Anika Therapeutics, Inc. (ANIK) Q4 2015 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to the Anika Therapeutics' Fourth Quarter 2015 Earnings Conference Call. [Operator Instructions] As a reminder this conference call is being recorded. I'd now like to turn the conference over to Sylvia Cheung, CFO. You may begin.

Thanks Nicole. Good morning, everyone. And thank you for joining our fourth quarter earnings call. With me on the call today is Anika's President and Chief Executive Officer, Dr. Charles Sherwood. During today's call, we will review our fourth quarter and full year 2015 financial results and key business highlights, which were summarized in our earnings release issued yesterday after market close and is available on our website at anikatherapeutics.com. In addition, a slide presentation is posted on our website in 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 during this conference call constitute forward-looking statements as defined in the Securities and 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. Please see our SEC filings for more information about factors that could affect our results. I'll now pass the call over to our President and CEO, Dr. Sherwood.

Thank you, Sylvia, and good morning, everyone. Please now turn to slide number three. 2015 was a successful year for Anika commercially, clinically, operationally and financially. End user momentum contributed to drive strong top line results. We are making progress in key pipeline programs and we achieved record product revenue for both the fourth quarter and full year which Sylvia will discuss in more detail. But what we are most enthusiastic about today are the substantial opportunities to further expand and disrupt the current clinical regiment and marketplace for orthopedics medicines. Opportunities that can drive growth to the next level and put Anika in a more central, dominant position among the competition. I want to use today's call to emphasize the four pillars of our long term strategy to position in a couple of superior sustained growth. They are international expansion, a promising pipeline, infrastructure enhancements to support future growth and strategic M&A to compliment organic growth. Now please turn to slider number 4. The first pillar in our growing international presence - I am sorry. The first pillar is our growing international presence. Concurrently, we have active commercialization relationships in over 55 countries and we are constantly pursuing new avenues for expansion globally including the world's major markets. As an example, we recently signed an agreement with a new partner for the commercialization of MONOVISC and CINGAL in China, the world's third largest viscosupplementation market. We continue to diligently pursue with new relationships that will give us the access to markets like Japan, the world's second largest viscosupplementation market. Moving on, our next pillar for growth is our clinical pipeline. For over two decades, we have been developing, manufacturing and successfully commercializing therapeutics based on our proprietary hyaluronic acid technology. That experience has translated into the core viscosupplementation franchise that we have today. ORTHOVISC is a leading multiple-injection therapy while MONOVISC is number two single-injection therapy. This business is growing and is poised to be the U.S. market leader in 2017. From an investor standpoint, we provide the opportunity for a stable cash-producing business that represents solid downside protection. In addition, unlike many companies in our space, we also bring a vibrant and near-term opportunity to further disrupt the market with new products. We are more than just our current viscosupplementation business. Our vision is to develop a portfolio of Orthobiologic products to serve the needs of orthopedic surgeons and their patients. We will have a significant presence in both the office and surgical settings driven by our powerful HA technology platform. This proprietary platform allows us to modify HA to bring to market differentiated and innovative products to address a wide range appellative, restored and regenerative indications. First, CINGAL expands the use of viscosupplements beyond the current osteoarthritis or OA therapeutic paradigm. While addressing OA there is a spectrum of treatment. Physicians initially recommend diet and exercise followed by NSAIDS and analgesics and then eventually steroids. In more advanced stages of the disease, HA injections are utilized and these are eventually followed by as a last resort total knee replacement. With CINGAL, we can expand these HA, targeting patients starting to use steroids, as well as those suffering the later stages of OA with the aim of pushing out the timeframe for total knee replacement. During the fourth quarter, CINGAL was approved in Canada and we expect the commercial launch shortly. We expect European approval within the next two months. As we announced last September, we received guidance from the FDA to advance the review of CINGAL through the drug pathway, not the medical device pathway. Since then we have been in discussions with the agency to understand the full scope of the clinical requirements related to our filing of a new drug application. Preliminary feedback from the FDA indicates that our generation of additional clinical data will likely be acquired before filing that NDA. The extent cost and specific details of this additional clinical work have not been finally determined at this juncture. However, if the FDA requires substantial additional clinical work, it may have a significant impact on