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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2002

or

Commission File Number 000-21326

Anika Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

(Registrant's Telephone Number, Including Area Code): (781) 932-6616

Securities registered pursuant to Section 12 (b) of the Act: None

Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, par value $.01 per share

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes o     No ý

        The aggregate market value of voting stock held by non-affiliates of the Registrant as of June 28, 2002 was $8,240,000 based on the average bid and ask price per share of Common Stock of $1.17 as of such date as reported on the NASDAQ National Market. Shares of our Common Stock held by each executive officer, director and each person or entity known to the registrant to be an affiliate have been excluded in that such persons may be deemed to be affiliates; such exclusion shall not be deemed to constitute an admission that any such person is an "affiliate" of the registrant. At March 24, 2003, there were issued and outstanding 9,934,280 shares of Common Stock, par value $.01 per share.

DOCUMENTS INCORPORATED BY REFERENCE

        Certain information required in response to Items 10, 11, 12 and 13 of Part III are hereby incorporated by reference from the registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on June 4, 2003. Such Proxy Statement shall not be deemed to be "filed" as part of this Annual Report on Form 10-K except for the parts therein which have been specifically incorporated by reference herein.

FORM 10-K
ANIKA THERAPEUTICS, INC.
For Fiscal Year Ended December 31, 2002

        This Annual Report on Form 10-K, including the documents incorporated by reference into this Annual Report on Form 10-K, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding:

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our future sales and product revenues, including possible retroactive price adjustments and expectations of unit volumes or other offsets to price reductions;



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our efforts to increase sales of ophthalmic viscoelastic products;



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our manufacturing capacity and work-in-process manufacturing operations;



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the timing of, scope of and rate of patient enrollment for clinical trials;



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development of possible new products;



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FDA or other regulatory approvals and/or reimbursement approvals of new or potential products;



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our current strategy;



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negotiations with potential and existing customers, including our performance under any of our distribution or supply agreements or our expectations with respect to sales pursuant to such agreements;



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the rate at which we use cash and the amounts used; and



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possible negotiations or re-negotiations with existing or new distribution or collaboration partners.

        Furthermore, additional statements identified by words such as "seek", "designed," "believe," "expect," "anticipate," "intend," "will," "develop," "would," future," "can," "may," "could," and other expressions that are predictions of, or indicate future events and trends and which do not relate to historical matters identify forward-looking statements.

        You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control, including those factors described in the section titled "Risk Factors and Certain Factors Affecting Future Operating Results," in this Annual Report on Form 10-K. These risks, uncertainties and other factors may cause our actual results, performance or achievement to be materially different from the anticipated future results, performance or achievement, expressed or implied by the forward-looking statements. These forward-looking statements are based upon the current assumptions of our management and are only expectations of future results. You should carefully review all of these factors, and you should be aware that there may be other factors that could cause these differences, including those factors discussed in the sections titled "Business" and "Management's Discussions and Analysis of Financial Condition and Results of Operations" elsewhere in this Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future events or otherwise.

PART I

ITEM 1.    BUSINESS

Overview

        Anika Therapeutics develops, manufactures and commercializes therapeutic products and devices intended to promote the protection and healing of bone, cartilage and soft tissue. These products are based on hyaluronic acid (HA), a naturally occurring, biocompatible polymer found throughout the body. Due to its unique biophysical and biochemical properties, HA plays an important role in a number of

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physiological functions such as the protection and lubrication of soft tissues and joints, the maintenance of the structural integrity of tissues, and the transport of molecules to and within cells. Our currently marketed products consist of ORTHOVISC®, which is an HA product used in the treatment of some forms of osteoarthritis in humans, and HYVISC®, which is an HA product used in the treatment of equine osteoarthritis. ORTHOVISC® is currently approved for sale and is being marketed in Canada, parts of Europe, Turkey, and Israel. In the United States, ORTHOVISC® is currently limited to investigational use. We manufacture AMVISC® and AMVISC® Plus for Bausch & Lomb, Incorporated, which are HA products used as viscoelastic supplements in ophthalmic surgery. We also manufacture CoEase™ for Advanced Medical Optics, Inc., STAARVISC®II, for STAAR Surgical Company, and ShellGel™ for Cytosol Ophthalmics, Inc., each an injectable ophthalmic viscoelastic product.

        Our current strategy is to:

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improve the financial performance of our core business,



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successfully complete an ongoing Phase III clinical trial of ORTHOVISC® in order to secure FDA approval to market ORTHOVISC® in the U.S., and



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focus research and development resources on evaluating potential product applications, including possible collaborations with other parties.

        In 2002, approximately 59% of our revenue was from the sale of ophthalmic viscoelastic products to Bausch & Lomb. We added three new distributors of ophthalmic viscoelastic products during 2001 and another new distributor in 2002. Sales to these new distributors amounted to approximately 16% of our total revenue in 2002. We intend to continue to increase business in this market in 2003. With respect to ORTHOVISC®, we are actively seeking distributors for international markets as well as considering U.S. marketing and distribution alternatives in the event that the ongoing Phase III clinical trial is successful.

        The following sections provide more specific information on our products and related activities:

ORTHOVISC®

        ORTHOVISC® is a high molecular weight, highly purified HA product designed to relieve pain and improve joint mobility in patients suffering from osteoarthritis of the knee. ORTHOVISC® is delivered by intra-articular injection to supplement and restore the body's natural HA found in the synovial fluid of joints.

