Good day ladies and gentlemen and welcome to the Third Quarter 2012 Anika Therapeutics Investor Conference Call. My name is Delouse and I will be your coordinator for today. At this time, all participants are in a listen only mode. We will conduct a question and answer session towards the end of this conference. (Operator Instructions). As a reminder, this call is being recorded for replay purposes. I will now turn the call over to Mr. Kevin Quinlan, Anika’s Chief Financial Officer. Please proceed, Mr. Quinlan.

Thank you, Delouse, and good morning everyone. If you have not received a copy of the Anika news release which was issued yesterday after the market closed or you would like to be added to our contact list, please contact Sharon Merrill Associates at 617-542-5300. The news release is posted in the investor relations section of our website at www.AnikaTherapeutics.com. In addition, a slide presentation is posted on the Anika website that illustrates some of the points that we’ll be covering during today’s call. The slides can be found on the investor relations section under the Events, Webcasts, and Presentations tab. We invite you to take a moment to open the file and follow the presentation along with us. Please turn to slide number two. Before we begin please remember that the statements made in this call which are not statements of historical fact are forward-looking statements as defined in the Securities Exchange Act of 1934. Words such as will, believe, appear, plan, expect, anticipate, forward, seek, continue, target, goals, objectives, on track, intend, pursue, outlook, as well as other expressions which are predictions or indications of future events or trends and which do not constitute historical matters identify forward-looking statements. These statements are based on the current beliefs and expectations of management and are subject to significant risks and uncertainties. The company’s actual results could differ materially from any anticipated future results, performance, or achievements described in the forward-looking statements as a result of a number of factors which include those set forth in last evening’s press release and the company’s SEC filings. Please turn to slide number three as I turn the call over to Anika’s President and Chief Executive Officer, Dr. Charles Sherwood.

Thank you, Kevin, and good morning everyone. Thanks for joining us today. I'll begin today's call with the third quarter update. Kevin will review the financials and then I'll conclude our prepared remarks with comments on the business outlook. After that we'll open up the call to your questions. The third quarter was one where the underlying fundamentals of Anika's business remains strong and we made good progress on many of our goals. But our financial results fell short of our expectations. Demand for Orthovisc is growing and we continue to see results from our expansion efforts in international markets. Despite these positives total revenue was down 20% from the third quarter last year. Our major challenge was a manufacturing scale up issue in Bedford that prevented us from filling all of our Orthovisc orders in the quarter. We also face some unexpected headwinds in our business in Italy and other parts of Europe, largely due to the recession in those markets. In addition to these items, we saw the anticipated slowdown in the ophthalmic franchise as our business with Bosch and Lomb settles at a steady state. The lower revenue impacted our profitability for the quarter. Net income of $1.6 million or $0.11 per diluted share as compared to $3 million or $0.22 in Q2 last year. While we have completed a successful shutdown of our Woburn facility and the transfer of full manufacturing to Bedford, the ramp up of production in Bedford was not uneventful, and scale up issues on one our manufacturing lines resulted in the unfilled orders in Q3. We have resolved these issues and are now manufacturing legacy product at Bedford higher run rate and we expect to fill all of the delayed orders in the fourth quarter and finish 2012 on plan with a…

Thanks Chuck. Please turn the slide number seven in the presentation. Chuck talked about the pluses and minuses from a business perspective. And as he said, total revenue is down 20% from the third quarter last year coming in a $14.8 million. As usual, revenue at the franchise level and by geographic region have been included in yesterday's earnings news release, so I won't repeat those details today. The more relevant point is what factors contributed to the $3.7 million declined in total revenue from Q3 last year. Orthovisc revenue was down $1.1 million year-over-year, reflecting the impact of shipments delayed by the manufacturing issue in Bedford. Sales of Orthovisc worldwide would have been $2.8 million higher. In addition, S.r.l's Italian sales decreased by $470,000 year-over-year, 70% of which was in the advanced wound care area. Foreign currency rates also played a role negatively impacting revenue by over $320,000. Finally, US advance wound care sales were off a $175,000 as our U.S. partner under performed. Finally, ophthalmic revenue was down $2.7 million from Q3 last year primarily because Q3, 2011 was a record quarter for ophthalmic revenue driven by the timing of orders from Bausch & Lomb, as previously discussed. We do still expect a strong revenue year for 2012 and towards that end year-to-date revenue is $2.4 million or 5% higher than last years same period lead by Orthovisc and our Veterinary product high disc. Net income for the third quarter of 2012 was $1.6 million or $0.11 per diluted share versus $3 million or $0.22 per diluted share in Q3 of 2011. The decline was primarily due to lower sales just outlined. For the year, at $0.51 earnings per share we are running 31% or $0.10 per share higher than we did in the first nine months of…