our commercialization timeline or the product in the United States. As a result, we requested in our schedule to begin collaborative discussions with the FDA early next month and we hope to quickly reach a reasonable, expeditious and mutually acceptable path towards completing any necessary clinical work and submitting our NDA for the product. We remain confident in the merits of the already completed and highly successful CINGAL clinical program and the product's potential value to patients, both of which are underscored by our recently announced approval in Canada and our expected approval in Europe. Beyond CINGAL another pipeline opportunity is expanding the indications for our viscosupplementation products. Currently, our viscosupplements in the United States are only approved for use in [MI] [ph]. We are currently collaborating with our U.S. commercial partner to grow the applications for viscosupplement, including MONOVISC for use in the hip. Our aim is to be the first to market with this expanded indication within initial goal of achieving approval by 2020. The third major pipeline opportunity for Anika is solidifying our position in regenerative medicine with HYALOFAST. This product is a biodegradable scaffold that is used to enable cognitive degeneration in patients suffering from cartilage defects caused by trauma. We have demonstrated that HYALOFAST can generate high-aligned like cartilage in a single step arthroscopic procedure. As a result, it is non-invasive and will be less costly than those treatments available today. We are making progress towards eventual marketing approval in the U.S. During the fourth quarter, we commenced patient enrollment in our FastTRACK Phase 3 study. We believe this study will give us the pivotal clinical data necessary to support marketing approval for an indication for the repair of cartilage defects in the United States. Internationally, HYALOFAST and CE Mark in Europe and is available commercially in 18 countries with more than 6,000 users today. In addition to the development programs I have just reviewed, we have several innovative products in the pipeline which are designed to round out our product portfolio in both office and surgical settings. I look forward to further discussing our development pipeline during the next investor call in April after certain internal development progress is achieved. Please now move on to Slide number 5. The third pillar of our growth strategy is the strengthening of our corporate infrastructure. Most notably, we are developing our own direct commercial capability in the United States. While discussion of this topic has been associated with CINGAL, I want to emphasize that the advantage of having a direct capability will reach far beyond any one product. The ability to go direct empowers Anika to own its end-user relationships, gives us access to key data and provides us a larger share of the end-user revenue which in the long run would increase profitability. Most importantly, it allows us to flexibility to pair future product - future pipeline products with the commercial route that is most advantageous for Anika and for our shareholders. To this end, we have begun carrying out this initiative by engaging a contract sales organization. We see the development of our direct capability incurring in three stages. The first is setting up a medical affairs infrastructure to introduce pipeline products to the academic community, key opinion leaders and payers. The next is building commercial operations to prepare for the transactional aspect of any product launch. This would include coordinating distribution channels to ensure availability of products for decisions in patients. And then finally, there is the build out of a commercial sales force to represent product pipeline products to the end users. Our next infrastructure enhancement is the integration of our outsource manufacturing operations under one roof in our Bedford headquarter. These operations include those currently in Italy where our HA products are currently produced. Fully integrating our global manufacturing operations will allow us to accelerate product development, gain full control of our supply chain, and positively impact our margins. The fourth pillar of our growth strategy is to strategic M&A. While we have a strong foundation in our current products boasted by a robust pipeline, we believe the right acquisition can complement and enhance our organic growth trajectory. To this end, we have engaged a consulting firm to assist us in identifying opportunities. We will pursue strategic acquisitions to augment our technology, add to our product pipeline or provide enhanced commercialization capabilities. We will be deliberate in our evaluation. Looking for companies that have are in appropriate size can be easily integrated into our culture and operations and our accretive. Most importantly, any acquisition we make must accelerate our growth. Before I turn the call back over to Sylvia, I want to emphasize Anika's significant prospects. We have a proprietary and strong platform technology in hyaluronic acid. We have a market-dominant viscosupplementation franchise as well as major pipeline developments. We are strengthening our infrastructure to support our growth with a direct commercialization capability and integrated manufacturing to accelerate R&D. Furthermore, we look to augment our business through strategic M&A to enhance our capabilities and further drive our performance. Enclosing, we are well positioned with a clear strategy to deliver value for years to come. And with that, I'll turn it back to you, Sylvia.