        Osteoarthritis is a debilitating disease causing pain, inflammation and restricted movement in joints. It occurs when the cartilage in a joint gradually deteriorates due to the effects of mechanical stress, which can be caused by a variety of factors including the normal aging process. In an osteoarthritic joint, particular regions of articulating surfaces are exposed to irregular forces, which result in the remodeling of tissue surfaces that disrupt the normal equilibrium or mechanical function. As osteoarthritis advances, the joint gradually loses its ability to regenerate cartilage tissue and the cartilage layer attached to the bone deteriorates to the point where eventually the bone becomes exposed. Advanced osteoarthritis often requires surgery and the possible implantation of artificial joints. The current treatment options for osteoarthritis before joint replacement surgery include analgesics, non-steroidal anti-inflammatory drugs and steroid injections.

        In the U. S., ORTHOVISC® is limited to investigational use. In October 1998, we were notified by the U.S. Food and Drug Administration (the FDA) that our Pre-Market Approval Application (PMA) was not approvable and that additional clinical data would be required to demonstrate the effectiveness of ORTHOVISC®. In late March 1999, we received an Investigational Device Exemption (IDE) approval for ORTHOVISC® and initiated a second Phase III clinical study. This trial completed patient enrollment, totaling 385 patients at 22 centers in the U.S. and Canada in August 1999. The final patient completed the six-month follow-up period on February 28, 2000. The statistical analysis of the clinical trial failed to show

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sufficient efficacy in this patient population to support the filing of a PMA application. In February 2001, we commenced our third Phase III clinical trial of ORTHOVISC®. In May 2002 we completed patient enrollment, which included 373 patients in 26 centers in the U.S. and Canada. In accordance with trial protocol, we took six months to complete the follow-up on the final patients. All of the patients completed the study in 2002. We expect to compile the data and prepare a submission to the FDA during the first half of 2003 in order to obtain U.S. market approval. The results of this third Phase III clinical study may not be adequate to demonstrate the effectiveness of ORTHOVISC® in order to obtain FDA approval or enable ORTHOVISC® to receive FDA approval in a timely manner, if at all.

        On November 10, 2000, we entered into an agreement to terminate an ORTHOVISC® marketing and distribution agreement with Zimmer, Inc., a subsidiary of Bristol-Myers Squibb Company. We established interim relationships with third party logistics firms in order to continue to supply ORTHOVISC® in Canada and the European countries previously covered under the distribution agreement with Zimmer. In March 2002 we entered into a three-year distribution agreement in the U.K. and in May 2002 we entered into a two-year distribution agreement in Canada, both of which are subject to earlier termination under certain circumstances. We are continuing to seek to establish long-term distribution relationships in other regions, but can make no assurances that we will be successful in doing so. See the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations Overview" and "Risk Factors and Certain Factors Affecting Future Operating Results."

HYVISC®

        HYVISC® is a high molecular weight injectable HA product for the treatment of joint dysfunction in horses due to non-infectious synovitis associated with equine osteoarthritis. HYVISC® has viscoelastic properties that lubricate and protect the tissues in horse joints. HYVISC® is distributed by Boehringer Ingelheim Vetmedica, Inc. in the United States.

OPHTHALMIC PRODUCTS

        The ophthalmic products we manufacture include the AMVISC® and AMVISC Plus® product line, CoEase™, STAARVISC®II, and ShellGel™. Our injectable ophthalmic viscoelastic products are high molecular weight HA products used as viscoelastic agents in ophthalmic surgical procedures such as cataract extraction and intraocular lens implantation. These products coat, lubricate and protect sensitive tissues such as the endothelium and maintain the space between them, thereby facilitating ophthalmic surgical procedures.

        Anika manufactures the AMVISC® product line for Bausch & Lomb. We entered into a supply agreement (the B&L Agreement) with Bausch & Lomb Surgical, a unit of Bausch & Lomb, in July 2000. Bausch & Lomb Surgical was subsequently merged into Bausch & Lomb. Under the terms of the B&L Agreement, effective January 1, 2001, we became Bausch & Lomb's exclusive provider of AMVISC® and AMVISC® Plus in the U.S. and international market. The B&L Agreement expires December 31, 2007 and supersedes the prior supply agreement with Bausch & Lomb that was set to expire December 31, 2001. The B&L Agreement is subject to early termination and/or reversion to a non-exclusive basis under certain circumstances. The B&L Agreement lifted certain contractual restrictions on our sales of certain ophthalmic products to other companies, subject to the payment of royalties to Bausch & Lomb for these sales. In exchange, we agreed to a reduction in unit selling prices that was retroactively effective to April 1, 2000 and the elimination of minimum unit purchase obligations by Bausch & Lomb. See also the section captioned "Risk Factors and Certain Factors Affecting Future Operating Results—Dependence on Marketing Partners" and "—Reliance on a Small Number of Customers."

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Research and Development of Potential Products

        As discussed below in the section titled "Risk Factors and Certain Factors Affecting Future Operating Results," we have not obtained FDA approval for the sales and marketing in the U.S. of the potential products described below.

INCERT®

        In general, INCERT® is a family of chemically modified, cross-linked forms of HA designed to prevent surgical adhesions. Surgical adhesions occur when fibrous bands of tissues form between adjacent tissue layers during the wound healing process. Although surgeons attempt to minimize the formation of adhesions, they nevertheless occur quite frequently after surgery. Adhesions in the abdominal and pelvic cavity can cause particularly serious problems such as intestinal blockage following abdominal surgery, and infertility following pelvic surgery. Fibrosis following spinal surgery can complicate re-operation and may cause pain.

