Anika Therapeutics Inc.

Good morning, ladies and gentlemen, and welcome to Anika's first quarter 2023 earnings conference call. At this time, online journalism only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, May 9, 2023. I will now turn the call over to Mr. Mark Namaroff, Vice President, Investor Relations, ESG, and Corp Communications. Please go ahead.

Thank you. Good afternoon, everyone. Thank you for joining us for ANACA's first quarter conference call and webcast. Our Q1 earnings press release was issued after the close of the market today and is available on our Investor Relations website located at anaca.com as our supplementary PowerPoint slides that we used for the discussion today. With me on the call today are Dr. Cheryl Blanchard, President and Chief Executive Officer, and Mike Levitz, Executive Vice President, Chief Financial Officer, and Treasurer. Please take a moment and open the slide presentation and refer to slide number two. Before we begin, please understand that certain statements made today during the call constitute forward-looking statements as defined in the Securities Exchange Act of 1934. These statements are based on our current beliefs and expectations and are subject to certain risks and uncertainties. The company's actual results could differ materially from any anticipated future results, performance, or achievements. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today. Please also see our most recent SEC filings for more information about risk factors that could affect our performance. In addition, during the call, we may refer to several adjusted or non-GAAP financial measures, which includes adjusted gross margin, adjusted EBITDA, adjusted net income, and adjusted earnings per share, which are used in addition to results presented in accordance with GAAP financial measures. We believe that non-GAAP measures provide an additional way of viewing aspects of our operation and performance. When considered with GAAP financial measures, the reconciliation of GAAP measures they provide an even more complete understanding of our business. The reconciliation of these adjusted non-GAAP financial measures to the most comparable GAAP measurements are available at the end of the presentation slide deck and our first quarter 2023 press release. And now I'd like to turn the call over to our president and CEO, Dr. Cheryl Blanchard. Cheryl.