Thank you, Chuck. Please now turn to Slide number 6. As Chuck mentioned, we are proud of our strong fourth quarter and full year 2015 results. And we are in an excellent financial position to feel our growth. Our topline during the quarter end year was driven by strong end-user demand. Product revenue increased 16% to $87.7 million for the full year 2015. The growth was even stronger in fourth quarter with product revenue increasing 43% year-over-year to $25.6 million. Total revenue was $30.9 million for the fourth quarter and $93 million for the full year. As discussed on our prior earnings call, Q4 U.S. ORTHOVISC and MONOVISC patters resumed to a normal pattern after Mitek included its inventory rebalancing activities in the third quarter of 2015. In the fourth quarter, we also received a milestone revenue of $5 million from Mitek from MONOVISC end-user revenue surpassing $50 million in the U.S. in a 12 month consecutive period. On past conference calls, we have provided a market share estimate as a metric to track out progress against the competition. Following the third quarter, we reported our domestic share at 27%. We saw strong end-user demand in 2015 as evidenced by the 24% in U.S. ORTHOVISC and MONOVISC end-user revenue growth to 2015 from 2014 with U.S. MONOVISC end-user revenue more than tripling during that period. At year end, our and our partner's message for estimating market size and hence our share changed to some degree based on new third party estimates. To remain conservative and transparent, we have adopted those new estimates which put our year end market share at 25% to 26%. This methodology change speaks to the difficulties of sizing market share. But it does not take away the fact that we are in a leadership position. Our revenues are growing and we are on our way to achieving the number one position in the United States in 2017. We continue to deliver strong growth margin for Q4 and full year 2015 driven by favorable revenue and product mix. Gross margin was 75% for Q4 and 76% for the full year. This strong performance carried down to our bottomline as well. In Q4, we reached a diluted EPS of $0.72 per share, an increase of $0.21from last year. Diluted EPS for the full year 2015 was $2.01 compared to $2.51 for the full year 2014. Please recall, 2014 results reflected a favorable impact of $30 million of licensing, milestone and contract revenue related to the commercialization launch of MONOVISC in the United States. For the full year 2015, excluding milestone payments, our earnings grew nearly 40%, estimate to our strong operating performance in end-user momentum. We ended the year with approximately $138 million in cash and investments. This increase was filled by our ability to generate cash from operations. As we have previously discussed, we have several uses for this cash. The first is to continue to build out of our corporate infrastructure, including the integration of our manufacturing operations at our Bedford, Massachusetts headquarter. M&A will also be an integral part of our strategy for cash deployment as Chuck discussed earlier. In addition, as we stated in a separate press release last night, we planned to enter into a $25 million accelerated cash repurchase agreement. Through which we are committed to return value to our shareholders. We view this return of capital as they balanced and prudent capital allocation. It underscores our confidence in our business and our ability to consistently generate enough cash to fill our operations, and later ground for our future growth, at the same time returning value to shareholders. Lastly, returning to guidance for 2016. For the year, we expect total revenue growth to be in the mid-teen percentage range primarily driven by continued growth in our viscosupplementation franchise as well as contribution from international CINGAL revenue. Excluding the impact of potential milestone revenue in 2016, total revenue maybe in the high-single to low double digit percentage range. As a result of this growth in revenue and the planned initiative we discussed on this call, we expect operating margin to be around mid-30% to 40% range for 2016. This target is well above industry standard and represents a normal operating results going forward, given our robust top line growth. Should we decide to further accelerate our R&D efforts or take on additional strategic initiative, operating margin will vary from this range and we will provide updates at the appropriate time in the future. In summary, Anika made important strides in 2015 in all facets of our business: commercially, clinically, operationally and financially. The market for our commercialized product is growing. We have a product pipeline that lays the foundation for our strong ambitions. We are strengthening our infrastructure to support our expansion. And we continue to deliver strong performance that underscores the exciting momentum we are seeing in our business. And with that, we are happy to take your questions.

[Operator Instructions] Our first question comes from the line of Mark Landy of Northland Capital. Your line is now open.

Good morning, guys, and congratulations on the quarter.

Good morning, thank you.

A bunch of questions here. So I'll ask one and I'll jump back in the queue. Chuck, you did mention signing an agreement with China and accessing that market. And also Japan, which has been on the radar screen for some time. Can you just give us an overview of the regulatory status of your products in both China and in Japan and what do you think the timing of market entry is to China and then to Japan?