        INCERT®-S is our product designed to reduce post-surgical fibrosis following spinal surgery. We are evaluating various development options for this product and its underlying technology, including reconsideration of our previous plans to launch a clinical trial. We cannot assure you that: (1) we will begin or successfully complete clinical trials of INCERT®-S; (2) if completed, FDA approval for sales in the U.S. will be obtained; or (3) if regulatory approvals are obtained, meaningful sales of INCERT®-S will be achieved.

        Anika co-owns an issued U.S. patent covering the use of INCERT® for adhesion prevention. See the section captioned "Patent and Propriety Rights".

OSSIGEL®

        In June 1997, we executed a multi-year collaboration agreement with Orquest, Inc. to develop and manufacture OSSIGEL®, a formulation of basic fibroblast growth factor and HA.

        In January 2003, DePuy, Inc., a Johnson & Johnson company, announced that it had entered into a definitive agreement to acquire substantially all of the assets of Orquest. Orquest had indicated in 2001 that it has focused its resources on other product development efforts and there can be no assurance that OSSIGEL® development will continue, if at all.

Manufacturing of Hyaluronic Acid

        We have been manufacturing HA since 1983 in our facility located in Woburn, Massachusetts. This facility is approved by the FDA for the manufacture of medical devices and drugs. We have developed a proprietary manufacturing process for the extraction and purification of HA from rooster combs, a source of high molecular weight HA. This process uses a number of raw materials and components, some of which we obtain from single suppliers. We believe that sufficient supplies of these materials are generally available, or maintained in inventory, to meet anticipated demand.

Patent and Proprietary Rights

        We have a policy of seeking patent protection for patentable aspects of our proprietary technology. Our issued patents expire between 2009 and 2016. We co-own certain U.S. patents and a patent application with claims relating to the chemical modification of HA and certain adhesion prevention uses and certain drug delivery uses of HA. We also solely own patents covering certain manufacturing processes. We also hold a license from Tufts University to use technologies claimed in a U.S. patent for the anti-metastasis applications of HA oligosaccharides. The license expires upon expiration of the underlying patent. We intend to seek patent protection for products and processes developed in the course of our activities when we believe such protection is in our best interest and when the cost of seeking such protection is not

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inordinate relative to the potential benefits. See also the section captioned "Risk Factors and Certain Factors Affecting Future Operating Results—We may be unable to adequately protect our intellectual property."

        Other entities have filed patent applications for or have been issued patents concerning various aspects of HA-related products or processes. In addition, the products or processes we develop may infringe the patent rights of others in the future. Any such infringement may have a material adverse effect on our business, financial condition, and results of operations. See also the section captioned "Risk Factors and Certain Factors Affecting Future Operating Results—We may be unable to adequately protect our intellectual property."

        We also rely upon trade secrets and proprietary know-how for certain non-patented aspects of our technology. To protect such information, we require all employees, consultants and licensees to enter into confidentiality agreements limiting the disclosure and use of such information. These agreements, herein, may not provide adequate protection. See also the section captioned "Risk Factors and Certain Factors Affecting Future Operating Results—We may be unable to adequately protect our intellectual property."

        We have granted Bausch & Lomb a royalty-free, worldwide, exclusive license to our manufacturing and product inventions which relate to the AMVISC® products, effective upon the earlier of (1) the termination date of the B&L Agreement or (2) the loss of exclusivity there under.

Government Regulation

        Our research, development, manufacture, and marketing of products are subject to regulation by numerous governmental authorities in the U.S. and other countries. In the U.S., medical devices are subject to extensive and rigorous regulation by the Food and Drug Administration (FDA) and by other federal, state and local authorities. The Federal Food, Drug and Cosmetic Act (FDC Act) governs the testing, safety, effectiveness, clearance, approval, manufacture, labeling, packaging, distribution, storage, record keeping, reporting, marketing, advertising, and promotion of our products. Noncompliance with applicable requirements can result in, among other things, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure of the government to grant premarket clearance or approval of products, withdrawal of clearances and approvals, and criminal prosecution.

        Medical products regulated by the FDA are generally classified as drugs, biologics, and/or medical devices. AMVISC® is approved as a Class III device in the U.S. for ophthalmic surgical procedures in intraocular use in humans. HYVISC® is approved as an animal drug for intra-articular injection in horse joints to treat degenerative joint disease associated with synovitis. In the past, most HA products for human use have been regulated as medical devices. We believe that the ORTHOVISC® and INCERT® products will have to meet the regulatory requirements of Class III devices, including premarket approval (PMA).

        Unless a new device is exempted from premarket notification, its manufacturer must obtain marketing clearance through a premarket notification or approval through a PMA before the device can be introduced into the market. Product development and approval within the FDA regulatory framework takes a number of years and involves the expenditure of substantial resources. This regulatory framework may change or additional regulation may arise at any stage of our product development process and may affect approval of, or delay an application related to, a product, or require additional expenditures by us. There is no assurance that FDA review of marketing applications will result in product approval on a timely basis, or at all.

