UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-21326

Anika Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Massachusetts		04-3145961
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

160 New Boston Street, Woburn, Massachusetts		01801
(Address of Principal Executive Offices)		(Zip Code)

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

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.

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 last 90 days. Yes ý No o

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date. At April 25, 2005 there were 10,314,972 outstanding shares of Common Stock, par value $.01 per share.

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

Anika Therapeutics, Inc.
Consolidated Balance Sheets
(Unaudited)

	March 31, 2005			December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	40,337,000		$	39,339,000
Accounts receivable, net of reserves of $23,000 at March 31, 2005 and December 31, 2004	2,558,000			2,354,000
Inventories	3,764,000			4,227,000
Current portion deferred income taxes	1,824,000			1,824,000
Prepaid expenses and other current assets	578,000			1,339,000
Total current assets	49,061,000			49,083,000

Property and equipment, at cost	10,414,000			10,349,000
Less: accumulated depreciation	(9,502,000		)	(9,394,000		)
	912,000			955,000

Long-term deposits	143,000			143,000
Deferred income taxes	9,357,000			9,357,000
Total assets	$	59,473,000		$	59,538,000

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	786,000		$	791,000
Accrued expenses	1,586,000			2,041,000
Deferred revenue	3,792,000			4,116,000
Total current liabilities	6,164,000			6,948,000
Long-term deferred revenue	21,472,000			22,227,000
Total liabilities	27,636,000			29,175,000

Stockholders’ equity:
Preferred stock, $.01 par value; 1,250,000 shares authorized, no shares issued and outstanding at March 31, 2005 and December 31, 2004	—			—
Common stock, $.01 par value; 30,000,000 shares authorized, 10,298,972 and 10,257,472 shares issued and outstanding at March 31, 2005 and December 31, 2004, respectively	103,000			103,000
Additional paid-in capital	32,911,000			32,639,000
Accumulated deficit	(1,177,000		)	(2,379,000		)
Total stockholders’ equity	31,837,000			30,363,000
Total liabilities and stockholders’ equity	$	59,473,000		$	59,538,000

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Anika Therapeutics, Inc.
Consolidated Statements of Operations
(Unaudited)

	Three Months Ended March 31,
	2005		2004

Product revenue	$	5,677,000	$	5,569,000
License and milestone revenue	1,614,000		572,000
Total revenue	7,291,000		6,141,000
Cost of product revenue	2,994,000		2,721,000
Gross profit	4,297,000		3,420,000
Operating expenses:
Research and development	1,199,000		907,000
Selling, general and administrative	1,292,000		1,308,000
Total operating expenses	2,491,000		2,215,000
Income from operations	1,806,000		1,205,000
Interest income	212,000		46,000
Income before income tax expense (benefit)	2,018,000		1,251,000
Income tax expense (benefit)
Provision for income taxes	816,000		504,000
Benefit from release of valuation allowance	—		(7,039,000		)
Net income	$	1,202,000	$	7,786,000

Basic net income per common share	$	0.12	$	0.78
Shares used to calculate basic net income per common share	10,269,389		9,987,410
Diluted net income per common share	$	0.11	$	0.69
Shares used to calculate diluted net income per common share	11,264,595		11,257,264

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Anika Therapeutics, Inc.
Consolidated Statements of Cash Flows
For the Three Months Ended
(Unaudited)

	March 31, 2005			March 31, 2004

Cash flows from operating activities:
Net income	$	1,202,000		$	7,786,000
Adjustments to reconcile net income to net cash used by operations:
Depreciation	108,000			165,000
Deferred income taxes	—			(9,673,000		)
Tax benefit related to stock option plans	139,000			—
Changes in operating assets and liabilities:
Accounts receivable	(204,000		)	(1,554,000		)
Inventories	463,000