Okay, Mark. I will address Japan and let Sylvia talk to China, to give her chance here. Japan is difficult market. Japan is populated by - in the viscosupplementation arena by very low cost multiple-injection products. And we will have to carve out initiate there if we are going to be successful. We have been working on this for a while. Part of the difficulty is there is one product that's approved from the U.S. and Japan right now. It's in this three injection, it's not doing well. There have been some adverse events, which people of Japan aren't used to. So it's making things difficult. We will have to run a clinical trial in Japan when we find the partner. We have been talking to several people. We need to just continue. We have some meetings coming up in the next three or four months. We have some more interest and we will actively pursue that. But the timing of course if we have to run a clinical trial is going to take a few years for sure. We are also by the way, there is interest not only in MONOVISC, but also in CINGAL. I suspect however that because of pricing and manufacturing cost and the low cost of products in Japan that ORTHOVISC is pretty much off to tail. Now, I'll turn it over to Sylvia to give you the China update.

Sure. Similar to Japan, the pricing situation in China is comparable to what Chuck described earlier in Japan. The partner that we recently signed is a small-medium-sized company. The target that we were going for, they have a pretty deep reach in China with 34 offices nationwide and focused in key cities, major population clusters where these treatments are currently being performed. They have a hybrid direct sales. They have about a couple of 100 sales persons within the company and they also subcontract with a number of sub distributors covering the entire nation. From a regulatory standpoint, as you know China requires local clinical trials and our plan is to initiate - our distributor's plan is to initiate the trail within approximately in years time and then it will take couple or three years to complete the related clinical trial as well as the regulatory process. So this is certainly in the three to five years timeframe. And from a revenue standpoint, we do expect to see double-digit million dollars of revenue based on the existing contract. But certainly we will continue to monitor the market as we move along the regulatory pathway and it's following the development of the market growth. So those are the key highlights.

I have only one thing to add. I would change the word trial to trials, because our arrangement is to our both MONOVISC and CINGAL.

Sorry. Just a clarification, Sylvia, you mentioned you will receive double digit revenues. Is that -

Under the Partner Group?

Yes. Under the existing contract, so is this for ORTHOVISC or they are the current distributor for ORTHOVISC?

No. This is for the new contract. It's for MONOVISC and CINGAL. And after product approval and certainly after a launch period, we do in the existing contract have the targets of double digit revenue from this territory based on those two products.

Okay. So to clarify, there is no current revenue, no current contract. This is people for any other product.

No revenue for our current year as the products aren't approved yet. We will have to complete the clinical and regulatory requirements and then the products can be thrilled and we expect to receive double-digit revenue after the products are on the market.

[Operator Instructions] Our next question comes from Joe Munda of First Analysis. Your line is now open.

Good morning, Dr. Sheerwood and Sylvia, how are you? For my first question is for you Chuck. M&A seems to be playing more a role. Here you talk a little bit more in detail for us as for as possibly - and those in the consulting firm. As far as targets are concerned on industry, would you move outside of HA into other areas or is HA continuing to be the focus on your M&A strategy as you go forward?

HA or HA compliant with other things will always be the focus of our organic growth strategy, at least in the foreseeable future. Although even having said that, we are looking at some other products where it involved HA, but HA may not be the main contributor. Certainly in our M&A efforts we're not necessarily looking for complementary HA products at all, but other things. Things that will enhance our offerings primarily in the office setting but may be also in the surgical setting to orthopedic customers. That answered your question?

It does. Switching gears to Sylvia. You guys talked about total revenue growth in the mid teens and then I'm not sure if I got this right. Just now you talked about single digit to low double-digit growth. So the revenue growth that you were talking about, were you talking mid-teens product growth or total revenue growth.

Thank you for the question. I think because of the milestone revenues consecutively in a couple of years that's causing some confusion what we are trying to do is to comment on total revenue going forward, but we also want to provide some additional clarity on what we assumed in that total revenue. So the prepared remarks there was just to provide some clarity on - that there is a potential milestone revenue that we have incorporated in the total revenue, mid teen percentage range. Obviously if that does not happen, we'll have an impact and we are trying to give a little bit more color on what the impact would be. But overall, we are indicating a mid teen total revenue growth. So that was the clarity or at least that we were - I was attempting to provide in the prepared remarks.