        In the U.S., medical devices intended for human use are classified into three categories (Class I, II or III), on the basis of the controls deemed reasonably necessary by the FDA to assure their safety and effectiveness. Class I devices are subject to general controls, for example, labeling and adherence to the FDA's Good Manufacturing Practices/Quality System Regulation (GMP/QSR). Most Class I devices are exempt from premarket notification. Class II devices are subject to general and special controls (for

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example, performance standards, postmarket surveillance, and patient registries). Most class II devices are subject to premarket notification and may be subject to clinical testing for purposes of premarket notification and clearance for marketing. Class III is the most stringent regulatory category for medical devices. Most Class III devices require PMA approval from the FDA.

        FDA will clear a device under premarket notification (510(k)) if the submitted information establishes that the proposed device is "substantially equivalent" to a legally marketed Class I or II medical device, or to a Class III medical device for which the FDA has not yet called for a PMA. Commercial distribution of a device for which a 510(k) notification is required can begin only after FDA issues an order that the device is substantially equivalent to a device that is legally marketed and not subject to a PMA requirement. FDA may determine that a proposed device is not substantially equivalent to a legally marketed device, in which case a PMA typically will be required to market the device. None of our products have been cleared for marketing via premarket notification. HA-based products have in the past required, and will likely continue to require, the approval of a PMA from the FDA prior to commercial sale.

        The PMA approval process is lengthy, expensive, and typically requires, among other things, valid scientific evidence which typically includes extensive data such as pre-clinical and clinical trial data to demonstrate a reasonable assurance of safety and effectiveness.

        Human clinical trials for significant risk devices must be conducted under an Investigational Device Exemption (IDE), which must be submitted to FDA and be allowed to become effective before the trials may commence. There can be no assurance that submission of an IDE will result in the ability to commence clinical trials. In addition, an IDE approval process could result in significant delay. Even if FDA allows an IDE for a clinical investigation to become effective, clinical trials may be suspended at any time for a number of reasons, including, among other things, failure to comply with applicable requirements, or if there is reason to believe that the risks to clinical subjects are not outweighed by the anticipated benefits to clinical subjects and the importance of the knowledge to be gained, or informed consent is inadequate, or the investigation is scientifically unsound, or there is reason to believe that the device, as used, is ineffective. A trial may be terminated if an unanticipated adverse device effect presents an unreasonable risk to subjects. If clinical studies are suspended or terminated, we may be unable to continue the development of the investigational products affected.

        Upon completion of required clinical trials, results are presented to the FDA in a PMA application. In addition to the results of clinical investigations, the PMA applicant must submit other information relevant to the safety and effectiveness of the device, including, among other things, the results of non-clinical tests; a full description of the device and its components; a full description of the methods, facilities and controls used for manufacturing; and proposed labeling. The FDA will also conduct an on-site inspection to determine whether an applicant conforms with FDA's current GMP/QSR. FDA review of the PMA may not result in timely or any PMA approval, and there may be significant conditions on approval, including limitations on labeling and advertising claims and the imposition of post-market testing, tracking, or surveillance requirements.

        Product changes after approval as well as the use of a different facility for manufacturing where such change affects safety and effectiveness, could necessitate additional FDA review and approval. Post approval changes in labeling, packaging or promotional materials may also necessitate further FDA review and approval.

        Legally marketed products are subject to continuing FDA requirements relating to quality control and quality assurance, maintenance of records and documentation, reporting of adverse events, and labeling and promotion. The FDC Act requires device manufacturers to comply with GMP/QSR. FDA enforces these through periodic inspections of device manufacturing facilities. In complying with standards set forth in the GMP/QSR regulations, manufacturers must continue to expend time, money and effort in the area of production and quality control to ensure full technical compliance. Other federal, state, and local agencies may inspect manufacturing establishments as well.

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        A set of regulations known as the Medical Device Reporting regulations obligates manufacturers to inform FDA whenever information reasonably suggests that one of their devices may have caused or contributed to a death or serious injury, or when one of their devices malfunctions and if the malfunction were to recur, the device or a similar device would be likely to cause or contribute to a death or serious injury.

        In addition to regulations enforced by the FDA, we are subject to regulation under the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act and other existing and future federal, state and local laws and regulations as well as those of foreign governments. Federal, state and foreign regulations regarding the manufacture and sale of medical products are subject to change. We cannot predict what impact, if any, such changes might have on our business.

        The process of obtaining approvals from the FDA and foreign regulatory authorities can be costly, time consuming, and subject to unanticipated delays. Approvals of our products, processes or facilities may not be granted on a timely basis or at all, and we may not obtain the financing needed to develop certain of such products. Any failure or delay in obtaining such approvals could adversely affect our ability to market our products in the U.S. and in other countries.

Foreign Regulation

        In addition to regulations enforced by the FDA, we and our products are subject to certain foreign regulations. International regulatory bodies often establish regulations governing product standards, packing requirements, labeling requirements, import restrictions, tariff regulations, duties and tax requirements. ORTHOVISC® is approved for sale and is marketed in Canada, Europe, Turkey, and Israel. In Europe, ORTHOVISC® is sold under Communauté Européenne (CE mark) authorization, a certification required under European Union (EU) medical device regulations. The CE mark allows ORTHOVISC® to be marketed without further approvals in most of the EU nations as well as other countries that recognize EU device regulations. In October 1996, we received an EC Design Examination and an EC Quality System Certificate from a European Notified Body, which entitled us to affix a CE marking for ORTHOVISC® as a viscoelastic supplement or a replacement for synovial fluid in human joints. We may not be able to achieve and/or maintain compliance required for CE marking or other foreign regulatory approvals for any or all of our products. The requirements relating to the conduct of clinical trials, product licensing, marketing, pricing, advertising, promotion and reimbursement also vary widely from country to country.