Thanks Kevin. Picking up where Kevin left off on the business outlook as summarized on slide number 10, our business remains strong and growing. We weathered a difficult third quarter and are well on our way to a financially successful 2012. For the year, we expect to be in the range of $70 million in revenue and $0.74 for EPS. Underlying product demand for Orthovisc continues to grow and our partner Mitek is doing a great job in capitalizing on this potential. We have a major pipeline product in Monovisc that we continue to believe will receive FDA marketing approval. We’re leveraging our S.r.l technology platform with short and medium term product development initiatives. We see growth in other existing S.r.l products Hyalobarrier and Hyalofast among them. We are also gaining traction in our strategy to diversify our international geographic presence. Bedford is fully inspected and approved in transferring S.r.l's gel based product manufacturing to Bedford will be an important advance for us in terms of future growth and profitability. And looking farther ahead, we are strategically focused on both our product pipeline and our distribution network to drive top line growth. And with that, I will turn the call back over to [Dalu]so that we can take your questions.

Thank you. (Operator Instructions) And the first question comes from the line of Mark Landy of Summer Street Research. Please go ahead, sir. `: Kevin, just a quick clarification. Did I hear you correctly you said around $2.8 million of the bills were impacted in the quarter?

That’s correct. Mark Landy – Summer Street Research: Okay, let’s assume there were $2.9 million impacted your number would have been close to $12 million for the quarter, is that correct?

$12 million for the quarter? Mark Landy – Summer Street Research: Yeah, doing the math on Orthovisc.

Oh on the Orthobiologics franchise, yes. That’s correct, Mark. Mark Landy – Summer Street Research: Okay, great. And then Kevin how much, what is the cost of working process from the glitch, can you clarify that for us?

Well, it was a significant number which is why we mentioned it. It’s a significant portion of the decline in the gross profit margin to 48%. Without that and with a higher sales volume we would have had a much more comparable gross margin versus the prior year. Mark Landy – Summer Street Research: Okay, so I know that I suppose that gets into some of your competitive issues that you don’t want to make public but if I kind of normalize the PNO versus a run rate closer to around $17 million to $18 million. Would that be a fair way to try and understand the impact?

Yes. Mark Landy – Summer Street Research: Okay. And then you did mention that most of that shortfall would be picked up in the fourth quarter and obviously that gets you to a guidance of $70 million. Is 100% of that $2.8 million going to be picked up in terms of committed orders or just the vast majority being kind of in the 70% to 80% range?

We are expecting all of that 2.8 to be made up in the fourth quarter. Mark Landy – Summer Street Research: Okay. So just for modeling purposes it would be fair to just move that 2.8 into the fourth quarter?

Yes. Mark Landy – Summer Street Research: And then would we, you know, obviously the equity have an impact on the margins so do we, should we think about the margins being impacted from that volume increase or shall we just think about a normalized margin in terms of gross margin running through the fourth quarter?

You will see a pick up in the margin for the quarter to bring us to that level and for the year it will be somewhat comparable, little bit lower than the prior year because of the working process loss.

Thank you. The next question is last from the line of Greg Garner from Singular Research. Please go ahead, sir.

A follow up on the Orthovisc issue. Are you hearing anything from Mitek about the any issues regarding the difficulty in delivering during the quarter? Is there any impact there in the marketplace?

This is Chuck speaking, we ran the inventory, their inventory down pretty low but if you are , if you are speaking to harming the brand or reducing the sales potential, no, we didn’t, we didn’t have any issues and we don’t anticipate any issues.

Okay, and so I guess I am glad to hear that but also want to get a clarification about you record sales to the end customer as they through Mitek or so there is no -- did they have ex inventory or they had to work down, was there any of that going on in the quarter with Orthovisc?

Greg, a portion of our revenue is from the product that we shipped to Mitek and then another portion is based on a percentage of what they actually sell during the quarter. So that latter piece may have been impacted a little bit.

Okay. Yeah, yeah I understand.

Actually both these is likely had an impact.

So no problem in meeting the additional 2.8 million for the current quarter and are there any production constraints in meeting the higher revenue the 2.8 million adding that on to the fourth quarter?

No, we don’t see -- we don’t see any issues at this point in achieving that.

Okay. And absent that additional 2.8 moving into the fourth quarter are you still seeing sort of the same demand factors that have caused Orthovisc to have normally a little bit higher fourth quarter seasonally? I mean looking back over the last few years it seems like that’s the pattern so just want to see is that still happening in the absent this you know, movement of revenues from third quarter to fourth quarter?

We do expect the fourth quarter to be stronger than typically stronger than the other three quarters. So at this point not a whole lot of feedbacks to suggest otherwise.

And on the ophthalmic you mentioned that it has settled at a steady stage does this appear to be the quarterly run rate for a while, where the 1.8 million I think it was for the quarter?

