Anika Therapeutics Inc.

to Matt Hall, Director of Corporate Development and Investor Relations. Please proceed.

Thank you. Good morning and thank you for joining us for ANNICA's second quarter 2025 conference call and webcast. I'm Matt Hall, ANNICA's Director of Corporate Development and Investor Relations. Our earnings press release was issued earlier this morning and is available on our Investor Relations website located at .annica.com as are the supplementary PowerPoint slides that will be used for the discussion today. With me on the call are Dr. Cheryl Blanchard, President and Chief Executive Officer and Steve Griffin, Executive Vice President, Chief Financial Officer and Chief Operating Officer. We'll present our second quarter 2025 financial results and business highlights. Please take a moment and open the slide presentation and refer to slide number two. Before we begin, please understand that certain statements made during the call today 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 may include adjusted EBITDA, adjusted net income from continuing operations and adjusted earnings per share from continuing operations 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 operations and performance, but when considered with GAAP financial measures and the reconciliation of GAAP measures, they provide an even more complete understanding of our business. The reconciliation of these adjusted non-GAAP financial results, the most comparable GAAP measurements, are available at the end of the presentation slide deck and our second quarter 2025 press release. And now I'd turn the call over to our president and CEO, Dr. Cheryl Blanchard. Cheryl?

Thanks, Matt. Good morning, everyone, and thank you for joining us today to discuss ANICA's second quarter 2025 results. Please turn to slide three. This has been a meaningful quarter for ANICA, including a significant clinical update on Hyalafast. I'll begin today's remarks with that important development, but before I dive in, I want to note that our quarterly performance was in line with expectations, and we remain on track to deliver our full year 2025 guidance. I'll return to our financial results after walking through the Hyalafast clinical update. Earlier today, we shared an important announcement on the top-line results from our U.S. Pivotal Phase III Hyalafast clinical trial. This study, which enrolled its first patient in 2015, is a randomized controlled trial comparing Hyalafast in combination with autologous bone marrow aspirate concentrate, also called BMAC, to an active comparator as the control arm, a surgical technique called microfracture, in the treatment of articular cartilage defects. Superiority between the groups was to be determined with two pre-specified co-primary endpoints, percent change from baseline to two years in both CUSPAN and IKDC function. While Hyalafast demonstrated consistent improvements in treated patients across all measures of pain and function relative to microfracture, we're disappointed the study missed on achieving statistical significance on its pre-specified co-primary endpoints under the original statistical framework. Given the consistently demonstrated improvements over microfracture in this trial and the efficacy of Hyalafast demonstrated in numerous independent studies outside the U.S., we believe these results reflect limitations in the study context rather than the performance of Hyalafast itself. Importantly, we remain highly encouraged by the fact that Hyalafast has successfully treated more than 35,000 patients in over 35 countries since its launch in 2009 outside the U.S. Let me take a moment to dive into more detail on the study results. The trial required randomization to microfracture, which was considered the standard of care when the study was initiated. Microfracture served as the active comparator. However, over the last few years, the study has been significantly and it is no longer regarded as the standard of care for cartilage lesions in most countries, including the U.S. The study was likely impacted by both a higher subject dropout rate in the microfracture arm and missed visits during COVID, both resulting in missing data. This missing data resulted in a reduced evaluable sample size and complicated the statistical analysis. In accordance with FDA guidelines, ANICA statistically imputed missing data, which did not treat withdrawals from the microfracture arm as treatment failures. To be clear, Hyalafast demonstrated improvements over microfracture, but the study did not achieve statistical significance in the co-primary endpoints. Importantly, we did achieve statistical significance on several key secondary endpoints and other measures, including COOS Sports and Recreation Function, COOS Quality of Life, and Total COOS, all of which have served as the basis for FDA approval of the other cartilage repair products available in the U.S. In addition, because ANICA has sold Hyalafast outside the U.S. for over 15 years, we have a significant amount of clinical data from a number of independent international clinical studies, including a paper published last year with positive 15-year outcomes. We believe the totality of the data, including hitting significance on endpoints used for prior FDA approvals, statistically significant responder analyses, and multiple independent international studies, strongly supports the clinical value of Hyalafast as a single-stage, -the-shelf cartilage repair solution. This is especially compelling when compared to the current U.S. standard of care that requires two separate surgical procedures. Based on these results, we plan to submit the third and final PMA module on our original schedule in the second half of this year after data analysis has been completed. Once the data analysis is complete, we will provide further disclosure of the data. The submission will include post-doc analyses and additional endpoints that achieved statistical significance in this study that have previously been accepted by the FDA in other approvals, in addition to the robust international data. We remain confident in the strength of our data and look forward to working closely with the agency as they review our application through the Breakthrough Devices Program. In anticipation of upcoming discussions with the FDA, we are extending our commercial timeline to 2027 to ensure adequate time for a review and dialogue around the full data package. Hyalafast continues to represent a significant opportunity for ANICA to expand our leadership in regenerative solutions and deliver meaningful innovation to patients suffering from cartilage lesions. Turning to SINGHAL, I am pleased to announce that we made meaningful progress during the quarter, advancing the final steps toward NDA filing and remaining on track to initiate the bioequivalent study by year end. As a reminder, this bioequivalent study and the toxicity studies initiated earlier this year address the final requirements before submission. We plan to provide an update on the SINGHAL program timing after we start the bioequivalent study. Next, I'd like to provide an update on integrity. I'm pleased to acknowledge that we are in the middle of a year that integrity has already exceeded its full year 2024 performance and is currently on track to more than double in 2025, ahead of original expectations. And integrity led the 41% growth in regenerative solutions revenue this quarter. This exceptional growth reflects our early positive clinical data, strong market momentum, and increasing adoption across a broader base of surgeons. What's particularly encouraging is that surgeons are not only using integrity more frequently, but also expanding its application across a wider range of tendon repair procedures. While the shoulder remains the primary driver of the U.S. augmentation market, we see meaningful traction in other anatomies, including the hip, knee, and ankle, which together represent over $40 million in addressable market opportunity. In other news around integrity momentum, during the quarter, we received 510K clearance for two new integrity shapes and sizes that are planned to launch in a limited release by year end. These two new SKUs are designed to support repairs in both insertional and mid-substance Achilles tendons, patellar tendon, quadriceps tendon, and gluteus medius tendon, to name a few. The revenue contributions of these new shapes and sizes will be modest in the second half of this year as we continue to ramp up production and training activities. However, we expect them to positively impact future commercial sales for this critical product. This expansion further strengthens our ability to penetrate this addressable market and reinforces integrity's position as a versatile and scalable regenerative platform. Let me now walk you through the high level financial results for the quarter. I am pleased to report that we delivered financial results in line with expectations as we overcame difficult manufacturing yield challenges at the start of the quarter. I am proud of the work that our teams have done to overcome these challenges despite the financial impact that it had in the quarter. Revenue in the quarter was down 8%. However, we continue to demonstrate strength in our commercial channel, led by our regenerative solutions offerings, which were up 41%. Our OEM channel, although lower year over year, was in line with our expectations as J&J works to stabilize this important profitable channel for our business. In light of the near-term revenue pressure, we have taken proactive steps to reset our operating expense profile, driving a 17% reduction in total operating expenses year over year. Adjusted EBITDA was roughly flat for the quarter, while we continue to invest in our most promising commercial opportunities. Lastly, I will mention that we have successfully completed the transition services activities with respect to the divestitures of both Parkus and Arthur surface, and are now fully focused on our strategy, leveraging our proprietary helleronic acid technologies. With that, I will now turn the call over to Steve for a detailed review of our financial results.