Competition

        We compete with many companies, including, among others, large pharmaceutical firms and specialized medical products companies. Many of these companies have substantially greater financial and other resources, larger research and development staffs, more extensive marketing and manufacturing organizations and more experience in the regulatory process than us. We also compete with academic institutions, governmental agencies and other research organizations, which may be involved in research, 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.

        General competition in our industry is based primarily on product efficacy, safety, timing and scope of regulatory approvals, availability of 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 HA development and commercialization market include:

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the quality and breadth of our technology and technological advances;

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our ability to complete successful clinical studies and obtain FDA marketing and foreign regulatory approvals prior to our competitors;



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our ability to recruit and retain skilled employees; and



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the availability of substantial capital resources to fund discovery, development and commercialization activities.

        We are aware of several companies that are developing and/or marketing products utilizing HA for a variety of human applications. In some cases, competitors have already obtained product approvals, submitted applications for approval or have commenced human clinical studies, either in the U.S. or in certain foreign countries. There exists major competing products for the use of HA in ophthalmic surgery including Healon, manufactured by Pharmacia, and Provisc and Viscoat, distributed by Alcon. In addition, certain HA products for the treatment of osteoarthritis in the knee have received FDA approval and are being marketed in the U.S. and in select markets in Canada, Europe and other countries. There is a risk that we will be unable to compete effectively against our current or future competitors.

Research and Development

        Our research and development efforts consist primarily of the development of new medical applications for our HA-based technology and the management of clinical trials for certain product candidates and the preparation and processing of applications for regulatory approvals at all relevant stages of development. Our development of new products is accomplished primarily through in-house research and development personnel and resources as well as through collaboration with other companies and scientific researchers. For the years ended December 31, 2002, 2001, and 2000, research and development expenses were $3.9 million, $4.3 million, and $3.3 million, respectively. We anticipate that we will continue to commit significant resources to research and development, including clinical trials, in the future. As of December 31, 2002, we had four employees engaged primarily in research and development and four employees engaged in engineering and regulatory matters.

        There is a risk that our efforts will not be successful in (1) developing our existing product candidates, (2) expanding the therapeutic applications of our existing products, or (3) resulting in new applications for our HA technology. There is also a risk that we may choose not to pursue development of potential product candidates. We may not be able to obtain regulatory approval for any new applications we develop. Furthermore, even if all regulatory approvals are obtained, there can be no assurances that we will achieve meaningful sales of such products or applications.

Employees

        As of December 31, 2002, we had approximately 60 full-time employees. We consider our relations with our employees to be good. None of our employees are represented by labor unions.

Environmental Laws

        We believe that we are in compliance with all federal, state and local environmental regulations with respect to our manufacturing facilities and that the cost of ongoing compliance with such regulations does not have a material effect on the our operations. Our leased manufacturing facility is located within the Wells G&H Superfund site in Woburn, MA. We have not been named and are not a party to any such legal proceedings regarding the Wells G&H Superfund site.

Product Liability

        The testing, marketing and sale of human health care products entail an inherent risk of allegations of product liability, and we cannot assure you that substantial product liability claims will not be asserted against us. Although we have not received any material product liability claims to date and have coverage

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under our insurance policy of $5,000,000 per occurrence and $5,000,000 in the aggregate, we cannot assure you that if material claims arise in the future, our insurance will be adequate to cover all situations. Moreover, we cannot assure you that such insurance, or additional insurance, if required, will be available in the future or, if available, will be available on commercially reasonable terms. Any product liability claim, if successful, could have a material adverse effect on our business, financial condition, and results of operation.

Recent Developments

        In May 2000, the Securities and Exchange Commission (SEC) issued a formal order of investigation in connection with certain revenue recognition matters. On January 13, 2003 we announced that we had entered into a settlement with the SEC concluding and resolving this investigation, which pertained to the company's historical accounting for and disclosures concerning sales of ORTHOVISC® under a long-term supply and distribution agreement with Zimmer, Inc. To conclude this matter, we consented to the entry of an order to comply with sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and rules 12b-20, 13a-1 and 13a-13 promulgated thereunder. The settlement did not impose any monetary sanctions against us, and it is not expected to affect our results of operations or financial condition. We neither admitted nor denied the findings in the SEC's administrative cease and desist order resolving the matter.

        On January 28, 2003, we announced a restatement of our previously-reported results for the three- and nine-month periods ended September 30, 2002. The restatement involves revenue recognized for the sale in the third quarter of 2002 of certain units of our HYVISC®. A new "clean room" at our facility that does not have a required regulatory approval for the manufacture of HYVISC® from the Food and Drug Administration (FDA) was used in the production of these units. Because the product was shipped in the absence of this regulatory approval, we have determined, and our independent accountants have concurred, that revenue from that sale should not have been recognized. As a result of the restatement, the revenue for the three and nine months ended September 30, 2002 was reduced by $326,480 and the net loss for those periods increased by $169,770, or $0.02 per share. As a result of the restatement, our total HYVISC® inventory at September 30, 2002, was $173,326, which included $156,710 in HYVISC® inventory from the restated transaction, and $16,616 in HYVISC® inventory produced in the new clean room which was previously included in our pre-restatement inventory. Included in our inventory at December 31, 2002 is $292,734 in HYVISC® inventory produced in the new clean room which includes the $156,710 in HYVISC® inventory from the restatement.