We are not clear yet what that amount would be for 2013 but we do know that will be in a likely in a lower run rate than what you have been seeing so far.

Okay, and when S.r.l gel products come over to the Bedford couple of items question on that, how long do you think it would take to work down the inventory in Europe and what might be the margin impact be there after that’s worked down?

Product by product thing.

Yeah, it does very considerably -- without going into too much detail, there is certain minimum purchase requirement under the existing third party contract and so some products will carry into the first quarter that there was still so in the old inventory and others we will be able to start earlier on in the first quarter, but certainly by the middle of the year we should be, the vast majority of the sales of the ACP products will be manufactured here in Bedford.

For the Monovisc was mentioned that looking for geographic expansion outside the US, can you tell us a little bit more about that as to what areas and what kind of timeframe might be involved with that?

We are looking to, there are some markets in Europe that we are looking to get more deeply entrenched in or to begin to get some sales. There are other places of big markets some of these which you might be called the BRIC countries where we are not present. We also have some opportunities to move more strongly into Asian countries, maybe outside of China. Those moves will require some clinical investments and as a consequence will take longer time. So those are really investments for the future. Those will also require that we execute some partnership agreements because we will be expecting our partners to fund that clinical endeavor. So there is some short term Europe type possibly South America type things that we may be able to expect in 2013, early 2014 and some of the other Far East type initiatives are going to take longer, because they are going to require clinical efforts.

Okay. And the US progress as I recall excuse me, they ask for additional information about some of the data from the clinical tests and you provided that in other, they are asking for more clarification on that data. They are just drilling deeper into that as that the extent of this last request from the FDA?

We submitted some additional data from consultants about the way to look at the clinical benefits of these products and we submitted some additional analysis of our clinical study data that we had not submitted in that format before. This information was accepted by the FDA, although they didn't have to accept it. So we believe that's a good sign and they sent back some clarification questions on all of that material that we submitted which were relatively straight forward and we provided that information a few weeks ago and so we expect, as I said a response back from the FDA within a month or so.

Okay. And if that's were to be favorable, so that would have come by the end of the year, how long would it take to start marketing that ramping that up?

We are having those discussions with Mitek as we speak, but I think you have to believe that it would take, you will have to negotiate the labeling, you have to get a lot of the launch strategy in place. So it is going to take I would expect at least six months.

Thank you. The next question comes from the line of Wally walker from (inaudible). Please go ahead, sir.

A couple of clarifications for these. When you talk about reporting record fourth quarter revenue, is the comp fourth quarters or all quarter implied in your guidance of $70 million which seem to be record quarter period?

Yeah, well, the intention there was all quarters and not just referring to fourth quarters.

And when you talk about improved profitability, by what metric that you are talking about and compared to what?

We will look at both operating and net income.

And margins?

You know, you are asking like an operating income margin?

Yes.

We haven't been really, I am not sure that I would describe it that way, but I think as Chuck mentioned in his comments, in his wrap up a range of getting EPS in the range of $0.74 would not be an unreasonable expectation based on that revenue accomplishment. So, that should give you an idea as to what kind of margin that would turn into.

Okay. And lastly, in August, there was a comment about the second half of 2012 starting with strong fold momentum. When did the manufacturing issue the lack of <> manifest itself?

Yeah, with shortly after that, Wally.

(Operator Instructions). Thank you, and the next question comes from the line of Lawry Anderson from Raymond James. Please go ahead, sir.

Earlier this year you gave us rather favorable progress report regarding the possibility of having Orthovisc approved for a trial of the shoulder through your partnership with Mitek, could you comment on this at this time?

I can comment on that, its Chuck. We have been -- it was a little bit of a complicated situation but the trial for the shoulder was run by Mitek even though it was our PMA. Three weeks ago we finally or two weeks ago or so we finally got all of the data in our hands and we were running through the analysis and more analysis now and it would be our intention to file that data with the FDA but I cannot at this point give you a specific timeframe for that.

Understood.

I say file that data with the FDA you understand I believe that these viscosupplementation products receive a significant amount of scrutiny and the rules sometimes change in the middle of the exercise. So all I can really commit to at this juncture is that we will file and enter into negotiations with the FDA I had no idea really of the timing of being successful at the end of the process but well I shouldn’t say that I say the timing at the end of the process is really could be cover a very wide range.

Thank you. We have no further questions I would now like to turn the call over to Mr. Sherwood for closing remarks.

Okay, thank you, Dalu, and thank you to everyone who joined us today. I think as we went through our comments there are a lot of things that we projected to happen over the next quarter and we look forward to reporting our progress on those to you in our fourth quarter conference call thanks again.

Thank you for your participation in today’s conference. This concludes the presentation you may now disconnect have a great day, thank you.