.

We are a low greenhouse gas, GHG, emitter due to our relatively small operational footprint.

We are committed to evaluating carbon reduction opportunities over the coming years in-line with our business priorities.

Human Capital Management

We believe that creating a diverse, talented, and inclusive workplace is a central aspect to our culture, employee recruitment, retention and 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 key talent.

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

This culture and drive for performance are crucial in attracting and retaining key talent.

Our culture is centered around our fundamental values of:

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Talent Acquisition and Management

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.

This requires competitive compensation and benefits packages and an attractive culture in order to attract and retain skilled employees to support the growth and success of the company.

Our industry requires complex processes for product development and commercialization, necessitating deep expertise and experience across various disciplines.

Medical device companies compete for a limited number of qualified applicants to fill specialized positions, requiring competitive compensation and benefits packages and an attractive culture to attract and retain skilled employees.

As of December 31, 2024, we employed 288 full-time employees in the United States and Europe.

We believe that our employees’ understanding of 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 a manner that is engaging to our team, we utilize a variety of channels.

These include all-employee town hall meetings led by senior management, hosted monthly information sessions known as Knowledge Boosters, regular email and intranet updates from our chief executive officer and other key members of the executive team.

In addition, to assess employee perceptions in areas such as inclusion, professional development/training, reward/recognition, equity, engagement and overall organizational satisfaction, we conduct company-wide employee engagement surveys using an external survey platform.

Our management team evaluates and measures the results with prior periods and peer data and identifies potential opportunities for improvement.

To communicate these important topics engagingly, we utilize various channels, including all-employee town hall meetings led by senior management, company-wide information sessions known as Knowledge Boosters, and regular email and intranet updates from our CEO and other key executives.

Additionally, we conduct company-wide employee engagement surveys using an external platform to assess perceptions in areas such as inclusion, professional development, reward/recognition, equity, engagement, and overall satisfaction.

Our management team evaluates the results, compares them with prior periods and peer data, and identifies potential improvement opportunities.

Diversity, Equity and Inclusion

We are committed to a diverse, equitable and inclusive workplace where all employees, regardless of their gender, race, ethnicity, national origin, age, sexual orientation or identity, education or disability are valued, respected and supported.

Beginning in 2021, we made a commitment to comply with key elements of the MassBio CEO Pledge for a More Equitable and Inclusive Life Science Industry.

We continue to work on a multi-year approach at providing the key deliverables to meet our commitment.

This included the development and communication of a corporate Diversity, Equity and Inclusion Policy Statement as well as the creation of a Diversity Dashboard.

The Diversity Dashboard tracks the current diversity within the organization and is shared with the board of directors to provide engagement and oversight at the highest levels of the organization.

We have also conducted employee surveys and employee focus groups to discuss diversity and inclusion.

We will continue to enhance the diversity of our workforce through focused talent acquisition goals and development plans.

We are committed to a diverse, equitable, and inclusive workplace where all employees, regardless of gender, race, ethnicity, national origin, age, sexual orientation or identity, education, or disability, are valued, respected, and supported.

Beginning in 2021, we committed to key elements of the MassBio CEO Pledge for a More Equitable and Inclusive Life Science Industry.

We continue to work on a multi-year approach to meet our commitment, including developing and communicating a corporate Diversity, Equity, and Inclusion Policy Statement and creating a Diversity Dashboard.

The Diversity Dashboard tracks current diversity within the organization and is shared with the board of directors for engagement and oversight.

We have also conducted employee surveys and focus groups to discuss diversity and inclusion.

We will continue to enhance workforce diversity through focused talent acquisition goals and development plans.

Employee Development

The ongoing development of our employees continues to be a catalyst for our growth and success as a company.

Many 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.

We also provide financial support, including tuition reimbursement for qualified programs, as well as access to a broad-based learning management platform for self-directed learning and improvement.

The ongoing development of our employees is a catalyst for our growth and success.

Many of our employees have advanced degrees in their professions.

We support further development with individualized development plans, mentoring, coaching, group training, and conference attendance.

We also provide financial support, including tuition reimbursement for qualified programs, and access to a broad-based learning management platform for self-directed learning and improvement.

Competitive Pay and Benefits

To attract and retain qualified employees and key talent, we offer our employees total rewards packages consisting of base salary, a cash bonus, and a comprehensive benefit package.

We also provide equity compensation for certain employees based on various criteria, including their level within our company.

All employees globally are eligible to participate in the annual incentive cash bonus plan or a sales incentive plan which are aligned to both corporate and individual performance.

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

Our employee stock purchase plan, introduced in 2021, gives eligible employees the opportunity to purchase shares in Anika at a discounted rate.

Bravo, our global online employee recognition program, provides the opportunity for both peer to peer and manager to employee recognition, and has been well received by our employees.

To attract and retain qualified employees and key talent, we offer total rewards packages consisting of base salary, cash bonuses, and comprehensive benefits.

We also provide equity compensation for certain employees based on various criteria, including their level within the company.

All employees globally are eligible to participate in the annual incentive cash bonus plan or a sales incentive plan aligned with corporate and individual performance.

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

Our employee stock purchase plan, introduced in 2021, allows eligible employees to purchase shares in Anika at a discounted rate.

Health and Safety

We remain focused on promoting the total wellness of our employees, including resources, programs, and services to support their physical, mental, and financial wellness.

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

We also have adjusted attendance policies to encourage those who may be ill to stay home.

To further protect our on-site employees, we have provided personal protective equipment and cleaning supplies.

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.

We have established safety policies and protocols and regularly update employees on any changes.

We have adjusted attendance policies to encourage those who may be ill to stay home.

To further protect on-site employees, we provide personal protective equipment and cleaning supplies.

We also provide general information updates and support to ensure employees have the resources and information to protect their health and that of their families and co-workers.

Product Liability

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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.

Investors and others should note that we announce material information to our investors using our investor relations website (https://ir.anika.com/), SEC filings, press releases, public conference calls and webcasts.

We use these channels as well as social media, including LinkedIn and Twitter (@AnikaThera), to communicate with the public about our company, our business, our product candidates and other matters.

It is possible that the information we post on social media could be deemed to be material information.

Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on our investor relations website.

Information that is contained in and can be accessed through our website or our social media posts are not incorporated into, and does not form a part of, this Annual Report on Form 10-K.

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 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