        On March 25, 2003, we announced the appointment of Roger Stikeleather as Vice President of Sales and Marketing.

ITEM 2.    PROPERTIES

        Our corporate headquarters is located in Woburn, Massachusetts, where we lease approximately 10,000 square feet of administrative and research and development space. Our lease on this facility terminates in October 2003. We also lease approximately 37,000 square feet of space at a separate location in Woburn, Massachusetts, for our manufacturing facility and warehouse. This facility has received all FDA and state regulatory approvals to operate as a sterile device and drug manufacturer. The lease for this facility terminates in February 2004. In June 2002 we terminated a lease for approximately 9,000 square feet of additional warehouse space. For the year ended December 31, 2002, we had aggregate lease costs of approximately $657,000.

ITEM 3.    LEGAL PROCEEDINGS

        Securities and Exchange Commission Investigation.    In May 2000, the Securities and Exchange Commission (SEC) issued a formal order of investigation in connection with certain revenue recognition

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matters. On January 13, 2003 we announced that we had entered into a settlement with the SEC concluding and resolving this investigation, which pertained to the company's historical accounting for and disclosures concerning sales of ORTHOVISC® under a long-term supply and distribution agreement with Zimmer, Inc. To conclude this matter, we consented to the entry of an order to comply with sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and rules 12b-20, 13a-1 and 13a-13 promulgated thereunder. The settlement did not impose any monetary sanctions against us, and it is not expected to affect our results of operations or financial condition. We neither admitted nor denied the findings in the SEC's administrative cease and desist order resolving the matter.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matter was submitted to a vote of the security holders during the fourth quarter of the fiscal year covered by this report.

PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

COMMON STOCK INFORMATION

        Our common stock has traded on the Nasdaq National Market since November 25, 1997, under the symbol "ANIK." The following table sets forth, for the periods indicated, the high and low bid prices of our common stock on the Nasdaq National Market. These prices represent prices between dealers and do not include retail mark-ups, markdowns, or commissions and may not necessarily represent actual transactions.

        At December 31, 2002, the closing price per share of our common stock was $0.99 as reported on the Nasdaq National Market and there were approximately 308 holders of record.

        We have never declared or paid any cash dividends on our common stock. We currently intend to retain earnings, if any, for use in our business and do not anticipate paying cash dividends on our common stock in the foreseeable future. Payment of future dividends, if any, on our common stock will be at the discretion of our Board of Directors after taking into account various factors, including our financial condition, operating results, anticipated cash needs, and plans for expansion.

ITEM 6.    SELECTED FINANCIAL DATA

        The following selected consolidated financial data should be read in conjunction with the Consolidated Financial Statements and the Notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Annual Report. The Balance

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Sheet Data at December 31, 2002 and 2001 and the Statement of Operations Data for each of the three years ended December 31, 2002 have been derived from the audited Consolidated Financial Statements for such years, included elsewhere in this Annual Report. The Balance Sheet Data at December 31, 2000, 1999 and 1998 and the Statement of Operations Data for each of the two years ended December 31, 1999 have been derived from the audited Consolidated Financial Statements for such years, not included in this Annual Report.

        The Consolidated Financial Statements for fiscal years 1998 through 2001 were audited by Arthur Andersen LLP (Andersen) who has ceased operations. A copy of the report previously issued by Andersen on our financial statements as of December 31, 2001 and for each of the two years in the period ended December 31, 2001 is included elsewhere in this Annual Report. Such report has not been reissued by Andersen.

Statement of Operations Data
(In thousands, except per share data)

Balance Sheet Data
(In thousands)

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following section of this Annual Report on Form 10-K titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" contains statements that are not statements of historical fact and are forward-looking statements within the meaning of the federal securities laws. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievement to differ materially from anticipated results, performance, or achievement, expressed or implied in such forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. We discuss many of these risks and uncertainties at the beginning of this Annual Report on Form 10-K and under the heading "Business" and "Risk Factors and Certain Factors Affecting Future Operating Results." The following discussion should also be read in conjunction with the Consolidated Financial Statements of Anika Therapeutics, Inc. and the Notes thereto appearing elsewhere in this report.

Overview

        Anika develops, manufactures and commercializes therapeutic products and devices intended to promote the protection and healing of bone, cartilage and soft tissue. These products are based on hyaluronic acid (HA), a naturally occurring, biocompatible polymer found throughout the body. Due to its unique biophysical and biochemical properties, HA plays an important role in a number of physiological functions such as the protection and lubrication of soft tissues and joints, the maintenance of the structural integrity of tissues, and the transport of molecules to and within cells. Our currently marketed products consist of ORTHOVISC®, which is an HA product used in the treatment of some forms of osteoarthritis in humans, and HYVISC®, which is an HA product used in the treatment of equine osteoarthritis. ORTHOVISC® is currently approved for sale and is being marketed in Canada, parts of Europe, Turkey, and Israel. In the U.S., ORTHOVISC® is currently limited to investigational use.