Let me just augment that just to that. As Sylvia said, because of these large milestone payments, they came out, it seemed to make sense at the time to talk about product revenue and total revenue. We don't anticipate going forward milestone payments of that magnitude. As a consequence, just to try to make it simpler to understand. We are just going to try to talk only about total revenue going forward. Almost all that virtually, although come from product anyway. So this is the situation for you, Joe, is to be able to - hopefully this will make your modeling a little bit easier.

Thank you. Our next question comes from the line of Mike Petusky of Barrington. Your line is now open.

Hi, good morning. Let me just drill down on that guidance question a little bit more. So when we are looking at the mid teens revenue growth, I guess of the - of that what's called 14%, 15%, how much comes from kind of incremental viscosupplementation? How much comes from international CINGAL revenue? And how much potentially comes from incremental milestones in '16 to jug up kind of a rough breakdown of that?

That's a lot of details but at the high level the -- from order of magnitude standpoint, the U.S. MONOVISC revenue would be in the lead from a revenue contribution standpoint followed by ORTHOVISC and international viscosupplementation. And the one important factor for this year is the international launch of CINGAL, both in Canada as well as in European countries. That will contribute a low single-digit $1 of additional revenue that we previously didn't have.

On a much smaller level for next year but going forward, we are starting to really nice synergy between the sales of HYALOFAST and MONOVISC. They seem to complement one another and it won't have a huge impact on our 2016 revenue, but having both products in hands of some of our distributors is growing both sides nicely. So maybe we will talk more about that in our guidance for 2017.

Great. If I can ask, what -- the potential milestone payments that you are contemplating is possible, what is that? What is that? Does that have to do with MONOVISC revenue or what specifically is that?

There are couple of potential items. Certainly, under the existing MONOVISC contract there are additional sales threshold. And if Mitek achieves lot of results, that is one source and the international larger agreements that we are looking to enter into is not inconceivable that there maybe milestones revenue from those as well.

But I think, what you should -- you should almost forget about that. Just say that revenue product is total revenue and it's coming from the product. That's the best assumption to make at this point. And then the numbers that we gave you represent that.

Okay. And I can tell you that guys don't want to overly focus on milestone. But if milestone were to come in is it likely they come in either on the back half or in the fourth quarter of '16?

Yes.

Okay. All right. One last question. I may have missed this if you spoke about it earlier. But the guidance on the last call in terms of the Bedford facility build out was $25 million over $18 to $24 months. Is that still kind of what you are anticipating in terms of that initiative?

Yes, it is.

All right, great.

Thank you. And our next question comes from the line of Mark Landy of Northland Capital Management. Your line is now open.

Thank you for taking my follow up. So Sylvia, I want to dig in to this a little bit on the milestone. This is I think the second time in the last couple of quarters that we are revisiting a guidance or a review number that was presented in the press release even before that's been augmented by, let's just call it interesting information on the call. So are you 100% sure that this milestone will be achieved and that it becomes a non-issue? Or are you 50% sure this milestone will be achieved, because just looking at the commentary or what was written in the press release versus the comments today, there is a set amount of variability to whether or not their number will be achieved on total revenues.

Hi. I don't think anyone can ever give a 100% guarantee. I think for the purpose of modeling, the focus should be on product revenue. I was trying to provide a little bit more color, but I think it looks like its creating some confusion. But to just kind of put it to a conclusive statements, the product revenue line, we expect a mid-teen percentage there from a growth standpoint. Any additional other revenue at point, there is no guarantees.

Okay. So very simply put, the mid-ten guidance is for product revenue growth. And that if you do get the milestones, that additional or is the mid-teens on total revenue growth including the milestone? Sorry, I'm just -- maybe just confused, but I need that clarity.

Sure. Mid teen for product revenue, if there is any incremental, it would be an increase.

Thank you. Our next question comes from the line of Tim Call of Capital Management. Your line is now open.

Congratulations on the great quarter and a great year. When we look at your product revenue growth of 43% in this quarter and you say it's due to normal inventory purchase growth pattern is resuming, why would that not recur again next quarter? So what would keep product revenue growth from being 40% next quarter?

Resume of inventory purchases.

The inventory were balancing activity with Mitek started in the fourth quarter of 2014. And it was a period of fluctuations for Q1, Q2 and Q3 of '15. So it really depends on the inventory, the volume, the inventory volume that they purchased in those periods last year comparing to their planned purchase this year. So what I can say is for 2016, first half of the year, from a revenue growth percentage standpoint, would be looking at pretty good growth, because last year Q1, Q2 was suppressed because of low inventory purchase. So that assumption certainly is there because of the timing and a pattern of inventory rebalancing.