Thanks, Mark. Good afternoon, everyone, and thanks for joining us. Please turn to slide three. We're pleased to report that Anika had a positive start to the year. While our reported revenue showed growth of 3%, the core parts of our business were up 9% in Q1, as we've seen the environment for some orthopedic elective procedures improving. Osteoarthritis pain management revenue was stronger than expected in the quarter and remains a market leading business that continues to win globally. We were excited to see double digit growth in joint preservation and restoration in the quarter. which included early traction from our recent product launches with XTwist and RevaMotion, and international growth driven by geographic expansion and timing. Our OA pain business, including our sales and marketing partnership with J&J MyTech for Monovisk and OrthoVisk in the U.S., continues to provide a healthy financial foundation to support the investments driving our growth strategy. In addition to our market leading products in the U.S., we're also particularly pleased with our strong international performance as we grow market share of our OA pain products, especially Syngal, as more and more clinicians and their osteoarthritis patients realize the benefits of this truly next generation non-opioid OA pain product. With respect to Syngal, we are actively engaging with the FDA regarding next steps for U.S. regulatory approval and exploring commercial partnerships to advance Singal in the U.S. and select Asian markets. We're excited about our continued progress and momentum in our joint preservation and restoration portfolio. We had great traffic and training opportunities at our booth at the American Academy of Orthopedic Surgeons meeting in March, with a lot of interest across our full joint preservation portfolio. We're building traction and adoption as we continue to hear great feedback from surgeons following the Q1 full market release of X-Twist, Annika's cornerstone suture anchor system, as we increase awareness and educate surgeons about its flexibility and surgical versatility across procedures in the shoulder and the foot and ankle. We're receiving great early clinical feedback following the successful limited launch of our new RevoMotion reverse shoulder system, which significantly expands our shoulder arthroplasty portfolio. Patients are doing well in their early post-op visits, some now out to four months, and surgeons are extremely pleased with the post-op x-rays. We look forward to building on this momentum ahead of a full launch, which we're continuing to target toward the end of this year. Tactuset, ANICA's regenerative solution for insufficiency fractures and hardware augmentation, received an additional 510K clearance, further building the Tacticet franchise. Tacticet is now cleared for use with autologous bone marrow aspirate, a key component in regenerative healing. I'm also happy to welcome Gary Fischetti, who was appointed as a new independent director in April. Gary brings decades of relevant experience in the medical device industry, including more than 35 years at Johnson & Johnson with both domestic and international leadership responsibilities. And we look forward to leveraging his expertise as we advance our strategy and capture the significant opportunities ahead. Now moving on to slide four. Over the past three years, we've been investing with purpose to fundamentally reposition ANACA to be a global leader in joint preservation with a focus on early intervention orthopedics, leveraging our core expertise in hyaluronic acid and our design heritage of early intervention bone sparing devices. Our efforts have successfully expanded Anika's market opportunity from $1 billion to more than $8 billion today and created a powerful growth engine for years to come as we remain focused on launching new products in the high-opportunity spaces and faster-growing segments within orthopedics. The first update is for Tactuset. As a reminder, Tactuset is an important franchise we're building and a product we continue to get great clinical feedback on. We're now in the process of launching the new indication for use with bone marrow aspirin as we continue to expand our portfolio for regenerative healing with an additional 510K planned. Moving on to X-Twist, now that we're in full market release, we are also developing a biocomposite version as we continue to expand on our differentiated suture anchor platform. As we announced last quarter, we've developed a new hyaluronic acid based arthroscopic regenerative rotator cuff patch system, which will further strengthen Anika's growing and differentiated shoulder portfolio. We've initially designed the patch for the shoulder to provide augmentation to the tendon to support healing for rotator cuff tears. Anika's patch is mechanically stronger and further improves regenerative capacity compared with the first generation collagen patches on the market. We've completed multiple 510K submissions at the end of 2022 ahead of a planned launch next year. We'll share additional details about the product once the entire system has been cleared and we're gearing up for first surgeries. In short, we believe our regenerative patch will be a game changer for patients and Annika as it helps complete an innovative and highly differentiated shoulder portfolio. We are also advancing our longer-term opportunities, which will further augment and reinforce Anika's growth once they are available in the U.S. In addition to our active engagement with the FDA regarding next steps for Singhal approval, which we believe could potentially double our $1 billion addressable market in OA pain, we're working to enroll the final subject in the pivotal Phase III clinical trial for Halifast, our highly differentiated, single-stage, off-the-shelf cartilage repair product. Last quarter, we announced that HyloFast was designated as a breakthrough device by the FDA, allowing for prioritized interaction and review to enable patients faster access to new therapies. We remain on track to file a PMA for HyloFast in 2025, and given its differentiation as a single-stage, off-the-shelf solution, we believe that HyloFast has significant market-expanding potential. As you can see on slide five, We're focused on building a robust and differentiated shoulder portfolio by providing solutions for the full spectrum of rotator cuff pathologies that brings a unique value proposition to surgeons across the ASC and hospital settings. This positions ANACA for continued growth as we capitalize on the approximately $2 billion market opportunity across the shoulder continuum of care. Prevalence and progression of rotator cuff disease needs multiple strategies and solutions, which Anika is addressing through our comprehensive portfolio of products across sports medicine, regenerative solutions, and arthrosurface joint solutions. RevaMotion is a highly differentiated reverse shoulder system that now gives Anika access to the full shoulder replacement market with a focus on a bone-sparing design and a streamlined two-instrument tray system. The launch of RevaMotion has dramatically enhanced the opportunity to drive our Arthrosurface Joint Solutions products, specifically OvaMotion and Inlink Lenoid, our total shoulder system. In sports medicine, our X-Twist design facilitates soft tissue repairs that other systems are unable to accommodate. We're adding new surgeon accounts and surgery centers as the product gains acceptance, and we drive deeper penetration into those accounts. On the regenerative side, we offer the innovative solution of Tactuset to augment hardware, specifically with suture anchors when surgeons encounter poor quality bone. This provides a truly meaningful solution to achieve a strong repair. With the recent launch of X-Twist, we now have the opportunity to cross-sell Tactuset for augmentation, providing an additional growth driver as Anika products are used in more rotator cuff procedures. Finally, As we look to its planned launch in 2024, our HA-based arthroscopic regenerative rotator cuff patch system provides a strong foundation in regeneration alongside Tactuset. Given the attractive market for regenerative patches, we believe this arthroscopic system has expansion opportunities beyond the shoulder and will also be a key driver for growth. With that overview, I'll now turn it over to Mike for a review of our first quarter 2023 financial performance. Mike?