        We commenced a Phase III clinical trial of ORTHOVISC® in the U.S. and Canada in February 2001. We completed patient enrollment in May 2002 and, in accordance with trial protocol, took six months to complete the follow-up on the final patients. All of the patients completed the study in 2002. We expect to compile the data and prepare a submission to the FDA during the first half of 2003 in order to obtain U.S. market approval. The results of this Phase III clinical study may not be adequate to demonstrate the effectiveness of ORTHOVISC® in order to obtain FDA approval or enable ORTHOVISC® to receive FDA approval in a timely manner, if at all.

        We manufacture AMVISC® and AMVISC® Plus for Bausch & Lomb, which are HA products used as viscoelastic supplements in ophthalmic surgery. We also manufacture CoEase™ for Advanced Medical Optics, STAARVISC®II, for STAAR Surgical Company, and ShellGel™ for Cytosol Ophthalmics, each of which is an injectable ophthalmic viscoelastic product. We receive a substantial portion of our revenue from the sale of AMVISC® and AMVISC® Plus to Bausch & Lomb. For the years ended December 31, 2002, 2001, and 2000, sales to Bausch & Lomb accounted for 59%, 65%, and 54% of product revenue, respectively. In July 2000, we entered into the B&L Agreement. Under the terms of the B&L Agreement, effective January 1, 2001, we became Bausch & Lomb's exclusive provider of AMVISC® and AMVISC® Plus, ophthalmic viscoelastic products, in the U.S. and international markets. The B&L Agreement expires December 31, 2007 and supercedes the prior supply agreement with Bausch & Lomb that was set to expire December 31, 2001. The B&L Agreement is subject to early termination and/or reversion to a non-exclusive basis under certain circumstances. The B&L Agreement lifted certain contractual restrictions on our sales of certain ophthalmic products to other companies contained in the prior supply agreement, subject to our payment of royalties to Bausch & Lomb for these sales. In exchange, we agreed to a reduction in unit selling prices effective April 1, 2000, and the elimination of minimum unit purchase obligations by Bausch & Lomb.

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Restatement of Results

        On January 28, 2003, we announced a restatement of our previously-reported results for the three- and nine-month periods ended September 30, 2002. The restatement involves revenue recognized for the sale in the third quarter of 2002 of certain units of HYVISC®. A new "clean room" at our facility that does not have a required regulatory approval for the manufacture of HYVISC® from the Food and Drug Administration (FDA) was used in the production of these units. Because the product was shipped in the absence of this regulatory approval, we have determined, and our independent accountants have concurred, that revenue from that sale should not have been recognized. As a result of the restatement, the revenue for the three and nine months ended September 30, 2002 was reduced by $326,480 and the net loss for those periods increased by $169,770, or $0.02 per share. As a result of the restatement, our total HYVISC® inventory at September 30, 2002, was $173,326, which included $156,710 in HYVISC® inventory from the restated transaction, and $16,616 in HYVISC® inventory produced in the new clean room which was previously included in our pre-restatement inventory. Included in our inventory at December 31, 2002 is $292,734 in HYVISC® inventory produced in the new clean room which includes the $156,710 in HYVISC® inventory from the restatement.

        We have obtained all required regulatory approvals for the use of the new clean room in the manufacture of our products designed for human use: ORTHOVISC® (not approved for sale in the U.S.), AMVISC®, AMVISC® Plus, STAARVISC™-II, Shellgel™, and CoEase™.

        Until the required regulatory approval of the new clean room for use in the production of HYVISC® is received from the FDA, we are using the clean room previously used in the production of HYVISC®, which has the required regulatory approval. We have initiated discussions with the FDA regarding the shipment of HYVISC® described above. The FDA may not respond to our efforts cooperatively or may bring regulatory or other actions or proceedings against us. Additionally, in the past, some companies (including Anika) that have restated their financial information have been subject to inquiry or investigation by the Securities and Exchange Commission (SEC) and to private securities litigation. Any inquiry, investigation, action or proceeding by a governmental agency or any private securities litigation could have a material adverse effect on our business, financial condition or results of operations. There is a risk that any such inquiry, investigation, action, proceeding or litigation could result in substantial costs and divert management's attention and resources from our business.

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Results of Operations

Year ended December 31, 2002 compared to year ended December 31, 2001

Statement of Operations Detail

        Product revenue.    Product revenue for the year ended December 31, 2002 was $13,128,892, an increase of $1,829,938, or 16%, compared with $11,298,954 recorded in the prior year.

        The increase was primarily attributable to an increase in ophthalmic products sales and sales of HYVISC® and was partially offset by lower ORTHOVISC® sales. Ophthalmic product sales increased $2,303,719, or 30%, compared with 2001 as a result of higher unit sales volume from existing customers, including a full year from customers added during 2001, and a new customer added in the second quarter of 2002, partially offset by lower unit prices under the B&L Agreement. Under the terms of the B&L Agreement, the price for units sold in a calendar year is dependent on the total unit volume of sales of certain ophthalmic products during the year. Accordingly, unit prices for sales occurring in the nine months ended September 30, 2002 and 2001, were subject to possible retroactive price adjustments when the actual annual unit volume became known. In accordance with our revenue recognition policy, revenue is not recognized if the sale price is not fixed or determinable, and any amounts received in excess of revenue recognized is recorded as deferred revenue. In the fourth quarter of 2002 and 2001, product revenue included the recognition of $839,333 and $401,475, respectively, of revenue related to sales of AMVISC® to Bausch & Lomb, which had been previously deferred during the first three quarters of the respective years. During the fourth quarter of each year the actual annual unit volume became fixed or determinable. Our sales of HYVISC® increased by $379,100, or 71%, for 2002 as compared with 2001.