MONOVISC is a rather new drug for you. I think I've heard you say, if you could just verify, MONOVISC might move up all the way to number one market share in 2017. Is that correct?

No. We didn't say that. We said the combination of the whole franchise, which now is ORTHOVISC and MONOVISC in United States. We hope that in '17 is number one market share position combined.

And for single-injection treatment -

About the market? Yes, the market leader right now is the Synvisc-One, which is a single-injection regimen. If they also have a multi-injection, but its very small compared to single. So it's not possible to take over the single-injection segment by yearend 2017. But combined with ORTHOVISC, we can be the market leader exiting 2017.

Thank you. And our next question comes from the line of Joe Munda of First Analyst. Your line is now open.

Just a quick follow up as far as the margins are concerned. Sylvia, how should we look at product gross margin going forward as far as -- in the past, you have talked about the expansion internationally can cause the margin rotation. You also have the build out in the facility. So what should we look for as far as margins are concerned? I mean, it's sequentially here, it tick down the quarter. So is this a normalized level or are we going to see a little bit more here in the low-70 range? How should we look at it?

Joe, as you mentioned the product gross margin has a number of variables impacting it. On one hand we have our continued cost reduction and efficiency improvement programs that we are implementing and we are seeing results from that that will push it up. On the other hand, given the pricing competition in international expansion, it puts a little bit of downward pressure on that. So when you look at all different factors, kind of, looking at all of them together are product expectation for 2016 is for product gross margin to be around and mid-70% range. And further out, I think we have to - as we go through the year, and look at our rate of international expansion, as well as domestic pricing dynamics we'll update that. But we are currently still staying at the mid 70% range from a top gross margin targets standpoint.

Thank you. Our next question comes from Tim Call with Capital Management. Your line is now open.

Just quickly on the balance sheet and cash flow. When I look at your balance sheet cash and your investments on the balance sheet, it looks like net of debt you have cash balance, cash and investments of $9 per share, is that correct? So, there's lot of cash - net cash net of all debt on your balance sheet for $40 or $45 stock? And you’re generating a lots of cash each year - cash flow from operations, free cash flow. Is it fair to say even though you have an extremely strong drug pipeline that’s going to come to market in upcoming years that even with the expenses with that, the expenses with streamlining things, manufacturing and building out some extension you have – you’re generating - so you’re going to have excess cash. So if we exclude acquisitions just look at what you have on your plate now with your upcoming spending over the next three years and share buybacks and so forth. You’re still going to have left over cash, you don't ever have to tap the markets unless you want to - for an acquisition, is that fair?

Yes, that is fair. I mean we have been able to generate rounds in the last couple of years 30 million to 40 million of cash from operations and we have some varying degrees of capital expenditure. We do expect operating cash to continue to more than offset any capital expenditure including the capital - share repurchase that we announced. So cash balance will continue to grow which really goes fast to the earlier comment that Chuck raised on the prepared remarks section in terms of our long term strategy to utilize therefore mergers and acquisitions activities to accelerate our growth.

[Operator Instructions] I'm showing no further questions at this time. I’d like to hand the call back over to management for any closing remarks.

Thank you, Nicole. We somewhat changed the format of the call little bit at least, my part of the presentation to talk a lot about growth and the future. We appreciate all of the accolades that we get for our quarter-over-quarter financial results in a prudent way that we manage our financial activities here in the company and we promise to continue to do that. And to try that deliver that same level of very strong financial performance but our Board, our management team, and our employees are most excited about the opportunities that lay in front of us to accelerate the growth of our business and personally I look very much forward to talking more and more about that on future calls assuming of course that our excellent records and financial results will continue. I tried to emphasize this a little bit when I said we are not just viscosupplementation Company. I'm trying to talk more and more about new products that are coming along which are growth oriented. So I wanted to leave you with that perspective and give you an explanation of at least how my remarks were structured. We are very proud of what we’ve been able to do. We fully believe that we’ll be able to continue to generate the same kinds of financial results but with our growth and with some of the initiatives we're taking on, I hope to really do even better. So thank you for your support. Thank you for your interest in Anika. Thank you for analyzing and owning our stocks and I'm looking to our next earnings call.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Have a great day everyone.