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Sales of HYVISC® were made to a single customer under an exclusive agreement which we renewed in May 2002 for a term of four years. Our sales of ORTHOVISC® decreased $852,881, or 27%, in 2002 as compared with 2001 primarily due to erosion in our market share in Turkey and pricing pressures in Spain and Portugal as well as decreased sales in other parts of Europe. We expect to continue to experience volatility in our international sales of ORTHOVISC® including ongoing competitive factors as well as economic issues, and potential regional conflict and political uncertainties.

        Licensing revenue.    Licensing revenue for the year ended December 31, 2002 increased $45,011, or 346%, to $58,011 for the year ended December 31, 2002 from $13,000 in the prior year. Licensing revenue includes up-front and maintenance payments on certain supply agreements with purchasers of our ophthalmic products. The increase relates to a full year impact from new distribution agreements effective in 2001, combined with a new distribution agreement effective in 2002. We expect licensing revenue in 2003 to be consistent with results for 2002.

        Gross profit.    Gross profit for the year ended December 31, 2002 was $5,078,208, or 39% of revenue, compared with $3,083,203, or 27% of revenue, for the year ended December 31, 2001. Gross profit for 2002, as compared with same period last year, benefited from improved manufacturing cost performance as a result of cost cutting initiatives we implemented during the latter half of 2001, which continued into 2002, combined with increased sales volumes and our efforts over the past year to reduce work-in-process inventories. Work-in-process inventory was reduced from $1,971,067 at December 31, 2001 to $1,354,021 at December 31, 2002. We had suspended certain manufacturing efforts in 2000 through late in 2001 in an effort to reduce work-in-process inventory levels of HA as a result of learning of unfavorable results from a clinical trial of ORTHOVISC® which we announced on May 31, 2000. As a result of the suspended manufacturing activities, work-in-process inventory was reduced from $3,169,358 at December 31, 2000 to $1,971,067 at December 31, 2001. During periods of reduced manufacturing activity, certain fixed costs of manufacturing were not fully absorbed into the cost of product manufactured and sold. Rather, such costs were charged to expense and amounted to approximately $2.0 million during the full year of 2001. Benefits resulting from manufacturing efficiencies were partially offset by lower prices for our sales of ophthalmic products under the B&L Agreement effective April 1, 2001 and lower prices of ORTHOVISC® reflecting competitive market conditions.

        Research and development.    Research and development expenses for the year ended December 31, 2002 decreased by $352,790, or 8%, to $3,927,730 from $4,280,520 for the prior year. Research and development expenses include those costs associated with our in-house research and development efforts for the development of new medical applications for our HA-based technology, the management of clinical trials, and the preparation and processing of applications for regulatory approvals at all relevant stages of development. The decrease in research and development expenses during 2002 is primarily attributable to a decrease in personnel-related costs of $652,953 due to lower headcount partially offset by increased costs of $348,341 associated with the Phase III clinical trial for ORTHOVISC®. We expect that research and development expenses for 2003 will decrease compared to 2002 primarily due to a decrease in costs associated with the clinical trials for ORTHOVISC® which we expect will conclude in the first half of 2003, partially offset by an increase in research and development efforts associated with new medical applications for our HA-based technology.

        Selling, general and administrative.    Selling, general and administrative expenses for the year ended December 31, 2002 decreased by $837,744 or 16%, to $4,424,964 from $5,262,708 in the prior year. The decrease in selling, general and administrative expenses during 2002 is primarily due a decrease in professional service fees of $551,805 combined with the impact of separation costs of $545,000 related to management changes which were included in the results for 2001. These decreases were partially offset by increases in personnel-related costs of $178,394 and royalty expenses of $92,688. We expect sales and marketing expenses to increase in 2003 compared to 2002 related to expanded marketing efforts for ORTHOVISC®. We expect general and administrative expenses to decrease in 2003 compared to 2002 as a

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result of lower professional service fees. As a result, we expect our aggregate selling, general and administrative expenses to remain approximately the same in 2003 compared to 2002.

        Litigation settlement costs.    Litigation settlement costs for the year ended December 31, 2002 was $0. Litigation settlement costs for the year ended December 31, 2001 included a charge of $850,000, which is the portion of the $1.25 million settlement amount we contributed and $100,716 in professional fees related to the putative class action suit. (See Note 18 of the financial statements included in Item 8 herein.)

        Interest income, net.    Interest income, net, decreased $442,673, or 64%, to $239,519 for the year ended December 31, 2002, from $662,192 in the prior year. The decrease is attributable to lower average cash and investment balances and lower interest rates during 2002. Interest income in 2003 is also expected to be adversely affected by lower market interest rates as well as lower average cash and investment balances.

        Income taxes.    Income tax expense was $4,997 for the year ended December 31, 2002 compared to $9,084 for the year ended December 31, 2001. The tax provisions primarily represent state income taxes paid on investment income. For federal income tax purposes, we have had net operating losses available to offset otherwise taxable income. As of December 31, 2002, we have federal and state net operating loss carryforwards of $12,943,000 and $10,669,000, respectively, which may be available to offset future taxable income, if any. As provided in Section 382 of the Internal Revenue Code (IRC) the amount of net operating loss and credit carryforwards that we may utilize in any one year may be restricted in the event of certain changes in ownership.

Year ended December 31, 2001 compared to year ended December 31, 2000

Statement of Operations Detail